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TAX DEDUCTIONS (For Companies)

Allowed Expenses o Retrenchment payments to employees (incl. payment in-lieu of notice/leave, outplacement support) o Gratuity payments to retrenched employees for past services o Employees’ income tax liability o Apartment rental paid for expatriates & family o Relocation expenses & home leave passage paid for expatriates & family o Overseas pensions or provident funds, provided as part of employment contract or by rule of provident funds

Disallowed Expenses o Provision for unutlised leave o Excess employer statutory CPF contributions, & voluntary CPF for foreigners (employment pass) o Reimbursements to staff for own private cars usage for business o Premium on staff medical insurance policy is part of total medical expenses that cap to 1 or 2% of total remuneration. If exceeds, not deductible

Bad Debt
Allowed Expenses o Write back of specific provision for doubtful trade debts o Trade debtors liquidated

Disallowed Expenses o Bad debts write-off trade debt taken over from another company o Bad debts write-off for loans to ex-director or ex-employees o Bad debts write-off simply because too small o Increase in general provision for bad debts

Foreign exchange (ref to Lecture note)
Allowed Expenses o Exchange loss on settlement of balance on inventory purchase o Exchange loss on translation of trade debts

Disallowed Expenses o Legal fee to appeal against tax assessments o Legal fee to draft new agreements (e.g. tenancy, lease) o Legal fee for new trademarks, or rebranding co. image by creating new logo. o Legal fee to recover debts owing by ex-director or ex-employees o Legal fee for feasibility studies or formation expenses for i.e. local or overseas establishments o Legal fee for land title or deeds, etc o Licence fees for new factory…...

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