18 May 2012
A development and expansion (DEI) company is a company that enjoys the development and expansion incentive (DEI) awarded by the Economic Development Board (EDB).
To enable the income and direct expenses of the two trades or businesses to be recorded accurately for tax purposes, a DEI company that carries on a separate (non-DEI) trade or business is required to maintain separate accounts for the non-DEI trade or business.
Expenses which are common to both trades or businesses must be apportioned on some fair and reasonable basis. Hence, the company has to ensure that there are adequate underlying controls in its accounting and reporting system for the purpose of recording and reporting its income and expenses correctly under the appropriate tax rates.
IRAS has issued a sample tax computation format for such DEI companies on its website.