Double Tax Deduction for Internationalisation Scheme

To encourage internationalisation, businesses may claim automatic double tax deduction on qualifying expenses incurred from 1 April 2012 to 31 March 2020 up to a specified expenditure cap*, if they meet qualifying conditions and without approval. This is provided for under Sections 14B and 14K of the Income Tax Act.

Businesses may also apply to Enterprise Singapore or Singapore Tourism Board (STB) to claim double tax deduction on:

a. Qualifying expenses incurred on qualifying market expansion and investment development activities that exceed the specified expenditure cap*; or

b. Expenditure incurred for other qualifying activities,

on a case by case basis.

* The specified expenditure cap is $100,000 per YA for qualifying expenses incurred from 1 Apr 2012 to YA 2018 and $150,000 per YA for those incurred from YA 2019 to 31 Mar 2020.

 

Qualifying Activities

Businesses may claim double tax deduction (DTD) on qualifying expenses incurred in the following four qualifying activities up to the specified expenditure cap, without approval from Enterprise Singapore or STB:

  1. Overseas business development trips/ missions;
  2. Overseas investment study trips/ missions;
  3. Participation in overseas trade fairs; and
  4. Participation in approved local trade fairs.

Businesses should maintain documentation as proof of expenditure and purpose. Expenditure exceeding the specified expenditure cap will require approval from Enterprise Singapore or STB. Please refer to Enterprise Singapore's webpage on the “Double Tax Deduction for Internationalisation (DTDi)" for the eligibility criteria, list of qualifying activities and the corresponding qualifying expenses where double tax deduction can be claimed.

Specified Expenditure Cap

The current expenditure cap for automatic double tax deduction under the scheme is $100,000 per Year of Assessment (YA) for qualifying expenses incurred from 1 April 2012 to 31 March 2020.  

New! To further encourage internationalisation, the Minister for Finance announced in Budget 2018 that the expenditure cap for automatic tax deduction without approval will be increased from $100,000 to $150,000 per YA with effect from YA 2019.

The following table illustrates the expenditure cap:

 Expenditure incurred during the periodExpenditure cap on which automatic double tax deduction can be claimed

 1 Apr 2012 to YA 2018 $100,000 per YA
 YA 2019 to 31 Mar 2020 $150,000 per YA
Further details of the change will be released by Enterprise Singapore and STB by April 2018.

Extension of Scheme to Qualifying Salary Expenses Subject to Approval

In Budget 2015, the scheme was further enhanced to provide greater support for businesses expanding overseas and create skilled jobs for Singapore. Double tax deduction is extended to qualifying salary expenses incurred, between 1 July 2015 and 31 March 2020, for Singaporean and Permanent Resident employees posted to an overseas establishment of the approved firm or company. The amount of qualifying manpower expenses to be allowed double tax deduction under the scheme will be capped at $1 million per approved entity per year, subject to conditions. Businesses will have to apply to Enterprise Singapore to enjoy the double tax deduction on qualifying salary expenses incurred from 1 July 2015 to 31 March 2020.

Qualifying Period of Scheme

The Double Tax Deduction for Internationalisation Scheme will apply over the following qualifying period: 

  1. Automatic double tax deduction will apply for qualifying expenditure incurred from 1 April 2012 to 31 March 2020; and
  2. Approval window for qualifying expenditure incurred in excess of specified expenditure cap and on other qualifying activities will be from 1 April 2012 to 31 March 2020.

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