IRAS Commences Enterprise Innovation Scheme Cash Payouts

by | Apr 30, 2024 | Accounting, Income Tax, Tech News

The Inland Revenue Authority of Singapore (IRAS) has announced the commencement of cash payout disbursements under the Year of Assessment (YA) 2024 Enterprise Innovation Scheme (EIS) starting April 2024. Eligible businesses and individuals operating as sole proprietors or partners in partnerships will receive these payouts.

Key Disbursement Details:

  1. Payment Methods:
    • Businesses: Payouts will be credited directly via GIRO to the bank account linked with IRAS for income tax or GST payments.
    • Sole Proprietors/Partners: Payouts will be disbursed via PayNow Corporate, PayNow NRIC, or PayNow FIN.
  2. Alternative Payment Sign-up: Applicants lacking the above e-payment modes can register for PayNow. Successful registrants will receive their payout within 6 to 8 weeks.
  3. Application Amendments: Errors in EIS Cash Payout applications must be corrected by logging into the myTax Portal and contacting IRAS via myTax Mail. The email subject must state: ‘EIS Cash Payout – Amend Filing’.

Critical Compliance Requirements:

IRAS emphasizes strict adherence to the following mandates under Section 37R of the Income Tax Act 1947:

  1. Record Retention: Businesses must retain all records pertaining to expenditure claimed for the EIS Cash Payout for 7 years. This period starts from the end of the relevant YA corresponding to the basis period when the expenditure was incurred.
  2. Intellectual Property Rights (IPR) Ownership:
    • To qualify for the EIS cash payout on IPR acquisition, businesses must own the related registered IPR (or ensure the application for registration/grant is not assigned) for a minimum period of one year (the one-year ownership period).
    • Clawback Provision: Failure to meet this one-year ownership period will result in the EIS Cash Payout being clawed back by IRAS.
    • Disposal Reporting: Businesses disposing of the related IPR before the one-year period must complete and submit the “Enterprise Innovation Scheme — Disposal of Intellectual Property Rights Form” within 30 days of the disposal date.

Company Application Timeline:

  • The dedicated “Apply for EIS Cash Payout” digital service for companies will open concurrently with the availability of the Form C-S/Form C-S(Lite)/Form C filing service, starting 1 July 2024.
  • IRAS specifies that this digital service allows for only one application per YA.
  • Mandatory Process: Companies must e-file their EIS cash payout application after submitting their Income Tax Returns (Form C-S/C-S(Lite)/C) for the relevant YA. Crucially, the EIS application must be submitted no later than the Income Tax Return filing due date for that same YA.

The EIS Cash Payout is a significant component of Singapore’s enhanced support framework designed to encourage businesses across all sectors to engage in research, innovation, and capability development activities. Eligible entities are advised to note the disbursement methods, strict compliance rules, and application windows to ensure smooth receipt of their benefits. Further details and the application portal are accessible via the IRAS website and myTax Portal.