Can I Claim Motor Vehicle Expenses as a Business Expense in Singapore?
Running costs (fuel, maintenance, road tax, insurance) for S-plate business vehicles are deductible. Capital allowances are not available for Singapore-registered private cars. The COE (Certificate of Entitlement) cost is capital and not deductible.
What Inland Revenue Authority of Singapore (IRAS) says
Under section 15(1)(b) of the Singapore Income Tax Act, capital allowances are specifically disallowed on S-plate private cars (as opposed to commercial vehicles). However, the actual revenue operating costs of cars used for business purposes remain deductible as operating expenses if incurred wholly and exclusively in the production of income.
When you can claim
- Fuel costs for business journeys made in a company-owned or leased car, supported by mileage records and business purpose logs.
- Car servicing, maintenance, and repair costs for a company car used for business travel.
- Road tax and comprehensive insurance premiums for a company car.
- Leasing or rental costs for a car hired for business use (operating lease payments are deductible as they are revenue in nature).
- Capital allowances on commercial vehicles, motorcycles, and vans used exclusively for business (these do not face the S-plate car restriction).
When you cannot claim
- Capital allowances on S-plate private cars (explicitly disallowed under the ITA regardless of business use).
- COE (Certificate of Entitlement) cost when purchasing a car: this is a capital cost that cannot be depreciated or claimed.
- Personal use portion of running costs where the car is also used for private journeys.
- Fines, parking penalties, and traffic violations (not incurred for business income production).
Good to know
Pro tip: Given the disallowance of capital allowances on S-plate cars, many Singapore companies prefer to lease rather than buy vehicles. An operating lease payment is fully deductible as a revenue expense each year. This avoids tying up capital in a depreciating asset with no tax shield on the capital cost. Commercial vehicles (vans, lorries, motorcycles) do qualify for capital allowances and are more tax-efficient to own.
Stop guessing what you can claim in Singapore
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