IRAS has updated the administrative procedures for applications and claims under Singapore’s Refundable Investment Credit (RIC) scheme.
The update clarifies the roles of the approving agencies, the claim verification process, utilisation options, and the procedures for sharing credits with nominated group companies.
Key development
Under the updated process, the Singapore Economic Development Board and Enterprise Singapore act as the approving authorities for determining whether companies qualify for the RIC scheme. Once an application is approved, the relevant authority will issue an award letter to the applicant company. Separately, after the company submits a claim and the claim is verified, a confirmation letter will specify the amount of RICs granted.
The approving authorities will provide the necessary details to IRAS, which will record the approved credits in the company’s RIC account. The company may choose either to apply the RICs against tax liabilities or to receive the credits in cash based on the applicable payment schedule. This choice must be made during the claim application process and cannot be changed afterwards.
Impacts on tax, reporting and compliance
Tax cash flow planning
Companies eligible for RICs will need to assess whether it is more beneficial to use the credits to offset tax payable or receive them as cash. The irrevocable nature of the election means the decision should be supported by forecast tax positions, expected cash requirements and group-level financing considerations.
Financial reporting considerations
RICs may affect the timing and presentation of income tax balances, receivables or government incentive income, depending on the applicable accounting treatment. Management should consider when there is sufficient certainty that the credit will be received and whether recognition is appropriate at award, claim verification, or another point based on the relevant accounting framework.
Group tax management
The ability to share RICs with nominated group companies creates planning opportunities, but also increases administrative responsibilities. Companies will need to monitor group relationships, nomination caps and utilisation levels to ensure that offsets are applied only within the approved parameters.
Audit and documentation
Auditors are likely to focus on eligibility, claim verification, management’s accounting assessment and the recoverability or utilisation of recognised RIC balances. Companies should retain approval letters, confirmation letters, claim documentation, nomination forms and correspondence with the approving authorities and IRAS.
Practical issues
- Irrevocable election risk: Companies must decide between tax offset and cash receipt at the claim stage. Errors in forecasting future tax liabilities could result in a less favourable outcome.
- Coordination with approving authorities: The RIC process involves both the approving authority and IRAS. Delays or inconsistencies in information submitted to either party may affect crediting, utilisation or payment.
- Nomination form requirements: Where RICs are shared with nominated companies, the RIC company must notify IRAS of the maximum amount that each nominated company may use to offset tax. This requires careful tracking of nomination limits and actual utilisation.
- Changes in group structure: If a nominated company ceases to be part of the same group, both the approving authority and IRAS must be informed within seven days of cessation. The nomination cap must also be reduced to nil or to the amount already utilised by that company, whichever is higher.
- Systems and controls: Tax teams may need to update internal processes to track RIC balances, elections, nomination caps, claim status, approval documentation and utilisation across group companies.
- Regulatory updates: IRAS has also included the updated Income Tax (Refundable Investment Credits) Regulations 2025, as amended on 1 April 2026. Companies should review the amended regulations together with the administrative guidance.
Action points
Companies intending to apply for or claim RICs should review their internal approval, tax forecasting and documentation processes before making a claim. Groups that plan to allocate RICs to related companies should establish clear controls over nominations, utilisation limits and changes in group membership.
Tax and finance teams should also consider the accounting implications of RIC recognition and ensure that supporting evidence is available for both tax compliance and audit purposes.