Page 8 - RSM Budget 2021 Highlights

CORPORATIONS AND BUSINESSES
Double Tax Deduction for
Internationalisation Scheme
Current
Under the Double Tax Deduction for
Internationalisation (“DTDi”) scheme, businesses are
allowed a tax deduction of 200% on qualifying market
expansion and investment development expenses,
subject to approval from Enterprise Singapore or
Singapore Tourism Board (“STB”).
No prior approval is required from Enterprise
Singapore or STB for tax deduction on the first
$150,000 of qualifying expenses incurred on the
following activities for each YA:
 Participation in overseas market development
trips/missions;
 Participation in overseas investment study
trips/missions;
 Participation in overseas trade fairs; and
 Participation in approved local trade fairs.
The DTDi scheme is scheduled to lapse after 31
December 2025.
Proposed changes
 To continue supporting internationalisation
efforts of businesses amid changes in the
business environment, the scope of the DTDi
scheme will be enhanced to cover the following
specified expenses incurred to participate in
approved virtual trade fairs:
 Package fees charged by event organisers
for virtual exhibition hall and booth access,
collateral creation, business meeting/
match sessions, pitches/ product
launches/speaking slots, webinar/
conference and post event analytics;
 Third-party costs for design and
production of digital collaterals and
promotion materials for virtual fairs; and
 Logistics costs incurred to send
materials/samples overseas to potential
clients met at virtual trade fairs.
 The list of qualifying expenses for overseas
investment study trips will also be expanded to
include logistics costs to transport
materials/samples used during the investment
trips.
 In addition, the scope of qualifying activities
which do not require prior approval from
Enterprise Singapore or STB will be enhanced to
cover the following additional activities, up to
the current annual expense cap of $150,000:
 Product/service certification (primarily to
increase buyer’s acceptance in overseas
markets) approved by Enterprise
Singapore;
 Overseas advertising and promotional
campaign;
 Design of packaging for overseas markets;
 Advertising in approved local trade
publication; and
 Participation in virtual trade fairs approved
by Enterprise Singapore.
Enterprise Singapore will provide further details of
the changes by 28 February 2021.
Effective date
The DTDi expanded scope will take effect for
qualifying expenses incurred on or after 17 February
2021.
Comments
 The enhancement made to the DTDi scheme is
timely and will greatly benefit businesses that
are keen and are continuing to explore new
market overseas despite the pandemic. The
increase in the scope of qualifying activities
which do not require prior approval is also
welcomed as it reduces administrative burden
for taxpayers.
 With the change in global business environment
amid the current pandemic, an increasing
number of event organisers and exhibitors are
bringing customers and suppliers together via
virtual means since physical meetings and
travels are still very much curtailed. Businesses
therefore are expected to incur such additional
costs associated with virtual events.
 The design and production of digital collaterals
and the re-designing of product packaging are
additional business costs which might not have
been necessarily incurred before the pandemic.
It is encouraging to note that such expenses are
now covered by the DTDi scheme.
BUDGET 2021 HIGHLIGHTS | 7