Government to launch refundable investment credit

This will shoulder up to 50% of qualifying expenditures.

The Singapore government will be introducing the Refundable Investment Credit (RIC) to improve the country’s attractiveness for investment.

Introduced during Deputy Prime Minister Lawrence Wong’s Budget Speech, the RIC will support up to 50% of qualifying expenditures, with the credits to be offset against corporate income tax payable.

Companies will get a refund for unused tax credits as cash within four years of accomplishing the conditions for receiving the credits, which will be approved by the Economic Development Board and EnterpriseSG.

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The RIC, which is consistent with the Global Anti-Base Erosion Rules for Qualified Refundable Tax Credits, will have a qualifying period of up to 10 years, according to the Ministry of Finance.

The ministry said the scheme will support “high value and substantive economic activities” such as investing in new productive capacity, expanding scope activities in digital and professional services, and supply chain management.

RIC will also support the setting up of activities by commodity trading firms, research and development and innovation activities, and solutions with decarbonisation objectives.

The credit a company receives will depend on the support rates identified for the company’s qualifying expenditure categories which may include capital expenditure, manpower costs, training costs, professional fees, intangible asset costs, fees for work outsourced in Singapore, material and consumables, and freight and logistics.