Addressing the value of intellectual property in advancing Singapore's competitiveness in a knowledge-based economy, an enhanced tax incentive is now available to infocomm companies based in Singapore.
Singapore, 2 March 2001 | For Immediate Release
IDA to Administer Enhanced Tax Incentive for the Writing Down of
Capital Cost on Approved Intellectual Property
Addressing the value of intellectual property in advancing Singapore's competitiveness in a knowledge-based economy, an enhanced tax incentive is now available to infocomm companies based in Singapore.
Administered by the Infocomm Development Authority of Singapore (IDA), the Writing Down Allowance (WDA) for Approved Intellectual Properties was officially announced by Dr Richard Hu, Minister for Finance at the Budget Speech on 23 February 2001.
The WDA gives greater recognition of intellectual properties as an important asset in creating value and innovation in today's economy. An attractive tax treatment of such intangible assets will encourage and spur the creation and innovation of intellectual properties in Singapore, resulting in increased competitiveness.
Companies will be able to claim writing down allowances over 5 years on the capital expenditure incurred in acquiring intellectual properties. This translates into writing down allowance of 20% of the cost for each of the 5 years.
Previously, only companies in the manufacturing sector were able to claim writing down allowances for patents and know-how. With the enhancement, the incentive now caters to a wider range of industries for more categories of intellectual properties. IDA will administer the incentive for companies in the Information, Communications and Technology (ICT) sectors. The seven classes of intellectual properties that qualify for the incentive are patents, copyrights and related rights, trade marks, registered designs, geographical indications, layout designs of integrated circuits and protection of confidential information. These represent the types of intellectual properties that are granted legal protection in Singapore.
Through the incentive, companies are now encouraged to source and purchase intellectual properties for use or development. Sources of intellectual properties include individuals, companies, research institutions or institutes of higher learning, either local or foreign.
Qualifying criteria
The applicant companies must be registered with the Registry of Companies and Businesses (RCB) and have physical presence in Singapore.
Companies must be the sole legal and economic owners of the acquired intellectual property. Although there is no cap on the expenditure cost of acquiring the intellectual property, applicants must demonstrate that substantive and useful work is carried out with the intellectual property.
Companies are required to commit an incremental Total Business Spending (TBS) equivalent to 30% of the cost of the intellectual property over the 5-year writing down period. The incremental TBS must be derived from activities relating to the use or development of the intellectual property in Singapore.
Infocomm companies who are interested to find out more about the Writing Down Allowance can channel their queries to info@ec.gov.sg.
ISSUED BY CORPORATE COMMUNICATION DEPARTMENT
INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
About Infocomm Development Authority of Singapore
The Infocomm Development Authority of Singapore (IDA) is a dynamic organisation with an integrated perspective to developing, promoting and regulating info-communications in Singapore. In the fast-changing and converging spheres of telecommunications, information and media technologies, IDA will be the catalyst for change and growth in Singapore's evolution into a vibrant global info-communications technology centre. For more information, please visit www.imda.gov.sg.
For media clarification, please contact:
Ms Chia Sher Ling
Manager, Corporate Communication
Infocomm Development Authority of Singapore
Tel: +65 6211-1840
Fax: +65 6211-2227
Email: chia_sher_ling@imda.gov.sg
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