Scope and edition
IRAS’s second edition of 30 January 2026 explains independent valuations supporting section 19B writing-down allowances (WDA) for acquired intellectual property rights used in a trade or business. It addresses when a report is required and what evidence it must contain; it is not a valuation-method manual or a substitute for meeting the other statutory WDA conditions. Partners can also claim on qualifying expenditure incurred by a partnership. The first edition was issued on 27 June 2018.
Qualifying rights and excluded information
Eligible categories are patents, copyright, trademarks, registered designs, geographical indications, integrated-circuit layout designs, trade secrets or commercially valuable information, and plant varieties. Copyright and commercially valuable information do not extend to customer lists and requirements collected in business, ordinary work-process information such as standard operating procedures, compilations of those categories or other matters prescribed by the Minister. Industrial information or techniques likely to assist manufacturing or processing goods or materials are distinguished from the ordinary work-process exclusion.
The claim cannot exceed acquisition-date market value
Qualifying capital expenditure excludes legal fees, registration fees, stamp duty and other acquisition-related costs. The expenditure on the qualifying rights is eligible only to the extent it does not exceed their open-market price on acquisition; the Comptroller may use that price where expenditure is higher. If market-price information is unavailable, economic life, forecast revenue and profit, and discount rates can help determine the qualifying amount.
Mandatory report thresholds from YA 2026
For YA 2026 onward, an appropriate valuer must determine open-market value where acquisition capital expenditure is at least S$10 million in a related-party transaction, or at least S$40 million in an unrelated-party transaction. Equality meets the threshold. Parties are related if one directly or indirectly controls the other, or both are under common direct or indirect control. Submit the independent report with the prescribed section 19B declaration when filing the income-tax return for the first YA in which WDA is available. Paragraphs 5.1.2 and 5.1.5 are expressly identified as having legal force.
Business acquisitions, asset bundles and market evidence
Where rights are bought with a business or other assets, distinguish qualifying and non-qualifying rights and explain the allocation to the qualifying rights relative to the entire price and other assets. State the valuation purpose. Reliable available market-price evidence may be considered by the Comptroller instead of an independent report; this is a matter for consideration, not automatic acceptance of an unsupported purchase price.
Disposal charges and a possible fresh valuation
When sale proceeds exceed tax written-down value, the difference is taxable in the disposal year, capped at WDA previously granted. If disposal consideration is below disposal-date open-market value, the Comptroller may substitute market value. A valuation report need not be submitted when disposal value exceeds original acquisition value. Where it is below original acquisition value, the Comptroller may request a report prepared by an appropriate valuer. The guide describes greater-than and less-than cases and does not separately specify the equal-value case.
Independence and the valuer’s credentials
Neither the valuer nor their firm may be related to the seller or buyer or have an interest in the acquisition or disposal. Disclose other current assignments or assignments for the company within the two years before the report date and demonstrate the absence of conflicts. Give the valuer’s name, qualifications and awarding institute, relevant licences, registrations and memberships, and experience with similar rights or industries. Examples of relevant qualifications include Chartered Valuer and Appraiser, Chartered Financial Analyst and Chartered Accountant.
Thirteen required report components
A report must allow a reviewer to understand and replicate the valuation process and trace its conclusion. It should demonstrate conformity with internationally accepted standards, including but not limited to International Valuation Standards. Paragraph 6.2’s legally enforceable components are business background and value drivers; valuer credentials; valuation date; definition of value; disclaimers and limitations; information relied on; material risks; valuation purpose; engagement terms; types of rights; approaches and methods; assumptions and inputs; and the conclusion.
Business background must support the forecasts
Explain industry drivers, outlook and growth prospects; business segments, geographical markets and segment revenue; product and service lifecycles and competitors’ alternatives; customer and competitor profiles; competitive position and market share; historical performance of products using the rights; and their economic and market outlook. Explain how the rights support strategy and competitive advantage and their risks and opportunities. Different revenue-generating segments need separate analysis. The relevant background may be the seller’s, buyer’s or both: forecasts drawn from the seller’s history need the seller’s context. The guide points to IPOS’s Intangibles Disclosure Framework 2023 for illustrations.
