Corporate Taxation

Frequently Asked Questions

1. Is filing a tax return necessary if my company did not gain any profits for the year?
2. Are companies allowed to pay for accommodations and travel expenses of Singapore company directors and other employees?
3. Are donations tax deductible?
4. Are employee benefits tax deductible?
5. What business expenses are deductible?

Answers

1. Is filing a tax return necessary if my company did not gain any profits for the year?

   Yes. Singapore companies are required to file a tax return annually.

2. Are companies allowed to pay for accommodations and travel expenses of Singapore company directors and other employees?

   Yes, Singapore companies are allowed to shoulder accommodation and travel expenses of directors and employees.

3. Are donations tax deductible?

   The following types of donations would qualify you for a double tax deduction (twice the donation value):

   • Cash Donations
   • Shares Donations
   • Computer Donations
   • Artefact Donations
   • Public Art Tax Incentive Scheme
   • Land and Building Donations

4. Are employee benefits tax deductible?

   Yes. Employee benefits or healthcare benefits qualify for tax deduction.

5. What business expenses are deductible?

   You can claim deduction for expenses that are incurred in the production of income. It must also be revenue in nature; the deduction must not be prohibited under the Income Tax Act; and the expenses must be incurred.

   Examples of deductible and not deductible expenses:

   Deductible expenses	Not deductible expenses
   Accounting fee Administrative expenses Advertisement Auditors' remuneration	Amortisation
   Bad debts (trade debtors) Bank charges Book-keeping services	Bad debts (non-trade debtors)
   Commission CPF, skill development levy, foreign workers' levy	CPF contributions (Voluntary*) Certificate of entitlement (COE) for motor vehicles**
   Directors' fees Directors' remuneration	Depreciation (you may claim capital allowances) Donations
   Entertainment Exchange loss (trade and revenue in nature) Exhibition expenses	Entrance fee (country club or other clubs) Exchange loss (non-trade or capital in nature)
   	Fixed assets written off Fixed assets acquisition cost Fines
   	Goodwill payment
   Impairment loss on trade debts Insurance (e.g. fire, workmen compensation) Interest expenses	Impairment loss on non-trade debts Income tax Installation of fixed assets Insurance (certain life insurance) Interest expenses (interest adjustment)
   Legal and professional fees (trade and revenue transactions)	Legal and professional fees (non-trade or capital transactions
   Medical expenses (restricted to 1% of total remuneration) Motor vehicle expenses (goods / commercial vehicles, e.g. van, lorry and bus)	Medical expenses (amount exceeding 1% of total remuneration) Motor vehicle expenses ("S" plate private passenger cars)
   Office upkeep
   Periodicals & newspapers Postage Printing & stationery Property tax Provision for bad and doubtful debts (specific)(note impairment loss on trade debts) Provision for obsolete stocks (specific)	Penalties Preliminary expenses Private and domestic expenses Private hire car Provision for bad and doubtful debts (general)(note impairment loss on trade debts) Provision for obsolete stocks (general)
   Rental of business premises Repairs and maintenance Restoration costs (according to tenancy agreement) Research and development	Renovation or refurbishment works (you may claim Section 14Q deduction for qualifying expenditure incurred from 16 Feb 2008 to 15 Feb 2013)
   Secretarial fees Staff remunerations (salary, bonus and allowances) Staff training Staff welfare/benefits Stock obsolescence
   Tax fees (service fees paid to tax agent) Telephone Transport (public transport and goods / commercial vehicles) Travelling	Transport ("S" plate private passenger cars)
   Wages Water & electricity