January 2026 fourth edition
The fifteen-page guide explains the YA2004 enterprise-development concession and its YA2012 enhancement under section 14R. It concerns revenue expenses of section 10(1)(a) businesses, including partnerships. The stray donations heading in extraction is not the subject of this guide.
Deemed date and eligible expense character
Deemed commencement is the first day of the accounting year containing the first business receipt. Revenue expenses are those otherwise deductible under Part 5 and not barred by section 15 if business had already commenced. Capital costs creating the permanent business structure remain excluded; depreciation, capital assets, penalties and private-car costs do not become deductible merely because they are in startup accounts.
The current-year and preceding-year routes
The 2003 concession permits eligible expenses in the first-receipt accounting year, even before receipt. From YA2012 the enhancement deems eligible preceding-year expenses incurred on the deemed date, deducted in the first-receipt YA rather than the previous YA. The benefit also applies to relevant recommencement. Where the preceding accounting period exceeds twelve months, only the immediately preceding twelve months qualify.
Earlier actual commencement and exclusions
A taxpayer can establish actual commencement earlier than the deemed date, permitting ordinary income-producing expenses from actual commencement subject to section 15. Section 10D investment businesses do not obtain section 14R relief for this income; their non-income-producing investment expenses retain the section 10D restriction.
Trade losses and documentation
Excess eligible expenses become trade losses, potentially usable against same-year income, future income, group relief, spouse transfer or carryback, each subject to statutory conditions; corporate carryforward requires the shareholding test. Include preceding-period amounts/descriptions in the first-receipt YA computation, retain evidence and provide on request. Sole proprietors/partnerships include them in four-line allowable expenses or subtract them in two-line adjusted profit. Two-line S$200,000 revenue reporting begins YA2021 for sole proprietors and YA2022 for partnerships.
Annex A examples 1 and 2
The sole proprietor registered 1 December 2009, first received revenue 1 April 2010 and deems commencement 1 January 2010: eligible 2010 costs are YA2011 deductions. The partnership registered 1 July 2018, first received 1 February 2020 and deems 1 January 2020: 2019 revenue expenses are carried into YA2021 under 14R, and January 2020 costs also qualify under the original concession.
Example 3: distinguish sales from earlier interest
A company incorporated 6 May 2018 first earns business receipts 1 June 2020. Interest S$2,074 in 2019 does not make 2019 the first business-receipt year. The 2020 accounts have sales S$25,762, interest S$3,384 and loss S$6,234. Ordinary analysis denies pre-June costs; the 2003 concession covers all eligible 2020 costs; 14R additionally covers eligible 2019 costs, but not 2018.
Example 3: the adjustments and outcome
Start from loss S$6,234, remove S$3,384 interest, and add back depreciation S$856, expensed fixed assets S$281, fines S$120 and private-car expenses S$3,079. Without concession add S$12,935 pre-June revenue expenses: adjusted profit S$7,653 and chargeable income S$11,037 before partial exemption. With 2003 concession adjusted loss is S$5,282; with 14R deduct additional S$15,647 to reach S$20,929 loss. After interest offsets the latter two carryforward amounts are S$1,898 and S$17,545. The remaining loss may be carried back to YA2020 interest S$2,074 if section 37D conditions are met.
Example 3: reconstruct qualifying revenue expenses
The 2020 qualifying categories are promotion 2,514, audit 1,200, printing 234, rent 6,000, repairs 1,560, secretarial 300, salaries 12,588, phone 1,950, travel/transport 2,844 and utilities 1,854: total 31,044. Assuming even expenditure, five-twelfths gives 12,935. The corresponding 2019 categories are 145, 600, 154, 4,800, 277, 200, 7,542, 623, 421 and 885: total 15,647. Actual tracing takes priority over the illustrative even-spread assumption.
Annex B: first accounts longer than a year
Incorporation on 15 September 2018 with first accounts to 31 December 2019 creates YA2019 for September–December 2018 and YA2020 for calendar 2019. First receipt 1 February 2020 makes YA2021 the claim year. Only 2019 eligible revenue expenses enter the preceding-year 14R claim; identify them separately, or use acceptable time apportionment if identification is not possible.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
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