IRAS has just announced changes to tax deductions for delivery workers on their website.
Starting from YA 2024 (i.e., for income earned in 2023 and onwards), qualifying delivery workers have the option to claim tax deductions on business expenses by determining a fixed proportion of their annual gross income derived from delivery services.
This is applicable for both food and goods delivery.
Qualifying self-employed persons (SEPs) can now simplify their tax filing process.
Instead of claiming tax deductions based on actual business expenses, they can use the Fixed Expense Deduction Ratio (FEDR).
FEDR, introduced in YA 2019 for PHC/taxi drivers, and extended to self-employed commission agents with an annual gross commission income of $50,000 or less in YA 2020, allows SEPs to claim a deemed amount of business expenses based on a prescribed percentage of their gross income.
Delivery workers must qualify as self-employed individuals and earn S$50,000 or less from the delivery services. They must also exclusively use prescribed delivery modes, with the claimable Fixed Expense Deduction Ratio (FEDR) depending on the mode used.
Workers delivering on foot, via public transportation, or using non-power-assisted bicycles can claim a 20 per cent Fixed Expense Deduction Ratio (FEDR) on their annual gross income from delivery services.
Those utilizing motorized personal mobility devices, power-assisted bicycles, or motorcycles can claim 35 per cent, and those using vans can claim 60 per cent.
Delivery workers using other delivery modes, such as cars, lorries, or trucks, must claim tax deductions based on the actual allowable business expenses they incur while earning income.
The inclusion of delivery workers in the scheme is further progress. It comes shortly after the announcement that private-hire, taxi and delivery workers can get vouchers in the unfortunate event of an accident.