As the tax reporting season for companies gets under way, the taxman is encouraging businesses to adopt e-filing, which will become compulsory in a few years' time.

All companies will have to e-file for YA 2020 (Year of Assessment 2020) and physical tax returns will no longer be accepted.

The deadline this year for companies to file their tax returns is Nov 30 or Dec 15 if they e-file.

Every company needs to file a tax return, even if it did not carry on any business activities in the financial year.

The Inland Revenue Authority of Singapore (Iras) also asked businesses to note that routine modifications or changes to existing products and processes do not qualify as research & development (R&D) projects which enjoy tax perks.

For example, for a business that makes and sells bread, changing the shape of a bun by modifying the machine or improving bread texture by changing the composition of its existing ingredients would not qualify for R&D benefits.

Companies can claim tax deductions on qualifying expenses on renovation and refurbishment (R&R) works such as general electrical installations and fixed partitions.

But Iras also reminded companies that total claims should not exceed the $300,000 expenditure cap for the three-year period; and that tax deduction cannot be claimed for non-qualifying items such as designer fees, fine arts and structural works.

Businesses should also maintain proper documentation of their projects to substantiate their claims, Iras added.