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Car Rental Companies in Singapore

A car rental company refers to a company that rents out private hire cars for a fee. These private hire cars are described as "Private Hire" on the vehicle log card.

Expenses incurred by car rental companies for private rental cars rented to customers are tax-deductible

Under Sections 14 and 15 of the Income Tax Act 1947 (ITA), your car rental company can claim a deduction for expenses incurred on private hire cars rented to customers. Capital allowances may also be claimed on the cost of purchasing such a private hire car.

Income arising from car rental activities will be segregated, i.e. losses and capital allowances arising from such activities cannot be deducted from other income. However, under Section 23(4) and Section 37(12) of the ITA, unutilised losses and unutlilised capital allowances can be carried forward to be deducted from income derived from the same car rental activity business in subsequent Years of Assessment (YAs).

Unutilised losses and unutilised capital allowances remaining after the car rental business has been terminated will be disregarded.

The requirement to segregate income from a car rental business does not apply to unutilised losses and unutilised capital allowances relating to the year of assessment 1999 and before. Therefore, such unutilised losses and unutilised capital allowances can be used to deduct from other income earned by your car rental company.

If your car rental company operates other businesses, you will need to keep separate records and accounts to easily identify and determine income and expenses related to your car rental business, separate from income/expenses from other businesses.

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