What are the common tax deductions for companies in Singapore?

A business expense is deductible if it is wholly and exclusively incurred in the production of income, is revenue rather than capital in nature, is not prohibited by the Income Tax Act, and is properly documented. Commonly deductible items include:

• Employee salaries, bonuses, employer CPF contributions at statutory rates, and staff welfare costs.
• Rent for business premises, utilities, and office running costs.
• Marketing and advertising, professional fees, and business insurance.
• Interest on borrowings taken to produce income, and bad debts that are trade-related.
• Repairs and maintenance (as distinct from improvements, which are capital).

Note an important distinction: accounting depreciation is not tax-deductible in Singapore. It must be added back in the tax computation, and your company claims capital allowances on qualifying fixed assets instead, under Sections 19 and 19A of the Income Tax Act. Other commonly disallowed items include private and personal expenses, private motor car expenses (S-plated cars), fines and penalties, and expenses incurred before the business commenced. Apexia can prepare a tax computation that captures every allowable deduction and correctly separates capital allowances from expenses.