How to Claim Software in Singapore (2026 Guide)

Quick answer

Software subscriptions are deducted as revenue expenses in the year incurred. Software you buy outright is capital, but it qualifies as prescribed automation equipment for a 100% one-year capital allowance under section 19A, so it is also fully relieved in the first Year of Assessment. Local purchases of off-the-shelf software over S$10,000 fall under GST customer accounting. Overseas SaaS should arrive without GST once the vendor has your GST number.

Is software tax deductible in Singapore?

Yes, with the route depending on whether you bought access or an asset. A subscription, a term licence, hosting, and support are revenue expenses: incurred wholly and exclusively in producing income, with no enduring asset left when they lapse, so they are deductible under section 14 in the year incurred. Sole proprietors apportion any private use.

Software you own is capital expenditure and is relieved through capital allowances rather than a deduction. In practice the outcome is just as fast. IRAS’s capital allowance rules give a 100% write-off in one year under section 19A for computers, prescribed automation equipment, and low-value assets, and IRAS names computers, laptops, printers, and computer software among the commonly claimed items of prescribed automation equipment. A perpetual licence, a purchased ERP module, or a custom-built system therefore earns a full annual allowance in the Year of Assessment following the basis period in which it was bought. Where the asset is bought under hire purchase, the allowance follows the instalments paid.

The low-value asset route is the other one-year option: any asset costing no more than S$5,000 can be written off in one year, capped at S$30,000 of such claims per Year of Assessment. Software under S$5,000 fits, although the automation equipment route already covers it without using up the S$30,000 cap. A business that prefers to spread the claim can instead elect the three-year write-off, which is sometimes useful when there is no taxable income to absorb the allowance in year one, although unabsorbed allowances can also be carried forward.

How much can you claim?

Subscriptions: the full business share in the year. Purchased software: a 100% capital allowance in the first Year of Assessment. Worked example: a Singapore logistics SME pays S$14,400 a year for routing, accounting, and CRM subscriptions, buys a S$22,000 perpetual licence for a warehouse management system, and commissions S$6,500 of integration work that produces a custom module. The subscriptions are deducted in full. The licence and the module are prescribed automation equipment, so S$28,500 of capital allowances is claimed in full in the following Year of Assessment. Total relief S$42,900, worth S$7,293 at the 17% corporate rate before partial exemption.

GST on software

Singapore-billed software carries 9% GST, claimed as input tax by a registered business making taxable supplies, with a full tax invoice for amounts of S$1,000 or more. Two special rules apply. First, customer accounting: a local supply of prescribed goods, which include off-the-shelf software, exceeding S$10,000 to a GST-registered customer is invoiced without GST and the customer accounts for the output tax and claims the input tax on its own return. Second, overseas vendors: under the overseas vendor registration regime, a GST-registered overseas supplier charges 9% on digital services unless the customer supplies its GST registration number, and the reverse charge applies only to businesses not entitled to full input tax recovery. The Singapore GST guide covers all three.

Record-keeping requirements

Keep licence terms as well as invoices, because the terms show whether you bought access (revenue) or a perpetual right (capital). Keep subscription renewal invoices, and for owned software a fixed asset schedule with the purchase date, cost, and the allowance claimed. Records must be kept for five years from the relevant Year of Assessment. The Singapore record-keeping guide covers IRAS’s electronic record requirements.

How to claim, step by step

1. Classify each software cost: term access is revenue; a perpetual licence or custom build is a capital asset.
2. Deduct subscriptions in the tax computation in the year incurred, apportioned for private use.
3. Add owned software to the fixed asset schedule and claim the 100% section 19A allowance as prescribed automation equipment in the next Year of Assessment.
4. Decide whether the three-year election suits a year with little taxable income.
5. Give GST-registered overseas vendors your GST number; account for customer accounting on local software purchases over S$10,000.
6. Claim input tax with full tax invoices for amounts of S$1,000 or more.

Common mistakes

• Capitalising a monthly subscription and claiming allowances on it instead of deducting it.
• Expensing a S$20,000 perpetual licence as a revenue cost rather than claiming the one-year allowance.
• Using the S$30,000 low-value cap on software that already qualifies as automation equipment.
• Claiming input tax on an invoice marked for customer accounting without also reporting the output tax.
• Paying GST to an overseas SaaS vendor that was never given the GST registration number.

Software that helps

• Dext captures vendor invoices from email and codes recurring software consistently.
• ExpenseFlow reads software invoices with frontier vision AI, tells a subscription from a perpetual licence or build, explains the call under each line, lowers its confidence for review when the invoice does not say which, flags overseas bills that need reverse-charge or import treatment, and syncs the approved result to Xero or QuickBooks with the invoice attached.
• Xero carries a fixed asset register that records section 19A claims by Year of Assessment.

FAQ

See the answered questions above for subscriptions, purchased software, low-value assets, customer accounting, and overseas GST.