9 March 2015

The Inland Revenue Authority of Singapore (IRAS) has updated its website with new content on the tax treatment of car tution companies.

A car tuition company refers to a company which holds a driving school licence and with it, provides car driving instructions for a fee.

In its website, IRAS has stated that “income generated from the business of providing driving instruction for cars is to be quarantined such that losses and capital allowances arising from such activities cannot be deducted against other income. Unutilised losses and unutilised capital allowances can be carried forward to be deducted against income derived from the same business in subsequent years of assessment, subject to sections 23(4) and 37(12) of the Income Tax Act. Unutilised losses and unutilised capital allowances remaining on the cessation of the car tuition business will be disregarded.”

This will not apply to unutilised losses and unutilised capital allowances relating to YA 1999 and before.

Costs or expenses incurred on cars used principally for instructional purposes are fully deductible.

The update was made on 26 February 2015.

For further details, please refer to the IRAS website.

Source: IRAS