By MoneyBees
See what the EIS 400% tax deduction saves your company on R&D, IP, training, projects with polytechnics or ITE, or AI adoption, and whether the 20% cash payout is worth more to you this year.
400% on up to $400,000 a year for this activity.
After any government grant or subsidy.
Up to S$100,000 a year, paid at 20%.
Tax saved
$68,000
on a $400,000 deduction
Cash payout
$0
none converted
Total benefit
$68,000
vs $17,000 at a plain 100% deduction
$100,000 on training on swda-funded courses gives a deduction of $400,000. On chargeable income of $1,000,000 that cuts tax from $152,575 by $68,000, at 17% after the partial tax exemption.
Each S$1 converted pays 20 cents but gives up a 400% deduction worth up to 68 cents of tax at 17%. The cash wins when your company has little or no taxable income.
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| Activity | 400% on up to | Above the cap | Cash payout |
|---|---|---|---|
| R&D done in Singapore | S$400,000 | 100% + 150% | Yes, in part |
| Registering IP | S$400,000 | 100% | Only all of it, up to S$100,000 |
| Buying or licensing IP rights (revenue under S$500m) | S$400,000 combined | 100% | Licensing in part; buying only all of it |
| Training on SWDA-funded courses | S$400,000 | 100% | Yes, in part |
| Projects with polytechnics, ITE or other qualified partners | S$50,000 | Not stated by IRAS | Yes, in part |
| AI adoption, YA 2027 and YA 2028 (Budget 2026) | S$50,000 | 100% | No |
From IRAS's EIS page and e-Tax Guide, read 4 Oct 2026. Caps are per Year of Assessment and per activity. The cash payout covers up to S$100,000 of spend across all activities except AI adoption. Tax figures here leave out the YA 2026 CIT Rebate (50% of tax, up to S$40,000).
A company with S$1,000,000 of chargeable income spends S$100,000 on SWDA-funded courses for its staff in the basis period for YA 2026. The EIS gives a 400% deduction: S$400,000.
Tax falls from S$152,575 to S$84,575, a saving of S$68,000. A plain 100% deduction would save S$17,000. Converting the S$100,000 instead pays S$20,000 in cash and leaves no deduction on it.
An IRAS scheme for YA 2024 to YA 2028 that gives a 400% tax deduction or allowance on qualifying spending on R&D in Singapore, IP registration, buying or licensing IP rights, approved training, projects with partner institutions and, from YA 2027, AI adoption.
Up to S$400,000 a year for each of R&D, IP registration, IP acquisition and licensing (combined), and training. Projects with polytechnics or ITE, and AI adoption, are capped at S$50,000 a year each.
R&D above S$400,000 still gets 100% plus an additional 150%. IP registration, IP acquisition and licensing, training and AI adoption above the cap get the normal 100%. IRAS does not state a deduction for spending on projects with partner institutions above S$50,000.
You can convert up to S$100,000 of qualifying spending a year, across all activities except AI adoption, into cash at 20%, so at most S$20,000. The payout is not taxable. Spending you convert gets no tax deduction at all, and the choice cannot be undone.
Businesses with active operations in Singapore that paid CPF for at least 3 full-time local employees for at least 6 months of the basis period, and that file their tax return on time. Each employee must be a citizen or PR earning at least S$1,400 a month.
For a profitable company, the deduction: S$1 of spending deducted at 400% saves up to 68 cents of tax at 17%, against 20 cents in cash. The payout helps a company with little or no taxable income that needs cash this year.
The unused part is treated as a trade loss or allowance. It can be carried forward, carried back to the previous Year of Assessment, or transferred under group relief, subject to the usual conditions.
AI adoption was added as a qualifying activity for YA 2027 and YA 2028, with a 400% deduction on up to S$50,000 a year and no cash option. The Sectoral AI Centre of Excellence for Manufacturing was added as a qualified partner for the same years.
These calculators provide general estimates for educational purposes only and are not personalised financial advice. Results may rely on rates and rules that change over time, so verify against official sources (IRAS, CPF Board, HDB, MAS) or consult a licensed financial adviser before making decisions.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).