Raffles Consulting Services
DTDi expense allocation should connect each qualifying cost to the right activity, market, year and approval route before the tax claim is made.
DTDi expense allocation should be completed before the corporate tax return is prepared. Each cost needs a clear link to the qualifying internationalisation activity, the overseas market, the relevant Year of Assessment and either the automatic claim or a prior-approval route. A single event invoice or regional contract may need to be split rather than claimed as one amount.
The purpose of the record is not to force every overseas cost into the scheme. It is to show which amount qualifies, why it qualifies and which amount remains an ordinary business expense.
Begin with the activity and claim route
The current IRAS DTDi guidance lists 14 activities that can qualify for automatic DTDi. The list includes overseas market development trips, overseas trade fairs, overseas advertising, market studies and overseas business development. From YA 2027, four more activities enter the automatic list and the automatic expenditure cap rises to S$400,000 per YA.
For this reason, Other qualifying activities, spending above the automatic cap and some activity-specific claims still need prior approval from Enterprise Singapore or the Singapore Tourism Board. The Enterprise Singapore DTDi page should be checked for the activity, cost types and application timing before the expense is committed.
Place a claim-route field beside every cost line. Use labels such as automatic, prior approval obtained, approval required or ordinary deduction only. This prevents the finance team from assuming that the higher YA 2027 cap removes every approval requirement.
Allocate shared costs on a supportable basis
A regional project often covers several countries. A consultant may research three markets under one contract. A trade fair may serve visitors from several countries. A digital campaign may use one platform account for multiple territories. Keep the supplier invoice intact, then add an allocation schedule that explains how the Singapore claimant divided the cost.
In practice, use a basis that follows the work. Direct hours can suit a consultancy project. Booth area or separately priced packages may suit a trade event. Campaign spend by country can suit advertising. Travel days can help when one trip covers several markets. Revenue is not automatically a reliable allocator, especially for a new market with no sales.
Do not choose the basis only because it gives the largest claim. Record why the basis reflects the service received, who approved it and which supporting file proves the calculation. Use the same approach for similar costs unless the facts change.
Separate qualifying and non-qualifying elements
One invoice can contain several elements. A trade fair package may include booth rental, general membership, entertainment, freight and optional advertising. A consultant may provide both an overseas feasibility study and domestic sales advice. The qualifying description and the supplier’s total are not enough.
At the same time, ask for an itemised quotation or invoice. If the supplier cannot split it, prepare a contemporaneous calculation from the contract, time records or deliverables. Exclude amounts that cannot be tied to a qualifying expense. Preserve GST and foreign-currency treatment separately so the tax computation does not mix gross and net figures.
| Cost | Useful allocation evidence | Question before claiming |
|---|---|---|
| Multi-market consultancy | Scope, deliverables and hours by market | Does each work package match a qualifying activity? |
| Regional trade fair | Event contract, booth package and participant record | Which costs relate directly to the approved or automatic activity? |
| Overseas campaign | Platform report and spend by country | Is the campaign within the relevant DTDi route and period? |
| Business trip | Itinerary, meetings, fares and hotel records | Who travelled, for which activity and to which market? |
Match the cost to the correct Year of Assessment
The automatic cap applies by YA, not by project. The accounting treatment and the date when the expense is incurred affect the claim period. Do not move an amount between years merely because one year’s cap has been used. Reconcile the allocation schedule to the general ledger and tax computation.
For a company with a 31 December year end, spending incurred in financial year 2026 generally enters YA 2027. A company with a different year end should map its basis period carefully. Where a contract spans two accounting periods, confirm when each service was performed and recognised.
As a result, Maintain a running cap schedule for all automatic DTDi activities. Show the ordinary deduction, the additional deduction and any amount that needs prior approval because the automatic cap is exceeded. The schedule should also stop the same cost from being claimed under DTDi and another support route without a proper adjustment.
Keep market-level evidence even when the cap is shared
The S$400,000 YA 2027 automatic cap applies across qualifying automatic activities. It is not a separate cap for each market. Market-level evidence is still important because the commercial purpose and qualifying activity must be proved.
A workable file contains the project approval, target-market note, supplier documents, proof of payment, itinerary or campaign report, deliverables, foreign-currency calculation, ledger entry and allocation schedule. Add the Enterprise Singapore approval where one is required. IRAS states that companies must keep documents proving the expenditure and purpose and produce them when requested.
Review the schedule before the return is filed
For example, Have the project owner confirm what work occurred. Finance should reconcile the invoices and ledger. The tax reviewer should confirm the qualifying activity, cap and approval route. Resolve differences before Form C-S, Form C-S Lite or Form C is submitted.
The Singapore business support decision guide remains the pillar cornerstone. The YA 2027 automatic DTDi guide explains the new cap and activity list, while the MRA overseas-cost guide covers a separate grant evidence issue. The Enterprise Support and Grants hub connects the full library.
A clean allocation schedule makes the tax claim smaller when part of an invoice does not qualify. That is a strength, because the remaining claim can be traced from the return back to the work actually performed.