![\"Singapore](\"https:\/\/td2htech.com\/synergixtech_dev\/\/wp-content\/uploads\/2026\/05\/guide-to-eis-tax-deduction-singapore.jpg\")
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For businesses that are spending money on training, R&D or IP in Singapore, EIS is likely to be one of the most significant tax\u00a0incentive\u00a0that you are under-utilizing. From being introduced during Budget 2023 to significant enhancement during Budget 2026, EIS rewards companies on their investments in innovation and capabilities by offering 400% tax deduction or a cash payout of $20,000 per YA.<\/span>\u00a0<\/span><\/p>\n This is your go-to guide on EIS- what is it, who is it for, what kind of activities qualify, how do I apply, and can I\u00a0stackEIS\u00a0with other grants such as PSG or SFEC?<\/span>\u00a0<\/span><\/p>\n EIS is a government incentive scheme that is administered by IRAS and currently applies to all YAs from YA2024 to YA2028. It provides businesses with a choice on how to receive their benefit on a qualifying expense:<\/span>\u00a0<\/span><\/p>\n Ultimately, whichever\u00a0method you choose, there would be\u00a0substantial\u00a0savings. A profitable company might stand to save more through tax deductions. While an early-stage company or an investment holding company may find more value in immediate cash payment since they might not have sufficient taxable income to\u00a0utilize\u00a0tax deductions fully.<\/span>\u00a0<\/span><\/p>\n All businesses in all sectors can apply for EIS. Whether\u00a0you’re\u00a0a large company or a small one, and irrespective of your industry, you are eligible to apply. This can be applied to companies, sole proprietorships, partnerships as well as registered branches or subsidiaries of foreign companies that are in Singapore.<\/span>\u00a0<\/span><\/p>\n There are two sets of criteria for each method<\/span>\u00a0<\/span><\/p>\n For 400% Enhanced Tax Deductions:\u00a0<\/span><\/b>The company must have been carrying out a trade in Singapore and incurred a qualifying expense in that year of assessment.<\/span>\u00a0<\/span><\/p>\n For 20% Cash\u00a0Payout<\/span><\/b>:\u00a0In\u00a0addition to having incurred a qualifying expense, the company must fulfill the following criteria:<\/span>\u00a0<\/span><\/p>\n Investment holding companies, charities and businesses that have ceased\u00a0operations,\u00a0are not eligible for the cash payout.<\/span>\u00a0<\/span><\/p>\n It\u2019s\u00a0a challenging but dynamic economy that every business owner in Singapore is aware of, from global competition to the pressure to\u00a0digitise, through to the importance of building an educated workforce. EIS was designed to reduce the financial hurdle associated with these activities which can give a business a crucial advantage.<\/span><\/p>\n This means, for example, if your company spends S$100,000 on qualifying R&D in Singapore, it can claim a deduction of 400% (S$400,000). For a business on the 17% corporation tax rate,\u00a0that’s\u00a0an actual tax saving of\u00a0approximately S$68,000 per S$100,000 investment. If a business\u00a0doesn’t\u00a0have sufficient tax liability yet, it can opt for a cash payout. Any S$100,000 expenditure can be converted into a S$20,000 cash payout made by IRAS within about 3 months of approval. Budget 2026 also introduced a 40% corporate tax rebate for YA 2026 (capped at S$30,000), and EIS can be used alongside the tax rebate to allow companies to achieve significant tax savings\u00a0in a given year. EIS is not just for large businesses but open to any company, partnership, and sole proprietorship that is investing in its future.\u00a0You’re\u00a0likely losing\u00a0money if\u00a0you’re\u00a0not claiming it.