5 Tax Deductions Every Singapore Startup Should Know

Starting a business in Singapore is exciting — but it also comes with financial responsibilities. As a founder, keeping your costs under control is just as important as driving revenue. One way to do that is by making full use of tax deductions that the government provides to support startups and SMEs.

In this post, we’ll walk you through five key tax deductions every Singapore startup should know.

1. Start-Up Tax Exemption (SUTE) Scheme

Newly incorporated companies can benefit from significant tax exemptions on their first three years of assessment (YA).

  • First S$100,000 of normal chargeable income → 75% exemption

  • Next S$100,000 → 50% exemption
    This is designed to help startups reinvest profits into growth.

2. Business Expenses

Many operating costs are deductible if they are “wholly and exclusively” incurred for business. Examples include:

  • Office rent and utilities

  • Staff salaries and CPF contributions

  • Marketing and advertising costs

  • Professional fees (accounting, legal, IT services)

💡 Tip: Always keep proper receipts and records to substantiate claims.

3. Research & Development (R&D) Deductions

If your startup is developing new products, software, or processes, you may qualify for enhanced R&D tax deductions. Eligible R&D activities allow you to claim up to 250% tax deductions on qualifying expenses.

4. Capital Allowances for Equipment

Instead of claiming depreciation, startups can claim capital allowances on qualifying fixed assets like computers, machinery, and office equipment. This spreads the cost over several years, reducing taxable income.

5. Productivity and Innovation Credit (PIC) / Other Grants

While the PIC scheme has phased out, various other innovation and productivity incentives are available. For example, deductions for training employees, adopting IT solutions, or improving business processes. Always check the latest IRAS updates for available schemes.

Final Thoughts

Understanding these tax deductions can save your startup thousands of dollars each year. But navigating Singapore’s tax system can be tricky — and mistakes may lead to penalties.

👉 That’s where expert guidance comes in. At Kenwyn Accounting, we help startups stay compliant while maximising every cost-saving opportunity.

📌 Book a free consultation today → kenwynaccounting.com/contact

#KenwynAccounting #StartupSupport #SingaporeSMEs #TaxSavings #BusinessGrowth

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