On 1 September 2025, the Singapore Ministry of Finance (MOF) officially released the Income Tax (Refundable Investment Credits) Regulations 2025, marking a key milestone in the operationalization of the Refundable Investment Credit (RIC).¹ This "subsidiary legislation" builds upon the framework established under the current Singapore Income Tax Act 1947.

The subsidiary legislation provides formalized and enhanced guidance on the implementation of the RIC, including definitions of eligibility criteria, assessment factors for determining support rates and the cash payout schedule under the cash election option.

Key highlights from the subsidiary legislation

RIC qualifying activities

The activities qualifying for the RIC must align with Singapore's priority economic growth areas, such as advanced manufacturing, international trade, supply chain management, mobility, digitalization, artificial intelligence and the green economy.

The subsidiary legislation expands on the specific activities qualifying under the six broad categories supported under the RIC, as follows:

1. Investing in new productive capacity: Any investment to increase a company's productive capacity in any industry, including the manufacturing of any product
2. Expanding or establishing the scope of activities in digital services, professional services and supply chain management: Provision of digital services, professional services and services relating to supply chain management
3. Expanding or establishing headquarters activities or centers of excellence: The establishment or operation of a company's headquarters or a center of excellence in Singapore
4. Carrying out research and development (R&D) and innovation activities: Any R&D or any other activity to promote innovation
5. Implementing solutions with decarbonization objectives: Any activity relating to energy efficiency and decarbonization, including (i) improvement in energy efficiency, (ii) solar power deployment, (iii) reduction of emissions from greenhouse gases (other than carbon dioxide), and (iv) carbon capture, utilization and storage
6. Setting up or expanding activities by commodity trading firms: Undertaking any of the following: (i) physical trading of commodities; (ii) trading in commodities-derivative instruments; (iii) acting as a broker for physical trading of commodities or trading in commodities derivatives; and (iv) establishing supply chain management and other functions that relate to the physical trading of commodities

RIC qualifying expenditure

Depending on the type and scale of the project, one or more of the qualifying expenditure categories may be supported under the RIC. The subsidiary legislation elaborates on the following expenditure categories:

• Manpower costs refer to (i) any wages, salaries and bonuses paid to the company's employees who are located in Singapore, (ii) any sums contributed to the Central Provident Fund (CPF)² or other pension funds, and (iii) any cost incurred to provide any other employment benefits for the company's employees.
• Capital expenditure refers to costs incurred on the provision of a plant, property or equipment.
• Professional fees refer to any cost incurred (including as part of the cost of any goods or services) for professional services, consultancy services and technical testing services.
• Freight and logistics costs refer to any freight forwarding and logistic cost for the transportation of goods, the management of such transportation, and associated supply chain and logistics process flow.
• Materials and consumables refer to any cost of items that, upon being used, are consumed or transformed in such a manner that they are no longer useable in their original form.
• Intangible asset costs refer to any cost relating to intangible asset acquisition, cost-sharing agreement for R&D or innovation activity, licensing fees and royalty payments.
• Training costs include (i) any course fees paid to an external training provider, (ii) any salaries or allowances paid to an external training provider, and the reimbursement of any traveling or transportation expenses incurred by an external training provider to conduct training for the company's employees, and (iii) any allowances given to the employees for attending training and any traveling or transportation expenses incurred for the employees to attend training.
• Financing costs include interest payments and other related charges.

Determination of support rate(s)

The RIC offers tiered support rates of 10%, 30% and 50% of qualifying expenditures. One or more support rates may be applied to compute the RIC awarded for each type of qualifying expenditure.

In addition to assessing the project profile (including the scale and nature of the investments, as well as the economic spin-offs generated), the subsidiary legislation specifies factors that must be considered in determining the applicable RIC support rate(s), as applicable. These factors are:

• Scale and nature of the company's investment in Singapore
• Impact of the qualifying activity on the development of any of the company's trades and businesses or of any industry in Singapore
• Specifically, for companies intending to implement solutions with decarbonization objectives: (i) resource efficiency of the company's trades, businesses or the relevant industry to which the trades or businesses belong, or (ii) environmental sustainability of the company's trades and businesses

Payout schedule for cash payout election

The RIC awarded can be used to offset corporate income tax payable, including domestic top-up tax, multinational enterprise top-up tax, penalties, surcharges or interest related to the income tax liability of the awardee company or another company within the same group. Any unutilized RICs will be paid to the company no later than four years from when the company makes an RIC claim application.

The RIC also provides companies with the option to elect for the RICs to be received as cash payout instead. The cash payout election option provides companies with greater flexibility in managing their cash flows.

For companies making this election, the subsidiary legislation states that companies must submit a written election to the relevant approving authority during the claim application. The election is irrevocable and will apply to all RICs awarded under the same application. The subsidiary legislation also introduces a fixed payout schedule, as follows:

Next steps

With this enhanced clarity, companies should be better positioned to evaluate the relevance of the RIC to their investment plans, consider how it could support their businesses and engage in more-targeted incentive discussions with relevant government authorities.

Multinational enterprises with Singapore operations — both new and incumbent players — should consider taking proactive steps to align their investment plans with the formalized RIC framework. For example:

• Review project eligibility: Assess the proposed project against the detailed list of qualifying activities and expenditures set out in the subsidiary legislation to determine whether the eligibility criteria are met.
• Refine strategic outcomes: Evaluate how the proposed project aligns with the updated assessment factors.
• Tailor business plans to the updated guidelines: Develop a robust business plan that clearly demonstrates how the proposed project fulfills the RIC requirements to support effective discussions with the approving authorities.
• Engage early with the authorities: Initiate early discussions with the relevant approving authority to seek guidance, ensure mutual alignment and obtain preliminary feedback on the viability of the proposed project and eligibility for RIC support.