How to Claim a Business Vehicle Purchase in Singapore (2026 Guide)

Quick answer

Singapore blocks cars out of the tax system. Capital allowances cannot be claimed on private cars (S-plated) or business cars (Q-plated and RU-plated), unless the car is registered as a private hire car or a car for instructional purposes and used in that business ^[3] . Running costs on those cars are not deductible either ^[1] , and Regulation 27 blocks the GST ^[4] . Commercial vehicles claim capital allowances, deduct running costs and claim GST in the ordinary way ^{[3] [4]} .

Is a vehicle tax deductible in Singapore?

The Income Tax Act’s prohibition covers both halves of owning a car. On the capital side, IRAS lists the S-plated private passenger car among the assets that do not qualify as plant or machinery, and states that capital allowances cannot be claimed on private cars and on Q-plated and RU-plated business cars, with the private hire and driving instruction exceptions ^[3] . On the revenue side, motor vehicle expenses on private cars and on business cars registered on or after 1 April 1998 are not deductible, directly or by reimbursement, even when the car is used for business ^[1] . Certificates of entitlement are non-deductible as such; for a commercial vehicle the COE is added to the cost of the vehicle and claimed through capital allowances ^[2] .

Commercial vehicles are the other Singapore. IRAS’s list of qualifying plant includes motor vehicles such as pick-ups, vans, trucks, lorries and buses, and motorcycles and bicycles ^[3] . Their running costs (repairs, maintenance, parking, petrol) are deductible ^[1] , and transport by goods and commercial vehicles sits on the deductible list ^[2] .

How capital allowances work on a commercial vehicle

IRAS offers several methods ^[3] :

• A 100% write-off in 1 year under Section 19A for computers, prescribed automation equipment, and low-value assets. A low-value asset costs not more than $5,000, and the total 1-year claim for low-value assets is capped at $30,000 per year of assessment.
• A write-off over 2 years, available only for assets acquired in the basis periods for the years of assessment 2021, 2022 and 2024.
• A write-off over 3 years.
• A write-off over the asset’s prescribed working life.

You indicate the assets and the method in a capital allowance schedule and submit the claim with the corporate income tax return ^[3] . An asset bought on hire purchase qualifies on the instalments paid in each year ^[3] . The capital allowance glossary entry explains the mechanics, and the Singapore tax deadlines calendar has the filing dates.

How much can you claim?

Worked example. A logistics firm buys a $78,000 lorry and a $155,000 S-plate sedan for its managing director in the same year. The lorry’s cost, COE included, goes into the capital allowance schedule over 3 years, its running costs are deducted, and the GST on the purchase and the running costs is claimed ^{[2] [3] [4]} . The sedan claims nothing: no allowances, no running costs, no GST, and every sedan expense is added back in the tax computation ^{[1] [3] [4]} . Over five years the after-tax gap between the two purchases is large, which is the policy intent.

Fuel for the deductible fleet is in the fuel guide, and the people-movement alternatives are in the vehicle expenses guide and the travel guide.

GST on vehicles

Input tax on the purchase and running expenses of motor cars used by you or your employees is disallowed under Regulation 27, and “use” includes a chauffeur driving directors around and a car used to carry clients for a fee ^[4] . A motor car is a vehicle constructed or adapted for not more than seven passengers excluding the driver, with an unladen weight of not more than 3,000 kg; lorries, vans and motorcycles fall outside it, and their input tax is claimable when the conditions are met ^[4] . Renting a car for staff is inside the block; renting a van is not.

Two newer rules help in narrow cases ^[4] : from 1 April 2022, input tax on pay-per-trip chauffeured private hire car services is claimable with a tax invoice or simplified tax invoice; and from 1 January 2023, expenses on a motor car used by a third party (customer parking at your premises, for instance) are claimable. The Singapore GST guide covers the conditions in full.

Record-keeping requirements

Keep for five years: the purchase agreement and invoice, the registration documents that establish the plate type and date, the COE, running-cost invoices tagged to each vehicle, hire purchase schedules, and the capital allowance schedule submitted with each return ^[3] . The add-back of car costs in the tax computation should be reconstructable from the ledger in minutes, which is what per-vehicle tagging buys. The Singapore record-keeping guide sets out the retention rules.

How to claim, step by step

1. Classify every vehicle by plate and function: blocked car, or claimable commercial vehicle or motorcycle.
2. For a commercial vehicle, put the cost including COE into the capital allowance schedule and pick the method: 3 years, working life, or 1 year where it qualifies.
3. Post car costs to their own account so the add-back and the GST block are mechanical.
4. Deduct commercial vehicle running costs and claim their input tax from tax invoices.
5. Claim input tax on commercial vehicle purchases; claim none on cars.
6. Meet people-transport needs through fares, chauffeured services or taxable allowances.
7. Keep the records for five years.

Common mistakes

• Claiming capital allowances on a Q-plate car because it is “a business car” ^[3] .
• Deducting reimbursed car expenses for a director or employee ^[1] .
• Claiming input tax on a car rental for staff ^[4] .
• Leaving the COE out of a commercial vehicle’s capital allowance cost ^[2] .
• Mixing car and van costs in one motor vehicle account, so the add-back has to be rebuilt by hand.
• Assuming the private hire exception covers a normal company car with a chauffeur ^{[3] [4]} .

Software that helps

• Dext keeps per-vehicle cost coding so blocked and claimable spend never blend.
• ExpenseFlow reads vehicle invoices and running costs, flags spend that identifies a private passenger car (where Singapore blocks both the deduction and the input tax), and routes every document through review before syncing it to Xero or QuickBooks.
• Xero carries the fixed-asset register and capital allowance schedules for the commercial fleet.

FAQ

See the answered questions above for the car prohibition, commercial vehicles, write-off periods, GST and the alternatives.