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What are deductible business expenses

Deductible business expenses reduce a company’s taxable income and the amount of tax a company needs to pay.

In Singapore, generally, deductible business expenses are those ‘wholly and exclusively incurred in the production of income’. In other words, they must satisfy all these conditions:

Non-deductible business expenses are activities a company pays for that do not fulfill the conditions above. These include personal expenses (such as travel, or entertainment not related to the running of the business) and capital expenses (such as expenses incurred to incorporate a company and the purchase of fixed assets).

Examples of deductible & non-deductible business expenses

Accounting feeAdministrative expensesAdvertisementAuditors’ remunerationAmortisation
Bad debts (trade debtors)Bank chargesBook-keeping servicesBad debts (non-trade debtors)
CommissionsCarbon creditsVoluntary contributions to CPF
Directors’ feesDirectors’ remunerationDepreciationDividends on preference sharesDonations (except to recognised charities)
Employee equity-based remunerationEmployee expenses including CPFEntertainmentExchange losses (trade nature)Exhibition expensesExpenses incurred before commencement of businessFixed assets write-offFixed assets capital costsFines
Income tax of employee borne by employerInsurance premiumInterest expensesIntellectual property licensing expensesGoodwill paymentsSingapore income tax and any tax on income in country outside of Singapore
Legal and professional fees (trade nature)Medical expensesMotor vehicle expensesLegal and professional fees (non-trade nature)
Office upkeepProperty taxPrinting and stationeryProvision for bad and doubtful debts (impairment on trade debts)PenaltiesPrepaid expensesPrivate and domestic expensesPrivate hire car
Rental of business premisesRegistration of patents and trademarksRepairs and maintenanceResearch and development expensesRenovation or refurbishment worksRetrenchment expenses during cessation of business
Secretarial feesStaff training, welfare and benefitsFees paid to tax agentTelephone and utilitiesTransport and travelWagesWithholding taxes on interest payments borne by companies on behalf of non-residents

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