Deductible Business Expenses

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

• Expenses are solely incurred in the production of income.

• Expenses are not a contingent liability, i.e. it does not depend on an event that may or may not occur in the future. In other words, expenses must be incurred. An expense is 'incurred' when the legal liability to pay the expenses have arisen, regardless of the date of actual payment of the money. 

• Expenses are revenue, and not capital, in nature.

• Expenses are not prohibited from deduction under the Income Tax Act.

Examples:

• Accounting fee

• Administrative expenses

• Advertisement

• Auditors' remuneration

• Bad debts (trade debtors) Bank charges Book-keeping services

• Borrowing costs as a substitute for interest expense or to reduce interest costs

• Commission

• CPF, skills development levy, foreign workers' levy

• CPF-related

• Statutory contributions to CPF

• Ad-hoc contributions to employees' Medisave Account

• Topping-up of Employees' CPF Minimum Sums

• Voluntary cash contributions to self-employed persons' Medisave Account

• Directors' fees

• Directors' remuneration

• Employee Equity-Based Remuneration (EEBR) Scheme

• Employment Assistance Payment (EAP)

• Entertainment

• Exchange loss (trade and revenue in nature)

• Exhibition expenses

• Employee's income tax borne by employer (in accordance with employment contract) Insurance premium Insurance for underwriting bad trade debts Interest expenses

• Interest incurred on late payment of fees to a Management Corporation for a Strata Title Plan (MCST) Interest incurred on loans to re-finance prior loans or borrowings

• Intellectual property (IP) licensing expenditure

• Legal and professional fees (trade and revenue transactions)

• Medical expenses (restricted to 1%/ 2% of total remuneration if company is under Portable Medical Benefits Scheme (PMBS) or Transferable Medical Insurance Scheme (TMIS)

• Motor vehicle expenses (such as upkeep, maintenance, running and financing costs of goods / commercial vehicles, e.g. van, lorry and bus)

• Office upkeep

• Periodicals & newspapers Postage Printing and stationery Property tax Provision for bad and doubtful debts (specific) (note impairment loss on trade debts) Provision for obsolete stocks (specific)

• Reinstatement costs (expenses incurred to reinstate premises to its original condition prior to vacating  it at the end of the tenancy agreement)

• Rental of business premises Registration of patents, trademarks, designs and plant varieties Repairs and maintenance Research and development

• Retrenchment payments - Contractual retrenchment payments & Ex-gratia retrenchment payments and outplacement support costs, where there is no complete cessation of business

• Secretarial fees

• Staff remunerations (salary, bonus and allowances)

• Staff training

• Staff welfare/benefits ** 

• Statutory and Regulatory expenses

• Stock obsolescence

• Supplementary Retirement Scheme (SRS)

• Tax fees (service fees paid to tax agent)

• Telephone bills

• Transport (public transport and goods / commercial vehicles)

• Travelling

• Wages

• Water & electricity

Source: https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Business-Expenses/