(ip) hub master plan - Ministry of Law

Unilateral tax credit for royalty income to offset withholding tax liabilities
with countries without a double tax agreement with Singapore;
Lower withholding tax on royalty payments;
EDB’s Development and Expansion Incentive (DEI) scheme that provides
concessionary tax rates on qualifying IP income for substantive activities in
Singapore.
7.2.6. Singapore also has an extensive Double Taxation Agreement (DTA) network with
our major trade partners, which reduces withholding tax on royalties. Nonetheless,
in the face of increased global competition as countries start to expand their DTA
networks, Singapore should study whether our current tax regime remains
attractive to technology, franchising and licensing companies, and whether more
enhancements are required to strengthen our position as a choice destination from
which to transact, manage and commercialise IP.
Recommendation 6-1
Implement an IP Box or similar tax regime to provide greater transparency and
certainty in Singapore’s IP tax regime.
7.2.7. The Committee recommends that the Government adopt an IP Box or equivalent
tax regime, even for IP not created in Singapore. The Committee notes that EDB’s
DEI scheme also incentivises IP-related income such as licensing revenue and
trading gains, and has been successful in attracting MNCs to manage their IP
portfolios from Singapore. However, this can be enhanced with a broad-based
scheme like the IP Box which confers greater transparency and certainty on the tax
incentives. It also sends a strong signal of the Government’s commitment to
develop Singapore into a Global IP Hub in Asia and grows Singapore’s global IP
reputation. To enjoy the tax benefits of the IP Box, IP owners must have
substantive management and decision-making functions anchored here.
7.3. A PROGRESSIVE IP ENVIRONMENT THAT PROMOTES ADVANCED IP THINKING
7.3.1. We must aim to build an environment that reflects a progressive and forward
looking approach in all aspects of the IP discipline. Singapore should seek to be the
hotbed where innovative IP business models and services, or innovations
themselves, especially those targeting the Asian market, are tested and launched.
With its global and regional interconnectedness, Singapore should seek to be the
Asian nexus for discourse and research on the latest global and regional IP trends
and developments, and how IP regimes, businesses and services should adapt and
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