The COVID-19 pandemic has amplified the importance of alternative business models and we have witnessed the explosion of e-commerce sales and the proliferation of businesses vying to establish their presence on e-commerce platforms. It is therefore timely and heartening to see the DTDi scheme expanded to cover qualifying expenditure incurred to launch an e-commerce campaign on an online platform. This should help reduce the costs of businesses going online.
The Inland Revenue Authority of Singapore (IRAS) has indicated in its Budget 2023 - Overview of Tax Changes that e-commerce refers to the business of buying and selling goods and services on the Internet, while in the context of DTDi “campaign” refers to an organised course of action to promote goods and services abroad.
Given the very nature of an online presence, it is difficult to see whether this definition will be interpreted strictly by the IRAS such that the costs of setting up an e-commerce channel or webpage which is accessible to customers both in Singapore and overseas may not qualify for the new deduction claim. Hopefully this would not be the case.
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