The General Rule for Deductibility
An expense is tax-deductible when it is incurred wholly and exclusively in the production of your company's income.
According to the Inland Revenue Authority of Singapore (IRAS), expenses must fulfil these conditions to be tax-deductible:
They must be incurred when you are legally obligated to pay. This holds even if no actual payment is made.
They must be solely incurred when generating income for your company.
They are revenue, and not capital, expenses. This means they are incurred in the course of your company’s daily revenue-generating operations.
They are not private expenses.
They are not subject to deduction, as outlined in the Income Tax Act 1947.
Common Deductible Business Expenses
Here are some of the most common categories of expenses that your business can typically claim:
Employee costs: Salaries, bonuses, and Central Provident Fund (CPF) contributions for your employees
Office rent: The cost of renting your commercial office space
Office supplies and equipment: The cost of day-to-day office supplies, as well as the purchase of machinery and equipment. For larger assets, you may claim capital allowances instead of an outright deduction.
Marketing and advertising: Expenses incurred for promoting your business, such as digital marketing campaigns or advertising placements
Business travel: Costs associated with travel for business purposes, such as flights and accommodation
Training costs: Expenses for training courses that upgrade your employees' skills and expertise
Business-related insurance: Premiums for insurance policies related to your business operations
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Common Non-Deductible Expenses
On the other end of the spectrum, it is equally important to know what you cannot claim. Private and capital-related expenses are generally not allowed. Examples include:
Personal expenses (eg: personal travel, meals with family, and domestic helper salaries)
Private car expenses (petrol, road tax, insurance), regardless of whether the car was used for business
Expenses incurred to issue shares or pay dividends
Capital expenditures, such as the purchase of fixed assets (though you can claim capital allowances on these)
Fines and penalties
Stay Ahead of Your Business Expense Deductibles With Mezzanine Enterprise
By staying abreast of your business expense deductibles, you stand to reduce your company’s overall tax liability. Aside from identifying these expenses, you also need to ensure you are prepared with the necessary documentation.
The IRAS requires you to keep detailed records, including invoices and receipts, for at least five years. Without proper records, your claims may be disallowed during a tax audit.
This is where Mezzanine Enterprise steps in to take over this task on your behalf, ensuring your expenses are carefully tracked to the highest degree in line with the rules of deductibility. By partnering with us, you ensure your company maximises its tax savings while remaining fully compliant with IRAS regulations.
Talk to us to find out more about how we can optimise your tax strategy.
27 Oct 2025
A Simple Guide to Claiming Business Expense Deductions
Alicia Chong
Updated on 10 June 2026.
When planning your company’s taxes, you need to understand which expenses are tax-deductible. By claiming all eligible deductions, you stand to reduce your company’s chargeable income and overall corporate tax liability.
This quick guide walks you through the most common business expense deductions you can claim.