<\/span>\u00a0<\/span><\/p>\n Innovative or experimental work to develop or improve products, services, or processes. It covers staff costs, consumables, and up to 60% of outsourced R&D fees.\u00a0Maximum\u00a0S$400,000 per YA.<\/span>\u00a0<\/span><\/p>\n Official and professional fees for registering patents, trademarks, and designs, even unsuccessful registrations will qualify\u00a0as long as\u00a0you\u00a0retain\u00a0ownership of the IP in Singapore for at least one year.\u00a0Maximum\u00a0S$400,000 per YA.<\/span>\u00a0<\/span><\/p>\n Businesses with group revenue under S$500 million may be eligible for a 400% write-down allowance for IP\u00a0acquired\u00a0or licensed (not software\u00a0or from\u00a0related parties).\u00a0Maximum\u00a0S$400,000 per YA.<\/span>\u00a0<\/span><\/p>\n The most widely accessible area for most companies. This includes course fees and assessment costs for\u00a0SkillsFuture\u00a0Singapore (SSG) approved training relevant to your business and delivered in Singapore by SSG-registered providers.\u00a0Maximum\u00a0S$400,000 per YA.<\/span>\u00a0<\/span><\/p>\n Fees paid to polytechnics, ITE or similar organisations for collaborative innovation projects including R&D, software development or IP activities. Maximum S$50,000 per YA.<\/span>\u00a0<\/span><\/p>\n Budget 2026 introduced AI expenditure as a qualifying category for YA 2027 & YA 2028, at 400% for deductions up to S$50,000 per YA. Unlike other categories,\u00a0there’s\u00a0no cash payout\u00a0option\u00a0here, just the tax deduction, and specific criteria will be released by IRAS by 30 June 2026. The approved partner list for innovation projects will now include the Advanced\u00a0Intelligence for\u00a0Manufacturing (AIMfg)\u00a0programme.<\/span>\u00a0<\/span><\/p>\n Remember:<\/span><\/b>\u00a0<\/span><\/p>\n One of the benefits of EIS is its ability to\u00a0be combined\u00a0with other government grants.\u00a0Here’s\u00a0how it works with the three most common grant schemes:<\/span>\u00a0<\/span><\/p>\n Productivity Solutions Grant (PSG) co-funds up to 50% of approved digital solutions including\u00a0<\/span>ERP systems<\/span><\/a>. While the ERP software\u00a0licence\u00a0may not be an EIS-qualifying expenditure, the employee training that supports adoption of a new ERP system is eligible under EIS Activity 4-as long as\u00a0it’s\u00a0provided by an SSG-registered provider.<\/span>\u00a0<\/span><\/p>\n SkillsFuture\u00a0Enterprise Credit (SFEC) gives an eligible employer up to $10,000 in benefits to offset approved training\u00a0expenses-paying\u00a0for up to 90% of their cash outlay. When applying it with EIS, you subtract the grant you receive, then calculate the 400% EIS deduction on the remaining net expenditure on training.<\/span>\u00a0<\/span><\/p>\n Let\u2019s\u00a0say you send 5 employees on a training\u00a0programme\u00a0that costs $10,000. Your company receives a 90% ($9,000) subsidy from SFEC, so your net expenditure is $1,000. With the 400% EIS deduction applied on this $1,000, your company reduces taxable income by $4,000;\u00a0you’ve\u00a0essentially gained\u00a0$10,000 worth of training at a minimal cost.<\/span>\u00a0<\/span><\/p>\n If you are implementing an ERP system, you can layer PSG (for software), SFEC (for training), and EIS (for residual training cost deduction) to minimize your actual out-of-pocket investment.<\/span>\u00a0<\/span><\/p>\n Synergix\u00a0Technologies has helped Singaporean companies successfully manage this landscape for over 35 years alongside technological transformation. As a PSG pre-approved ERP vendor with a 100%\u00a0track record\u00a0of success in\u00a0assisting\u00a0hundreds of clients\u00a0apply\u00a0for PSG,\u00a0Synergix\u00a0is well-positioned to guide your team\u00a0through the use of\u00a0EIS for your ERP and digital transformation project.