IRAS published its updated Enterprise Innovation Scheme e-Tax Guide on 31 Aug 2026, formalising a Budget 2026 change that grants a 400% tax deduction on up to S$50,000 of qualifying AI-adoption expenditure per Year of Assessment, for YA 2027 and YA 2028. At the 17% corporate rate that is roughly S$34,000 in tax savings per year. Unlike other EIS categories, the AI activity cannot be converted into a 20% cash payout.
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IRAS EIS guide adds 400% tax deduction on AI spend for YA 2027 and 2028
Why this matters for founders
A Singapore-incorporated startup that buys or builds AI tools should track qualifying AI spend now and time material purchases into YA 2027 or YA 2028 to claim the full S$50,000 at 400%. Because the cash-payout option does not apply, the benefit only lands for companies with taxable profit, so pair the claim with profit planning.
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