In Budget 2026 (delivered 12 Feb 2026), Singapore added AI-related expenditure as a qualifying activity under the Enterprise Innovation Scheme, giving businesses a 400% tax deduction on up to S$50,000 of qualifying AI spend per Year of Assessment for YA 2027 and YA 2028. Qualifying costs cover adopting AI-enabled solutions, AI training, and AI software and services; the cash-payout election is not available for this new AI activity, though spend above the S$50,000 cap still deducts at the normal 100%.
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Singapore adds AI spend to Enterprise Innovation Scheme: 400% tax deduction for YA 2027-2028
Why this matters for founders
A Singapore founder buying or licensing AI tools, or paying for AI training in 2026-2027, should tag and document that spend now so up to S$50,000/year qualifies for the 400% deduction on the corporate tax return for YA 2027 and YA 2028.
Source: Grant Thornton Singapore
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