As a small business owner in Singapore, maximising your tax deductions is crucial for maintaining a healthy bottom line. While you’re likely aware of common deductions, there are several lesser-known ones that could significantly reduce your tax burden. Here are five tax deductions you might be missing out on:
Under Section 14N of the Income Tax Act, businesses can claim up to S$300,000 in R&R expenses over a fixed 3-year period. This covers items like electrical installations, flooring, and partitions that don’t affect the building’s structure. From YA 2025, even designer fees for non-structural work will be included.
Deduct up to 1% of total employee remuneration for medical expenses, including insurance premiums. This cap increases to 2% if you implement portable medical benefits schemes. Ad-hoc MediSave contributions (up to S$2,730 per employee annually) can also qualify for additional deductions.
Claim deductions for both in-house and external training under the Productivity and Innovation Credit (PIC) scheme. Qualifying expenses include course fees, training materials, and trainer salaries. Remember, in-house training must, in general, be conducted by a WSQ in-house training provider. Additionally, spontaneous consultations or informal coaching don’t qualify.
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Enjoy up to 250% tax deduction on qualifying R&D expenditure. This covers staff costs, consumables, and even outsourced R&D activities. Ensure your R&D activities are systematic, involve technical risk, and aim to acquire new knowledge or create new products/processes.
Donations to Institutions of Public Character (IPCs) qualify for a 250% tax deduction. This isn’t limited to cash – shares, artworks, land, and even naming rights can be tax-deductible donations. Just ensure there’s no material benefit received in return for the donation.
While these deductions can significantly reduce your tax liability, it’s crucial to keep accurate records and receipts to support your claims. When in doubt, always consult with a qualified tax professional to ensure you’re maximising your deductions while staying compliant with Singapore’s tax laws. By taking advantage of these often-overlooked deductions, you can keep more money in your business and fuel its growth. Stay informed, and don’t leave money on the table when it comes to your taxes!
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