Double Tax Deduction for Internationalisation (DTDi)

Companies planning to expand overseas can benefit from the Double Tax Deduction Scheme for Internationalisation (DTDi), with a 200% tax deduction on eligible expenses for international market expansion and investment development activities.

As announced at Budget 2018, the expenditure cap for Automatic DTDi will be raised from S$100,000 to S$150,000, effective from the Year of Assessment 2019.

DTDi supports activities across key stages of a company's overseas growth journey, including:

DTDi Flowchart

Please refer here for a full list of qualifying activities and expenditure available for DTDi.

The examples below illustrate potential tax savings through DTDi when an eligible expense is not an Allowable Business Expense¹ under the Income Tax.

Case 1: Company A spent S$10,000 to participate in an overseas tradeshow to reach out to its buyers in Europe

	Without DTDi support	With DTDi support
Revenue	S$100,000	S$100,000
DTDi eligible expense of S$10,000	(S$10,000)	(S$20,000)
Other expenses	(S$20,000)	(S$20,000)
Revenue	(S$20,000)	(S$20,000)
Taxable income	S$70,000	S$60,000
Tax payable (@ 17% as of YA2015)	S$11,900	S$10,200
Savings from DTDi	N.A.	$1,700

Case 2: Company B posts a staff into an overseas subsidiary to drive its marketing efforts in-market. Staff basic salary is $2,000 per month.

	Without DTDi support	With DTDi support
Revenue	S$100,000	S$100,000
DTDi eligible expense of S$2,000 x 12 months	N.A. (If the expense is not deductible under S14 of the Income Tax Act)	(S$48,000)
Other expenses	(S$20,000)	(S$20,000)
Taxable income	S$80,000	S$32,000
Tax payable (@ 17% as of YA2015)	S$13,600	S$5,440
Savings from DTDi	N.A.	$8,160

Note: From year of assessment 2019: Automatic DTDi expenditure cap will be raised from $100,000 to $150,000.

¹ Allowable expenses generally relate to expenses incurred and related to the specified business. For more details please refer to IRAS website.

You can automatically claim 200% tax deduction on the first S$150,000 of eligible expenses for four activities per year of assessment. No prior approval from Enterprise Singapore is required for the following activities:

Overseas business development trips and missions
Overseas investment study trips and missions
Overseas trade fairs
Local trade fairs approved by Enterprise Singapore or Singapore Tourism Board (STB)

Eligible expenses on qualifying activities outside the four areas, and expenses exceeding S$150,000 will require Enterprise Singapore's approval.

Note: This does not apply to the extended scope of eligible expenses announced during Budget 2020. Companies will need to apply to Enterprise Singapore for the enhancements announced during Budget 2020.

For more information on Automatic DTDi, please click here.

Companies should meet the following criteria:

Reside in Singapore with a primary purpose of promoting the trade of goods or provision of services.
Businesses enjoying discretionary incentives² may also be allowed to qualify for the DTDi scheme on a case-by-case basis, subject to approval by Enterprise Singapore or Singapore Tourism Board. Incentivised businesses must have their global headquarters in Singapore, with the primary purpose of trading in goods or providing services, and have an intention to internationalise.

Projects should meet the following key objectives:

Promote the company's new products and services to new target market(s).
Identify new customers in target market(s) for the company’s existing products and services.
Promote the company’s new products and services to existing customers.
Promote the company’s existing products and services to existing markets so as to increase market share

Applications must be submitted on the DTDi portal prior to starting the project.

² Discretionary incentives refer to those under, (a) ITA - Sections 13A, 13F, 13S, 13V, 43C, 43E, 43G, 43J, 43P, 43Q, 43W, 43ZA, 43ZB, 43ZC, 43ZF, 43ZG, 43ZI or (b) Economic Expansion Incentives (Relief from Income Tax) Act - Part II, III, IIIB or X.

If you are a new DTDi user, register here.

Step 1	Submit your application online with your CorpPass for activities: that do not fall under automatic DTDi with quantum exceeding the first S$150,000 for that year of assessment under automatic DTDi Applications must be submitted before project commencement.
Step 2	We will process your application upon receipt of complete information. We may request for supporting documents to verify eligible expenses.
Step 3	For approved applications, submit your evaluation forms upon project completion. We will thereafter proceed to issue a Letter of Support to support your claims with Inland Revenue Authority of Singapore (IRAS).
Step 4	Attach the Letter of Support from Enterprise Singapore to IRAS when filing the company's annual income tax return. All other relevant supporting documents (like invoices, receipts, etc), should be compliant and made available to IRAS upon request.
Step 5	IRAS will assess if expenses submitted qualify for tax deductions.

Click here for a detailed step-by-step guide.

After completing the project, you should submit the Evaluation Form for Enterprise Singapore to issue the Letter of Support for your claims with IRAS.

Companies are not required to submit upfront documentation to IRAS for expenditure not exceeding S$150,000. You will, however, need to produce documentation as proof of expenditure and purpose, should IRAS request. These include purpose and itinerary of the trip, list of companies met, invoices and receipts of the qualifying expenses.

Click here for frequently asked questions on DTDi.

Click here for frequently asked questions on Employee Overseas Posting.

For assistance, kindly contact us at +65 6898 1800 or email us here.