Government to launch refundable investment credit

19 Feb, 2024

Government to launch refundable investment credit

The Singapore government has announced the introduction of the Refundable Investment Credit (RIC) to enhance the nation's appeal for investment. Revealed during Deputy Prime Minister Lawrence Wong's Budget Speech, the RIC is designed to bolster qualifying expenditures by providing support of up to 50%, with credits applied against corporate income tax obligations.

Under this scheme, companies stand to receive a refund for unused tax credits as cash within a four-year period upon meeting specified conditions, which will be sanctioned by the Economic Development Board and EnterpriseSG. Aligned with the Global Anti-Base Erosion Rules for Qualified Refundable Tax Credits, the RIC will be operational for a qualifying span of up to 10 years, as outlined by the Ministry of Finance.

This initiative aims to foster "high value and substantive economic activities," including investments in new productive capacities, expansion of digital and professional services, and advancements in supply chain management. Furthermore, RIC will facilitate the establishment of activities by commodity trading firms, research and development ventures, and innovative solutions with decarbonisation objectives.

The allocation of credits to a company will vary based on the designated support rates for qualifying expenditure categories, encompassing capital expenditure, manpower costs, training expenses, professional fees, intangible asset outlays, fees for outsourced work in Singapore, material and consumables costs, and expenses related to freight and logistics.