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Guide on the Double Tax Deduction Scheme in Singapore

Written by: Bridgewest


Why was the DTD enabled in Singapore?

The main purpose of the Double Taxation Deduction Program was to help Singapore and foreign companies operating in Singapore through subsidiaries and branch offices (permanent establishments) to save even more money on the expenses related to the expansion of their activities in countries Singapore has signed treaties for the avoidance of double taxation. Activities related to the development of investments made in those countries are also eligible for the DTD Scheme. Under the program, Singapore companies will benefit from financial aid granted by the Government.

In order to qualify for the DTD Scheme, a company must first of all carry out promotion activities related to the trading of all kinds of goods or services. Also, the companies must not benefit from other programs enabled by the Government.

What are the benefits for Singapore companies?

Companies qualifying for the DTD Scheme will benefit from 20% deductions from the income tax on the expenses and investments eligible under the program. These expenses must be related to:

  • -          trips organized for the development of the company’s activities outside Singapore;
  • -          participation to various fairs;
  • -          market studies;
  • -          advertising campaigns carried outside of Singapore;
  • -          due diligence studies;
  • -          franchising activities.

Considering other activities can qualify for the DTD Program, a law firm in Singapore can offer more information these conditions. Companies can claim a 200% tax deduction for the first 100,000 SGD spent on these expenses per year of assessment.

For complete information on the documents to be submitted for the Double Tax Deduction Program or for assistance in opening a branch or a subsidiary in the city-state, you can contact our attorneys in Singapore.