Tax Deduction For Long Term Care Insurance – Medical expenses incurred by employees are tax deductible as long as they are limited to 1% of the employee’s total compensation for the year. See Example 1 (PDF, 56 KB) on how the medical expense cap applies.
If your company makes ad hoc contributions to its employees’ Medisave accounts through the CPF Board’s Additional Medisave Contribution Scheme (subject to a cap of 2,730).
Tax Deduction For Long Term Care Insurance
Per employee per annum), he also gets an additional tax deduction above the 1% limit of MediSave’s ad-hoc contribution amount up to a higher medical expenditure tax deduction limit of 2%. This also applies if the company does not accept the vested benefit rules. See Example 2 (PDF, 56 KB) for an illustration of the tax deduction allowed in such a scenario.
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Medical expenses are fully deductible if the medical expenses (including rider bonus) do not exceed 1% of the employee’s gross wages for the relevant base period.
If medical expenses (including rider bonus) exceed 1% of employees’ gross wages for the relevant base period, the additional amount not related to rider bonus will be deducted up to a further 1% of gross wages. employees for the respective base period.
Effective January 1, 2018, the cap was increased from $1,500 to $2,730 per employee per year. This is aimed at encouraging companies to contribute more to their employees’ MediSave accounts for their medical needs.
To determine “total employee compensation” for purposes of calculating the medical expense cap, your company does not need to subtract the amount of payments received by the government (eg, sick leave, sick leave, and government-paid child care/maternity/paternity leave. ).
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A company received $100,000 in salary, allowances, bonuses and CPF contributions from employees and $5,000 from the government for state-paid maternity leave for its affected employees.
Medical expenses in excess of the maximum allowable amount (eg 1% or 2% of the employee’s gross compensation) will be treated as income and taxed at the applicable corporate tax rate if the company has tax-exempt or low-rate taxable business income. (eg pioneering companies, corporations with certain incentives).
Motor vehicle costs are tax deductible for goods and commercial vehicles such as vans, trucks and buses. Some examples of motor vehicle expenses are repairs, maintenance, parking fees, and gas costs.
Motor vehicle expenses are not deductible for private vehicles (such as vehicles with S-plates) and company vehicles (such as vehicles with Q and RU plates registered on or after April 1, 1998). This applies to expenses incurred directly or paid as reimbursement, even if the vehicles are used for business purposes.
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Private cars (eg S-plate cars) and company cars (eg Q-plate and RU-plate cars registered on or after April 1, 1998)
Payment for travel from one place to another by a passenger without control or ownership of the vehicle.
Payment of transport services for business purposes is taxable. On the other hand, the rental of a private car and the operating or maintenance expenses of a rented private car are not tax deductible, unless it is a matter of vehicle rental or driving training.
Tax deduction can be claimed under Section 14A of Income Tax on qualifying expenditure incurred on registration of patents, trademarks, designs and plant varieties (collectively “Qualified Intellectual Property Rights” or “IP”) up to and including assessment year (YA) 2025. Act 1947.
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Your company does not need to submit supporting documents with its corporate income tax return to claim the tax deduction. However, receipts must be kept and produced upon request.
Tax deductions apply to costs incurred by a company in registering IP for its trade or business when both the legal and beneficial ownership of the IP is owned by the company.
Beneficial ownership refers to the transfer of economic benefits from the exploitation of intellectual property to a business entity.
Official fees relating to payment to the Patent, Trademark, Design or Design Registry in Singapore or an equivalent registry outside Singapore:
Long Term Care Insurance
Professional fees refer to fees charged in connection with the registration of patents, trademarks, designs and/or plant varieties, including fees paid to a person acting as an agent;
Prior art research and translation costs are also tax deductible when documents or specifications are required to be submitted to foreign IP offices in their native language.
Registration cost from June 1, 2003 to last day of base period for YA 2025
To encourage companies to register and protect their intellectual property rights, the tax deduction for the first $100,000 of qualified IP registration expenses for each YA from 2019 to 2025 has been increased from 100% to 200%.
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For qualifying IP registrations costing more than $100,000 for each YA from 2019 to 2025, your business can apply for a 100% tax deduction.
YAs from 2011 to 2018, expenses incurred for IP registration are eligible for benefits under the Productivity and Innovation Credit (PIC) program.
If a tax deduction is claimed for the costs incurred in registering qualified IP rights, the reclaim adjustments may apply if your company sells, transfers or assigns all or part of those IP rights:
Gains from the sale, transfer or assignment of rights are considered income and taxed in the year of disposal. The amount of tax is capped at the earlier allowed basic deduction of 100%.
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If your company was previously granted PIC benefits or a 100% extended reduction in qualifying registration costs in 2019-2025, those benefits can be reclaimed if the rights are sold within 1 year of filing the application.
Generally, restoration costs (ie costs incurred to restore the premises to their original condition before vacating at the end of the lease) are not tax deductible as they qualify as recognized capital expenditure under section 15(1)(c). ) of income under the Tax Act 1947 is not allowed. This is because such expenses usually relate to vacant business premises that are no longer used to generate income.
According to paragraph 16 of FRS 16, the cost of an item of property, plant and equipment includes a preliminary estimate of the cost of removing and removing the item and restoring the site where the item is located, the liability for which an entity. Expenditure is incurred both when the item is acquired or as a result of the item being used in a specified period for purposes other than the production of supplies during that period.
Watch our e-learning video to learn more about tax deductions for home renovation and renovation (R&R) expenses.
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R&R expenses incurred under Section 14N of the Income Tax Act 1947 can be claimed as a qualifying tax deduction. Such expenses are not eligible for capital deduction as they are not incurred for the provision of “plant or machinery”.
Section 14N deduction is provided to a corporation engaged in a trade, business, or profession. Investment holding companies do not qualify for the Section 14N deduction because they do not carry on trade or business for tax purposes.
The following items are eligible for section 14N deduction, provided they do not damage the structure of the company premises:
Renovation costs that affect the structure of a commercial building and do not qualify for a Section 14N deduction may be eligible for land density allowance if approved by the Singapore Economic Development Board (EDB) or the Building and Construction Authority (BCA).
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R&R expenses that qualify for tax deduction as business expenses are capped at $300,000 for each relevant 3-year period beginning with the year in which the R&R expenses are incurred.
Section 14N deduction The entity should claim for 3 consecutive YAs in the year in which the R&R expenses were incurred (ie 1/3rd of the R&R expenses to be claimed in each 3 YAs). .
R&R expenses not claimed in YA in respect of base period are not eligible for tax deduction in subsequent YAs.
Section 14N deduction is allowed only if your company continues to practice the trade, business or profession for which the R&R is incurred. If trade, business or profession ceases permanently during any base period of 3 AH, section 14N deduction also applies from that AH. Remaining balance of section 14N deduction is not allowable as tax deduction in subsequent YA.
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* In 2020, qualified R&R expenses are limited to $120,000 ($300,000 – $150,000 – $30,000).
The company will cease operations permanently during the base period of YA 2021. Therefore, the remaining section 14N expenses to be claimed are $90,000 (from $10,000