Understanding The Double Tax Deduction Scheme For Internationalization

The Double Tax Deduction Scheme for Internationalisation is a tax incentive scheme in Singapore which allows companies to reduce their corporate tax liability by up to 100% of their local expenditure on qualifying research and development activities, qualifying investment expenses and qualifying start-up expenses. This article discusses the DTDi as well as some of the potential pitfalls.

What is the DTDi?

The Double Tax Deduction Scheme for Internationalisation (DTDi) is a tax relief scheme available to companies that are engaged in international business activities. It allows these companies to reduce their taxable income by offsetting the amount of foreign taxes they have paid against their Australian taxable income.

The DTDi was introduced in 1986 as part of the Overseas Investment Promotion Act 1986, and has since been amended several times. Currently, it applies to businesses that have a permanent establishment (PE) in Australia and earn at least A$75,000 from active business activities here each year. In addition, any goods or services produced using Australian resources must also be supplied locally to qualify for the DTDi.

There are a few important things to note about the DTDi:

– The DTDi only applies to company income – individual tax liabilities still need to be paid; and

– The DTDi cannot be used to reduce tax payable on capital gains or dividends.

If you’re interested in applying for the DTDi, your best bet is to speak with your accountant or tax specialist. There is no application process – simply provide your company’s annual financial reports and details of your Australian PE activity(s).

The Impact of the DTDi

The Double Tax Deduction Scheme for Internationalization (DTDi) is an important tax incentive to encourage internationalization of businesses. In general, the DTDi encourages foreign investment in Canadian companies by allowing these companies to reduce their taxable income in Canada by the amount of any foreign taxes they paid on that income.

There are a few key things to know about the DTDi:

-The DTDi only applies to company income – not individual income or estate taxes. So, if you are a company owner and your spouse also owns shares in the company, each of you will still need to report all your income and pay tax on it.

-The DTDi only applies to income from active business operations in Canada – so it won’t help you reduce your tax bill if your business is just holding money or assets here without doing any business.

-You can’t use the DTDi to avoid paying Canadian tax altogether – it just reduces the amount of taxable income you have to pay here.

What are the Concerns with the DTDi?

There are a few key concerns with the DTDi. One is that it can be difficult to determine which international activities qualify for the deduction. For example, does preparing and filing taxes in another country count as an international activity? Additionally, the DTDi can be used to reduce taxable income even if one does not engage in any international activities. Finally, there are potential limitations on the use of the DTDi, such as the requirement that foreign taxes be paid in order to claim the deduction. You can avail an annual compliance package to save yourself from such concerns.

How will this Affect Internationalization in Singapore?

The double tax deduction scheme for internationalization has been in place since 2001 and allows multinational companies to claim a tax deduction on their Singaporean taxable income, regardless of whether they have a permanent establishment (PE) in Singapore. This provision is beneficial to businesses who wish to invest in or expand their operations in Singapore, as it provides an incentive to stay here and take advantage of the country’s many benefits.

In order to qualify for the double tax deduction scheme, businesses must meet certain requirements. They must be registered with the Inland Revenue Authority of Singapore (IRAS), have an annual worldwide income from business activities that exceeds S$25 million, and maintain at least one PE in Singapore. The scheme is also subject to certain restrictions, including limitations on the amount of deductible income and the types of expenditures that can be counted towards deductions.

The main benefit of the double tax deduction scheme is that it encourages multinational companies to stay active in Singapore and take advantage of its many advantages. It also helps to boost foreign investment in the country, as businesses are more likely to want toinvest here if they know they will receive a tax break for doing so. Overall, the scheme is beneficial both for businesses operating in Singapore and for foreign investors lookingto invest here.


The double tax deduction scheme for internationalization provides a way for companies to reduce their taxable income in foreign countries. By doing so, they can promote economic development in those regions and create jobs there. In order to take advantage of the scheme, your company must have a permanent establishment in a foreign country and meet certain other requirements. This article provides an overview of the scheme and highlights some of the key considerations you should take into account when deciding whether or not to apply for it.