<\/span>\u00a0<\/span><\/p>\n >>> Read more: Government Grants<\/a><\/em><\/p>\n Understanding what not to do is just as important as knowing the rules. Here are the most common pitfalls businesses encounter:<\/span>\u00a0<\/span><\/p>\n The 40% Corporate Income Tax rebate (maximum $30,000) announced during the Singapore Budget 2026, is guaranteed minimum $1,500 cash grant per local worker for 2025 companies. The CIT Rebate will be applied after deduction on EIS, thus EIS & CIT Rebate work\u00a0hand-in-hand\u00a0to reduce your tax payment.<\/span><\/i>\u00a0<\/span><\/p>\n Including AI spending as eligible expenditure for EIS supports the Singapore Government’s intention to\u00a0allocate\u00a0$37 billion into the Research, Innovation and Enterprise 2030 (RIE2030) plan, which signifies more benefits for companies engaged in developing AI capabilities in the next two years.<\/span>\u00a0<\/span><\/p>\n Audit your current spending and\u00a0identify\u00a0which expenses can qualify for EIS.<\/span>\u00a0<\/span><\/p>\n Choose your benefit structure \u2013 Tax deductions for profitable companies and cash\u00a0grant\u00a0for companies with cash flow problems or a combination of both.<\/span>\u00a0<\/span><\/p>\n Ensure your training investments for employees can be qualified through SSG registered training providers.<\/span>\u00a0<\/span><\/p>\n Combine your\u00a0grants-strategically\u00a0link up your PSG, SFEC and EIS to achieve\u00a0maximum\u00a0savings for your digital transformation & employee training.<\/span>\u00a0<\/span><\/p>\n Prepare your company for AI spending claims from YA2027- IRAS is expected to roll out detailed qualifying criteria for AI expenditure on 30 June 2026.<\/span>\u00a0<\/span><\/p>\n Contact\u00a0Synergix\u00a0Technologies for a non-obligation discussion if\u00a0you’re\u00a0considering an ERP implementation and wonder how PSG, SFEC & EIS grants can be combined for your business to reap considerable savings.<\/span>\u00a0<\/span><\/p>\n This is an informative piece, not\u00a0a tax\u00a0advice. It should be used as a reference only. Please refer to\u00a0IRAS’\u00a0Enterprise Innovation Scheme e-Tax Guide and\/or contact a professional tax advisor for specific tax planning.<\/span>\u00a0<\/span><\/p>\n References:\u00a0<\/b>IRAS Enterprise Innovation Scheme\u00a0Guide<\/b><\/a>\u00a0<\/em><\/p>\nWhat is\u00a0Enterprise\u00a0Innovation Scheme (EIS)?\u00a0<\/strong><\/h2>\n
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Who is eligible For Enterprise Innovation Scheme (EIS)?\u00a0<\/strong><\/h2>\n
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Why EIS Matters for Singapore Businesses in 2026 and Beyond\u00a0<\/strong><\/h2>\n
![\"Infographic](\"https:\/\/td2htech.com\/synergixtech_dev\/\/wp-content\/uploads\/2026\/05\/singapore-eis-400-tax-deduction-example.jpg\")
The 6 Qualifying Activities\u00a0<\/strong><\/h2>\n
R&D in Singapore<\/span>\u00a0<\/span><\/h3>\n
IP Registration\u00a0<\/span>\u00a0<\/span><\/h3>\n
IP Acquisition & Licensing<\/span>\u00a0<\/span><\/h3>\n
Qualifying Training<\/span>\u00a0<\/span><\/h3>\n
Innovation Projects with Institutions<\/span>\u00a0<\/span><\/h3>\n
AI Expenditure<\/span>\u00a0<\/span><\/h3>\n
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![\"Wholesale](\"https:\/\/td2htech.com\/synergixtech_dev\/\/wp-content\/uploads\/2024\/11\/Wholesale-Software-cta1.png\")
<\/a><\/span><\/p>\nHow EIS Works with PSG and SFEC<\/span><\/b>\u00a0<\/span><\/h2>\n
Mistakes to Avoid\u00a0When Applying For EIS\u00a0<\/strong><\/h2>\n
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What’s\u00a0new in EIS with Budget 2026?\u00a0<\/strong><\/h2>\n
What to do next?\u00a0<\/strong><\/h2>\n
![\"ERP](\"https:\/\/td2htech.com\/synergixtech_dev\/\/wp-content\/uploads\/2024\/11\/ERP-System-Cost-cta1.png\")
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