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Deductions And Reliefs

Your chargeable income (the portion that is subject to taxes) is your total income minus away any deductions and reliefs. To lower your taxes, you should make use of all available deductions and reliefs.

Deductible Expenses

  • You can deduct expenses that are wholly and exclusively incurred in the production of the company's income.
  • Items such as rent, wages paid to employees, accounting fees, director’s fees and director’s salary are all considered "deductible expenses".

Capital Allowances

  • You may claim capital allowances when you purchase fixed assets for your company, e.g. machinery and furniture and fittings.

Unutilised Losses, Capital Allowances And Donations

  • Losses, capital allowance and donations can be used to offset against adjusted profit. Any part of the losses or capital allowance not fully used to offset income in the financial year is termed as "unutilised" or "unabsorbed".
  • You can also carry forward unutilised losses, capital allowances and donations to offset income made in the next financial year.
  • With effect from Year of Assessment 2006, you can also carry back unutilised losses, capital allowances and donation up to $100,000 in the current year to offset the income made in the preceding year.

Group Relief

  • A company may transfer its loss items to another company belonging to the same group.
  • The loss items that can be transferred are:

    • • current year unabsorbed capital allowances

      • current year unabsorbed trade losses, and

      • current year unabsorbed donations

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