Under Sections 14B, 14H and 14I of the Income Tax Act 1947, your company may claim double tax deduction on qualifying expenses incurred in the following 9 qualifying activities up to the specified expenditure cap, without the need to seek prior approval from Enterprise Singapore (ESG) or Singapore Tourism Board (STB):
- Overseas business development trips/ missions
- Overseas investment study trips/ missions
- Overseas trade fairs
- Local trade fairs approved by ESG or STB
- Virtual trade fairs approved by ESG*
- Product/ service certification approved by ESG*
- Overseas advertising and promotional campaigns*
- Design of packaging for overseas markets*
- Advertising in approved local trade publication*
Your company must maintain documentation as proof of expenditure and purpose and submit them upon IRAS' request.
Your company may also apply to ESG or STB for case-by-case approval to claim double tax deduction on:
- Qualifying expenses incurred on qualifying market expansion and investment development activities that exceed the specified expenditure cap
- Expenditure incurred for other qualifying activities
[NEW!] With effect from 15 Feb 2023 , your company may claim double tax deduction on qualifying startup expenses incurred for "e-commerce campaign". The qualifying expenses covered under this new qualifying activity are e-commerce related business advisory, account creation, content creation, and product listing and placement expenses. All double tax deduction claims under the “e-commerce campaign” activity require ESG’s approval. The approval is subject to a one-year time limit, applied on a per-country basis.
Learn more about the eligibility criteria, list of qualifying activities and the corresponding qualifying expenses on which double tax deduction can be claimed at ESG's website.
Specified Expenditure Cap
The expenditure cap for the automatic double tax deduction under the scheme is $100,000 per Year of Assessment (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
|Specified Expenditure Cap
|1 Apr 2012 to YA 2018
|$100,000 per YA
|YA 2019 to 31 Dec 2025
|$150,000 per YA
Enhancements to the Scheme
To provide greater support for businesses expanding overseas and to create skilled jobs for Singaporeans, the scheme has been 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 14I) and qualifying overseas investment development expenses (Section 14H) incurred on airfare, hotel accommodation, etc. to be allowed double tax deduction is capped at $1 million per approved entity per YA, subject to conditions.
Businesses have to apply to ESG to enjoy the double tax deduction on qualifying salary expenses incurred from 1 Jul 2015 to 31 Dec 2025.
- With effect from 1 Apr 2020, the list of qualifying expenses has been expanded to include the following expenses:
- Third party consultancy costs relating to new overseas business development to identify suitable talent and build up business network
- Expenses incurred for overseas business missions (subject to ESG's approval) for:
- Speaking spots to pitch products/ services at overseas business and trade conferences
- Transporting materials/ samples used during the business missions
- Engaging third party consultants to arrange business networking events to promote products/ services
- To continue supporting the internationalisation efforts of businesses, the scope of qualifying expenses has been expanded to cover the following fees incurred on or after 17 Feb 2021:
- Specified fees incurred on approved virtual trade fairs:
- Package fees charged by event organisers for virtual exhibition hall and booth access, collateral creation, business meeting/ match sessions, pitches/ product launches/ speaking slots, webinar/ conference and post event analytics
- Third party costs incurred to design and produce digital collaterals and promotion materials for the virtual trade fair
- Logistics costs incurred to send materials/ samples overseas to potential clients met at the virtual trade fair. The following conditions need to be met:
- Both the business and the recipient of the materials/ samples have attended the approved virtual trade fair; and
- The materials/ samples are sent within 6 months from the end of the approved virtual fair.
- Logistics costs to transport materials/ samples used during overseas investment study trips/ missions
- Specified fees incurred on approved virtual trade fairs:
[NEW!] To support businesses in their efforts to overcome initial challenges and build up capabilities in internationalising via e-commerce, the scope of qualifying expenses has been expanded to cover certain expenses incurred on or after 15 Feb 2023 on a new qualifying activity “e-commerce campaign”.
The scope of qualifying expenses under the “e-commerce campaign” activity will cover the following e-commerce campaign startup expenses paid to e-commerce platform or service providers:
|a. Business advisory
|b. Account creation
|c. Content creation
|d. Product listing and placement
All double tax deduction claims under the “e-commerce campaign” activity require ESG’s approval. For each business, ESG will only approve such claims for e-commerce campaigns for a maximum period of one year per country.
The Double Tax Deduction for Internationalisation Scheme applies for the following qualifying period:
- Automatic double tax deduction applies for qualifying expenditure incurred from 1 Apr 2012 to 31 Dec 2025.
- The approval window for qualifying expenditure incurred in excess of the specified expenditure cap and on other qualifying activities is from 1 Apr 2012 to 31 Dec 2025.