Qualifying Activities
Businesses may claim double tax deduction on qualifying expenses incurred in the following four qualifying activities up to the specified expenditure cap, without the need to seek prior approval from Enterprise Singapore or STB:
- Overseas business development trips/ missions;
- Overseas investment study trips/ missions;
- Overseas trade fairs; and
- Local trade fairs approved by Enterprise Singapore or STB.
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 website for the eligibility criteria, list of qualifying activities and the corresponding qualifying expenses on which double tax deduction can be claimed.
Specified Expenditure Cap
The expenditure cap for the automatic double tax deduction under the scheme 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 Dec 2025.
The following table illustrates the expenditure cap:
| Expenditure incurred during the period | Expenditure cap on which automatic double tax deduction can be claimed
|
|---|
| 1 Apr 2012 to YA 2018 | $100,000 per YA |
| YA 2019 to 31 Dec 2025 | $150,000 per YA |
Extension of Scheme to Qualifying Salary Expenses Subject to Approval
To provide greater support for businesses expanding overseas and create skilled jobs for Singaporeans, the scheme was further enhanced to include qualifying salary expenses incurred between 1 Jul 2015 and 31 Dec 2025 for Singaporean and Permanent Resident employees posted to an overseas establishment of the approved firm or company. The total amount of qualifying salary expenses incurred for employees posted overseas (Section 14KA) and qualifying overseas investment development expenses (Section 14K) incurred on airfare, hotel accommodation, etc. to be allowed further/ double tax deduction is capped at $1 million per approved entity per YA, subject to conditions. Businesses will have to apply to Enterprise Singapore to enjoy the double tax deduction on qualifying salary expenses incurred from 1 Jul 2015 to 31 Dec 2025.
Enhancement of Scheme to Expand the List of Qualifying Expenses
To continue encouraging internationalisation, the scheme was enhanced in Budget 2020 to expand the list of qualifying expenses to include the following expenses with effect from 1 Apr 2020:
1) Third party consultancy costs relating to new overseas business development to identify suitable talent and build up business network; and
2) Expenses incurred for overseas business missions for:
- speaking spots to pitch products/ services at overseas business and trade conferences;
- transporting materials/ samples used during the business missions; and
- engaging third party consultants to arrange business networking events to promote products/ services.
Qualifying Period of Scheme
The Double Tax Deduction for Internationalisation Scheme will apply over the following qualifying period:
- Automatic double tax deduction will apply for qualifying expenditure incurred from 1 Apr 2012 to 31 Dec 2025; and
- Approval window for qualifying expenditure incurred in excess of specified expenditure cap and on other qualifying activities will be from 1 Apr 2012 to 31 Dec 2025.