DTDi prior approval or automatic claim for YA 2027?

DTDi prior approval is still needed in YA 2027 when qualifying expenditure exceeds the S$400,000 automatic cap, or when the activity is an e-commerce campaign or overseas trade office. The larger cap and expanded automatic activity list do not make every internationalisation cost an automatic double deduction.

Decide the claim route before the company commits to a project that needs approval. A tax return prepared later cannot replace an approval that should have been obtained through Enterprise Singapore or the Singapore Tourism Board.

Start with the YA 2027 automatic list

The current IRAS DTDi guidance lists 14 activities that may qualify for automatic DTDi. From YA 2027, investment feasibility studies, master licensing and franchising, market surveys and overseas business development join the automatic list.

For this reason, the specified automatic expenditure cap rises from S$150,000 for YA 2019 to YA 2026 to S$400,000 per YA from YA 2027. The cap is shared across the company’s automatic DTDi activities for that YA. It is not a separate S$400,000 limit for every market or activity.

Place each cost against the exact activity description. A general overseas expansion label is not enough. Record the market, supplier, work performed, amount, accounting period and supporting document beside the proposed claim route.

Recognise the three prior-approval situations

IRAS identifies three practical reasons to use a prior-approval route. The first is qualifying expenditure above the specified automatic cap. The second is an e-commerce campaign. The third is an overseas trade office, which now includes qualifying employee overseas-posting expenses.

In practice, an automatic activity can therefore still need approval because of amount. For example, a company may incur S$360,000 on qualifying automatic activities and another S$80,000 on the same list. Only the first S$400,000 sits within the automatic cap. The company should assess prior approval for the excess rather than treating the full S$440,000 as automatic.

Activity names also matter. A permanent overseas office is not the same as a market-development trip. An online campaign is not automatically ordinary overseas advertising merely because both use digital media.

Apply before the approval-dependent work starts

The Enterprise Singapore DTDi page sets out the current application route and eligible activity information. Check it before signing the relevant contract or incurring approval-dependent expenditure. Keep the submitted application, approved scope and decision letter with the tax file.

At the same time, Write the planned start date, supplier commitment date and first expense date into the project record. If commercial urgency changes the schedule, the project owner should tell finance before the company commits. Finance can then confirm whether approval remains possible or whether the cost should be excluded from DTDi.

Do not describe an unapproved activity as approved in a purchase order or tax schedule. The commercial project may proceed without DTDi, but the company should understand that funding decision before it acts.

Keep the cap calculation separate from eligibility

A cost does not become qualifying simply because space remains under the S$400,000 cap. Test the activity and qualifying expense first. Then place the eligible automatic amount into the cap schedule.

Reconcile the approved scope to actual spending

As a result, approval is not permission to claim every invoice linked to a project. Compare actual suppliers, dates, markets, activities and cost categories with the approved scope. Explain any underspend, changed supplier or cancelled component.

Where one invoice contains automatic, approval-dependent and ordinary expenses, split it using the contract, deliverables or another reasonable basis. Keep the calculation with the invoice. Do not allocate the full amount to the category that gives the largest deduction.

Foreign currency, GST and reimbursements should be treated consistently with the accounts and tax computation. The DTDi schedule should tie to the general ledger and prevent the same cost from being claimed twice through another support route.

For example, ask the project owner to sign the final activity and market schedule before the tax return is filed. That sign-off confirms the work actually delivered, while finance confirms the amount and tax treatment. It also creates a clear route for resolving a supplier description that is too broad.

Retain evidence for IRAS review

IRAS says companies must keep documentation that proves the expenditure and purpose. A useful file includes the commercial objective, activity classification, market evidence, contract, invoices, payments, deliverables, travel or campaign records, approval documents and the final cap calculation.

The Income Tax Act provisions supporting DTDi remain the legal basis. Where the activity or timing is uncertain, remove the unsupported amount or obtain appropriate tax advice. Do not turn a commercial description into a legal conclusion without checking the statutory conditions.

In addition, the Singapore business support guide remains the pillar cornerstone. The YA 2027 automatic DTDi guide lists the expanded activities, while the DTDi allocation guide explains shared costs. The Enterprise Support and Grants hub connects the wider library.

The final claim record should answer two separate questions: why the expense qualifies, and why it belongs in the automatic or approved route. Keeping those answers separate is the simplest way to use the YA 2027 expansion without overclaiming.