Singapore Fact-File Part 2:
Individual Business Domestic Taxation

2.4 Singapore Personal Allowances and Business Deductions

Businesses in Singapore are permitted to deduct a wide range of business-related expenses, including, but not limited to rent, royalty payments, pension fund contributions, repair expenses, research and development, capital allowances, and certain recruitment expenses.

Capital assets can be depreciated either via an initial allowance and subsequent annual allowances, or via accelerated annual allowances. If the former option is chosen, then the rates are as follows:

• Industrial buildings: 25% initial allowance, followed by 3% annually, on a straight line basis;
• Plant and machinery: 20% initial allowance, followed by an annual allowance of 8%, 10% or 13.3%, depending on the machinery or equipment in question.

Accelerated annual allowances are available on qualifying plant and machinery at 33.33%, with a 100% rate available on certain types of technology, including computers and generators.

Personal deductions, available to the unincorporated small business, include certain expenses incurred in the generation of rental income, and certain charitable donations. There are a number of additional reliefs available for resident individuals; the Inland Revenue Authority of Singapore provides further details here: http://www.iras.gov.sg/irasHome/page_ektid110.aspx .

Certain types of employment-related expenses are also deductible, but these are unlikely to be of interest to the self-employed independent businessperson.

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