Singapore's Inland Revenue Authority (IRAS) has updated guidance on the Refundable Investment Credit scheme, which offers companies up to 50% support on qualifying expenditures and allows unused credits to be refunded in cash within four years. 

RF Report

The Inland Revenue Authority of Singapore (IRAS) has revised its guidance on the Refundable Investment Credit (RIC).

Earlier, Singapore issued the Income Tax (Refundable Investment Credits) Regulations 2025, which came into force on 1 September 2025.

What is the RIC?

Introduced in Budget 2024, the RIC seeks to enhance Singapore’s attractiveness for investments. The RIC encourages companies to make sizeable investments that bring substantive economic activities to Singapore, in key economic sectors and new growth areas. It will be awarded on an approval basis through the Singapore Economic Development Board (EDB) and Enterprise Singapore (EnterpriseSG) (collectively, the “Approving Authorities”).

The Regional Investment Centre (RIC) will focus on supporting high-value economic activities, including investments in new productive capacity such as manufacturing and low-carbon energy, expansion of digital, professional, and supply chain services, establishment of headquarters or Centres of Excellence, commodity trading operations, R&D and innovation, and decarbonisation initiatives.

How the RIC works

The RIC is awarded on qualifying expenditures incurred by the company in respect of a qualifying project, during the qualifying period. Each RIC award will have a qualifying period of up to 10 years.

The Refundable Investment Credits (RICs) can be used for set-off against the Corporate Income Tax, Domestic Top-up Tax and Multinational Enterprise Top-up Tax (including the penalties, surcharges and late payment interest relating to these taxes) (referred to as “due taxes”) of the RIC company and its nominated companies. Any unutilised credits will be refunded to the company in cash within four years from when the company satisfies the conditions for receiving the RICs.

Companies may qualify for support across a range of expenditure categories — including capital works, manpower, training, professional fees, intangible assets, local outsourcing, materials, and freight — with up to 50% support available on each. The total grant amount a company can receive is ultimately determined by the relevant Approving Authorities.

Who to contact for application of RIC

The Approving Authorities assess the companies for eligibility of the RIC scheme.

For more information and general enquiries on the RIC scheme, please contact EDB or EnterpriseSG directly.

General information on the processing of RICs

Upon approval of a company’s application for RIC, a letter of award will be issued by the Approving Authority to the company (referred to as the “RIC company”). Separately, upon verification by the Approving Authority of a claim for RICs made by the RIC company, a letter of confirmation stating the amount of RICs to be awarded will be issued to the RIC company.

The Approving Authorities will transmit the relevant information to IRAS so that the approved RICs could be credited into the RIC company’s RIC account maintained by IRAS.

At the time of the claim application made to the Approving Authority, the RIC company may elect for the RICs to be used for set off against its due taxes or to be received in cash according to a prescribed payment schedule. This election is irrevocable.

Sharing of RICs with nominated companies

As mentioned above, RICs may be used for set-off of the due taxes of an RIC company’s nominated companies. In this regard, an RIC company should apply to the Approving Authority for its nominated companies to be approved as approved nominated companies. These companies must be members of the same group^ as the RIC company. Upon approval of the nominated companies, the Approving Authority will provide IRAS with the list of the approved nominated companies of an RIC company.

After the list of nominated companies has been approved by the Approving Authority, the RIC company may submit a FormSG – Sharing of RIC with Nominated Companies (“Nomination FormSG”) to notify IRAS of the maximum amount of RICs that may be used for set-off against each nominated company’s due taxes.

Please note that the RIC company must notify the Approving Authority if there is any addition or removal of nominated companies. IRAS will only effect tax set-off based on information received from the Approving Authority. In particular, to avoid any wrongful utilisation of RICs by an earlier approved nominated company that is now no longer part of the same group as the RIC company, where an earlier approved nominated company ceases to be part of the same group as the RIC company, the RIC company must, within 7 days of the cessation:

  • notify the Approving Authority; and
  • inform IRAS via the Nomination FormSG to reduce the nomination cap for that earlier approved nominated company to SGD 0, or to the amount of RICs already utilised by that company, whichever is higher.

Recovery of RICs

The Approving Authority may recover RICs from an RIC company if it fails to meet the conditions stated in its letter of award.

Upon notification from the Approving Authority, IRAS will first recover the amount from any unutilised RICs in the company’s RIC account on a last‑in, first‑out basis. Unutilised RICs include all unused RICs from all letters of confirmation, as well as any unpaid RICs pending cash payment.

If the unutilised RICs in the RIC account are insufficient to pay off the recovery amount, the RIC company must make a cash payment to the Government for the remaining amount. This remaining amount cannot be settled using other tax credits, refunds, or tax balances.

Recovery applies to all RICs previously utilised, including RICs used to offset the tax liabilities of approved nominated companies.

Tax treatment of RICs

Under the Income Tax Act, RICs are treated as government grants.

Generally, a grant is taxable if it is given to supplement trading receipts or to defray operating expenses of the company. On the other hand, a grant is not taxable if it is given to acquire capital assets of the company. Where RICs support both capital and revenue expenditure, they are treated as revenue grants. Revenue grants are subject to tax in the YA relating to the basis period in which the RICs are given.

Based on the ITA, certain tax deductions or capital allowances are not to be given on the portion of the expenditure that is subsidised by a grant or subsidy from the Government or a statutory board. Consequently, the amount of qualifying expenditure equivalent to the RICs given would be regarded as expenditure subsidised by a government grant2 and therefore, not available for those tax deductions or capital allowances. The RIC company should claim qualifying expenditure on a net basis, after deducting the amount of the grant received.

Reversal of tax treatment arising from RIC recovery

A reversal of tax treatment may arise if RICs that were previously granted become recoverable by IRAS, such as when the RIC award is amended or revoked.

If the recovered RICs were previously taxed as income, the company must submit revised tax computations for the affected YAs. Once recovered, the qualifying expenditure is no longer treated as government‑subsidised and may qualify for a tax deduction or capital allowances (where applicable), subject to the relevant provisions of the Income Tax Act. Revised tax computations must be submitted within two months from the date of the notice of amendment or revocation, or within any extended period allowed by IRAS.