Date, value definition, sources and risk disclosures
Use a valuation date close to the acquisition so it represents transaction-date market conditions, taking account of material information up to that date. Open-market value means the arm’s-length price between a willing buyer and seller at the valuation date. Explain any limitation or disclaimer and its effect. Identify relied-on information and sources, particularly company-supplied data, and make the empirical evidence available. Describe material risks in enough detail to demonstrate that the valuation considered them.
Purpose and engagement terms; reusing a PPA report
Document clear instructions to the valuer in an engagement letter and include the engagement terms in the report; the valuer’s fee need not be disclosed. Transfer-pricing or financial-reporting valuations can be accepted if they contain enough relevant evidence to reliably determine the qualifying rights’ value. A purchase-price-allocation report stating only an IP value without explaining the valuation is insufficient. A fully supported PPA may be accepted case by case. Otherwise the Comptroller may request a new valuation.
Separate rights and exclude value not yet created
For marketing-intangible bundles, separately analyse the qualifying trademark and exclude non-qualifying customer data, relationships and sales or marketing information. Different qualifying categories such as technology and trademarks are also expected to have separate valuations where drivers and methods differ. Value only rights present at acquisition. Do not include new rights or economic-life extensions from R&D yet to be undertaken. If acquired technology enables future research, justify its own contribution to later benefits, distinguishing subsequently created rights and considering development uncertainty over time and technological obsolescence.
Choosing and corroborating valuation methods
Explain why the chosen approach and method suit the rights and company. Consider the nature of the asset, strengths and weaknesses of alternative methods, and available information’s reliability. More than one approach may be used to corroborate the result where a particular method has limitations. The source requires justification; it does not prescribe one universal formula for all rights.
Economic life: evidence beyond the legal term
Substantiate economic life using legal, technological, functional and economic factors. Consider legal term and protection scope, expected use, related product or service lifecycles, technical and commercial obsolescence, industry concentration or fragmentation, changing demand and competition. A proven established trademark may support a perpetual economic life, while technology generally has a finite life because of obsolescence. Neither example is an automatic assumption. Future unperformed R&D cannot extend the acquired asset’s life for this valuation.
Revenue and profit forecasts belong to the claimant
Provide the rights’ historical performance, including while held by the seller, future projections, industry and market outlook, product replacement cycles and historical and expected market share. Explain risks, uncertainties and forecasts more optimistic than industry expectations. Include only benefits accruing to the claimant. In the guide’s Countries A, B and C example, Country A sales booked by another group entity are excluded from the owner’s revenue forecast. If that entity licenses the IP, the owner may include its licensing income, not the entity’s entire sales revenue that also rewards its selling and marketing activity.
Royalty comparables and discount rates
Justify a royalty rate with comparable licences and explain both adjustments made and decisions not to adjust. Disclose licensors’ and licensees’ industries and relationships, including joint-venture or profit-sharing elements; the IP type and territorial, exclusive, duration and limitation terms; development stage or established profitability; and compensation structures such as changing rates, upfront or periodic payments. Show discount-rate calculations and their basis, and analyse whether additional risk premiums are needed for uncertainty in IP-related cash flows.
A point estimate is needed for the claim
Explain how the conclusion follows from the analysis. Different approaches may produce a range, but the valuer must select and justify a single point value for the section 19B claim. A range alone does not identify the amount on which the claim rests.
Below-threshold evidence and five-year records
Below the thresholds, an independent report need not be prepared, but IRAS can request support. Keep proof of qualifying rights and transfer of legal and economic ownership; historical and projected benefits; assumptions, business contribution, economic life and market or competitor analysis; valuation workings; and evidence the value does not exceed market price. Also retain sale and purchase agreements, trademark registrations, patent documents, royalty or licence agreements, post-acquisition actual revenue and profit, acquisition-date industry reports, and contemporaneous forecast and discount-rate evidence. Section 7’s legally enforceable retention requirement is five years from the relevant YA, with production on request.
2026 changes and enquiries
The 2026 edition reorganises the thirteen report components and clarifies unavailable market-price evidence, asset-bundle allocations, higher thresholds effective YA 2026, disposal charges and reporting, accepted valuation standards, business value drivers, future-right exclusions and support for assumptions. Its eight annex questions explain seller/buyer background, reuse of other-purpose reports, separate categories, undisclosed fees, below-threshold evidence, existing versus future technology, claimant-only benefits and record examples. The source lists the Corporate Tax helpline 1800-3568622 and ctmail@iras.gov.sg for clarification.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