For a Singapore company eyeing overseas markets, one of the most useful and most under-claimed tax reliefs is the Double Tax Deduction for Internationalisation, or DTDi. It lets a business deduct 200% of qualifying expenses incurred in expanding overseas, instead of the usual 100%. In effect, every dollar of eligible spend shelters two dollars of taxable income.
The scheme has been extended to 31 December 2030, and the automatic deduction cap is set to rise sharply, so it is worth understanding well. This guide explains what DTDi is, which expenses qualify, the automatic cap and how it is changing, how to claim, and how the relief sits alongside grants such as the Market Readiness Assistance grant.
What the DTDi scheme is
The DTDi is a tax incentive that gives a 200% tax deduction on qualifying market expansion and investment development expenses. It is provided for principally under section 14B of the Income Tax Act 1947, jointly supported by Enterprise Singapore and, for tourism-related activities, the Singapore Tourism Board, and administered by IRAS for tax purposes.
Because the deduction is against taxable income rather than a cash grant, its value depends on the company being profitable. At the headline corporate tax rate of 17%, an extra 100% deduction on eligible spend translates into real tax savings for a company that is paying tax. For a fuller picture of the rate and exemptions, see our guide to Singapore corporate tax.
The automatic deduction and the cap
The most convenient feature of DTDi is the automatic deduction. Companies can claim the 200% deduction on qualifying expenses up to an annual cap without seeking prior approval from Enterprise Singapore or the Singapore Tourism Board. They simply make the claim in their tax return.
The automatic cap has been $150,000 per Year of Assessment for expenses incurred from YA 2019 to YA 2026. Following Budget 2026, the automatic cap is set to increase to $400,000 per Year of Assessment with effect from YA 2027, and the range of activities eligible for automatic claims is being broadened. Expenditure above the cap can still qualify for the 200% deduction, but it requires approval from Enterprise Singapore or the Singapore Tourism Board before the spend is incurred.
Qualifying activities and expenses
DTDi covers a broad set of internationalisation activities. These generally fall into a few categories.
Market preparation and exploration
Overseas market development trips and missions, overseas investment study trips, and feasibility studies to assess a new market. Expenses such as airfare, accommodation within limits, and related travel costs for approved trips are typical qualifying items.
Market promotion
Participation in overseas trade fairs, approved local trade fairs, and overseas advertising and promotional campaigns. Costs of designing and producing marketing materials for overseas markets can also qualify.
Market presence
Expenses connected with setting up or maintaining an overseas presence, including certain overseas business development activities. The expanded scope from YA 2027 will also cover activities such as master licensing and franchising, reflecting how modern companies scale abroad.
Illustrative example
| Item | Amount |
|---|---|
| Qualifying internationalisation spend | $100,000 |
| Standard deduction (100%) | $100,000 |
| Additional DTDi deduction (further 100%) | $100,000 |
| Total deduction (200%) | $200,000 |
| Indicative tax saving from the extra 100% at 17% | $17,000 |
The figures are illustrative only and assume the company is profitable and within the automatic cap. Actual savings depend on the company’s tax position.
How to claim
1. Confirm the activity and expense are within the qualifying categories. 2. Check whether the total qualifying spend for the year is within the automatic cap; if so, no prior approval is needed. 3. If the spend exceeds the cap, apply to Enterprise Singapore or the Singapore Tourism Board for approval before incurring the expenditure. 4. Keep detailed records, including invoices, travel itineraries and evidence that the activity was for overseas market expansion. 5. Claim the 200% deduction in the company’s corporate tax return for the relevant Year of Assessment.
DTDi compared to grants
DTDi is a tax deduction, not a cash grant. It reduces taxable income and therefore benefits companies that are paying tax. Grants such as the Market Readiness Assistance grant instead co-fund a share of eligible third-party costs in cash, which helps companies that are not yet profitable. Many companies use both: the MRA grant to defray part of the cash cost, and DTDi to deduct the qualifying portion that is not grant-funded. For the broader grant landscape, including the consolidation into the EDGE scheme, see our guide to the EDGE grant.
A company should be careful not to claim DTDi on the portion of an expense that has already been funded by a grant. Coordinating the two reliefs is worth doing carefully.
Common pitfalls
The most common mistakes are claiming for activities that are not genuinely for overseas market expansion, missing the requirement to obtain prior approval for spend above the automatic cap, and poor record-keeping that cannot survive an IRAS review. Companies also sometimes overlook DTDi entirely and default to a plain 100% deduction, leaving relief on the table. Building the check into the year-end tax computation, alongside items such as the Enterprise Innovation Scheme, avoids that. Full details are set out by IRAS and Enterprise Singapore.
Frequently asked questions
Do I need approval to claim DTDi?
Not for qualifying spend within the automatic cap, which is $150,000 per Year of Assessment up to YA 2026 and rising to $400,000 from YA 2027. Spend above the cap needs prior approval from Enterprise Singapore or the Singapore Tourism Board.
What if my company is loss-making?
DTDi increases your deductions, which can enlarge an unutilised loss. Whether that loss can be carried forward depends on the usual loss carry-forward rules, so the cash benefit may be deferred until the company is profitable.
Can I claim DTDi and an internationalisation grant on the same cost?
No. You should not claim the double deduction on the portion of an expense already funded by a grant. Only the unfunded qualifying portion should be claimed.
How long will DTDi be available?
The automatic DTDi applies to qualifying expenditure incurred up to 31 December 2030 under current settings.
– The Editorial Team, Raffles Corporate Services