Double Deduction for Overseas Investment Development Expenditure (DD)

Benefits:

• A double deduction (if the expense is not deductible under Section 14 of the Income Tax Act)
• A further deduction (if the expense is deductible under Section 14 of the Income Tax Act) against income of approved expenditure in activities to initiate and develop overseas investments.

Qualifying companies:

• Singapore registered company or firm with operations in Singapore
• The company must be at least 30% owned by Singapore citizens or permanent residents

Qualifying projects and expenses:

• Investment feasibility/due diligence studies and investment study missions/site visits:
• Third party consultancy fees
• Return economy airfare and allowances for up to two full time employees for a maximum of two trips per feasibility study
• Operations and maintenance of overseas project development office:
• Rental and maintenance of office facilities
• Return economy airfares for up to three employees to travel from Singapore to the overseas project development office to take up and return from their appointment
• Remuneration, rental of accommodation and subsistence allowances for up to three employees.

The maximum amount of eligible expenses allowed for deduction under the incentive is $200,000 per approval. Company who is enjoying other tax incentives on the same project will not be eligible for the DD

Important notes:
Overseas Project Development Office.

Only qualifying expenses for the first six months of operation of the overseas project development office will be covered under the incentive.  In addition, the overseas project development office should meet the following criteria:

• It should be engaged exclusively in identifying, initiating and developing investment opportunitiesˇ It should not be in a country where the company has permanent establishment with income subject to tax
• It should be wholly owned by the company in Singapore or jointly owned by a number of Singapore companies
• It should be set up within 12 months from the date of the letter of approval

Overseas project development offices which are set up in traditional investment locations which are already familiar to Singapore investors will not be supported under the incentives.