Singapore brings Refundable Investment Credits regime into force
The Singapore government brought the Income Tax (Refundable Investment Credits) Regulations 2025 (S 577/2025) into force on 1 September, which introduce tax credits of up to 50% for qualifying business investments under the Global Anti-Base Erosion (GloBE) Rules of the OECD/G20 Pillar Two framework.
Pillar Two consists of two main rules that seek to ensure that multinationals pay a minimum level of tax on their profits. The GloBE Rules are the main Pillar Two Rules and apply a 15% minimum rate of tax on in-scope multinationals on their foreign profits.
The refundable investment credit (RIC) scheme was introduced by the Singapore government in 2024 to enhance Singapore’s attractiveness for investment by encouraging companies to make sizeable investments that bring substantive economic activities to Singapore in key economic sectors and new growth areas.
The scheme operates as a refundable credit framework to align with the OECD’s qualified refundable tax credit (QRTC) criteria. This alignment enables supported businesses to undertake substantive activities locally while maintaining compliance with international tax standards.
QRTCs are treated as income for Pillar Two GloBE purposes, as opposed to being reflected as a reduction in adjusted covered taxes. By including them in the denominator rather than the numerator of the effective tax rate calculation, it generally lessens the decrease in the jurisdictional effective tax rate.
In Singapore, RICs are awarded based on qualifying expenditure incurred by a company in respect of a qualifying project during the qualifying period. Each RIC award has a qualifying period of up to 10 years.
Eligible activities include investments to expand manufacturing capacity, establish headquarters or service centres, conduct R&D and innovation, engage in commodity trading or carry out energy efficiency or decarbonisation projects. Credits can be applied against corporate income tax, and any unused credits are refundable in cash within four years from the claim application.
Qualifying expenditures cover capital investment, manpower, training, professional services, intangible assets, materials, logistics, and financing costs. When approving RICs, authorities consider the scale and impact of the investment on the company’s business or industry, including effects on resource efficiency and environmental sustainability. Companies may opt to receive credits in tranches of 20%, 30% and 50% over two to four years.
