20150626 gst bulletin 10th issue
DESCRIPTION
pTRANSCRIPT
ABC Pte Ltd can
claim input tax on
commercial property
in full.
Input tax on
commercial property
partially claimable
since supplies made
prior to registration
ABC Pte Ltd can claim
input tax of $500 for
consultancy services in
full as long as the
services are not directly
attributable to supplies
made before Aug 2015.
© 2015 Inland Revenue Authority of Singapore Page 1 of 6
GST BULLETIN Welcome to the 10th Issue of
the GST Bulletin!
This biannual newsletter is
published every June and
December. It features key
changes in GST law and tax
treatment on GST issues
commonly encountered by GST-
registered businesses.
Website: http://www.iras.gov.sg
Issue 10
Jun 2015
CONTENTS
1. GST Updates
Budget 2015 changes (Pre-registration claims and
GST remission for REITs and RBTs)
New Section 33B
New price display requirements
2. Knowledge Sharing
Input tax claiming conditions
Cancelling your GST registration? Submit your
application online!
3. Frequently Asked Questions
Generally, GST incurred before GST registration (“pre-registration GST”) on goods consumed or
supplied; or services used to make supplies before registration is not claimable. Apportionment is
required if the goods or services are used to make supplies before and after GST registration or the
goods are partially consumed before GST registration.
Budget 2015 Changes: Pre-registration Claims
GST Updates 1
For businesses that are registered for GST on or after 1 Jul 2015, the pre-registration GST claim rules
will be simplified such that full claims are allowed on the following goods and services that are
acquired within 6 months before your GST registration date:
1. Goods held by your business at the point of GST registration; and
2. Property rental, utilities and services, which are not directly attributable to any supply made by your
business before GST registration
Example: ABC Pte Ltd is a newly incorporated property investment company.
Input tax for
consultancy
services partially
claimable
Incorporated Incurred $500
consultancy
service fees
Apr 2015 May 2015
Purchased commercial
Property at $1 million
Jun 2015
Started to rent
commercial property
Jul 2015 Aug 2015
GST registered
Before Budget Changes
After Budget Changes
© 2015 Inland Revenue Authority of Singapore Page 5 of 6 © 2015 Inland Revenue Authority of Singapore Page 2 of 6
Budget 2015 Changes:
GST Remission for REITS and RBTs
• GST claims are still subject to apportionment using existing formula
• Funds raised by these SPVs must be on-lent to the REITs or qualifying RBTs and be
used to finance the business activities of the REITs or qualifying RBTs
• The GST must be incurred in the qualifying period of 1 Apr 2015 to 31 Mar 2020
For more information on Remission of GST for REITs and RBTs, please refer to
"GST: Concession for REITs and Qualifying Registered Business Trusts Listed in Singapore”
For more information on Section 33B, please refer to “GST: Claiming of GST on re-import of value-added goods”
GST Updates 1
Claiming GST on the re-importation of
value-added goods
Points to
note
From 1 Jan 2015, if you are a GST-registered business sending goods belonging to your local
customers (whether GST-registered or not) or GST-registered overseas customers’ for value-added
activities outside Singapore, you can claim input tax on the GST incurred on re-importation of the goods
if you meet the qualifying conditions.
As part of the continuing effort to promote the listing of Real Estate Investment Trusts (REITS) and
Registered Business Trusts (RBTs) in the infrastructure business, ship leasing and aircraft leasing sectors,
the GST remission for REITS and RBTs has been extended till 31 Mar 2020.
In addition, the GST remission is enhanced to allow REITS and qualifying RBTs to claim:
• GST on business expenses* incurred to set up Special Purpose Vehicles (SPVs) that are used solely to
raise funds for the REITS and qualifying RBTs; and
• GST on the business expenses* of these SPVs
*Excluding Regulation 26 and 27 disallowed expenses
Your overseas
sub-contractor
A (customer) You
Overseas
Singapore
(3) Sends
goods for
further VA
activities (B)
(4) Re-import goods
after VA activities
completed
(1) Consigns his
semi-finished goods
for value-added
(VA) activities
(5) Delivers value-
added goods
(5) Supply of VA
activities (A+B)
(2) Performs part
of the VA
activities (A)
From 1 Jan 2015 – GST incurred on re-import of
goods is claimable if import permit is in your
name
Before 1 Jan 2015 – GST incurred on re-import of goods not claimable in
full
Price: $1070 (inclusive of GST)
$1000 (exclusive of GST)
For more information on price display requirements, please refer to our webpage on displaying price.
© 2015 Inland Revenue Authority of Singapore Page 3 of 6
GST Updates
New Price Display Requirements
Price: $2000 ($2140 inclusive of GST)
× Not Acceptable
1
Acceptable
It is important for the public to know upfront the final price of goods and services that they have to pay.
Hence, GST registered business must show GST-inclusive prices on all price displays (e.g. price tags,
price lists, advertisements, publicity brochures, website). Prices that are quoted, whether written or
verbal, must also be GST-inclusive.
With effect from 1 Apr 2015, if businesses display both GST-inclusive and GST-exclusive prices, the
GST-inclusive price must be at least as prominent as the GST-exclusive price.
Failure to comply with the price display requirements is an offence that can result in a fine of up to
$5,000 or in default of payment, an imprisonment term of up to 6 months. If you are not displaying GST-
inclusive prices, please rectify your price displays immediately.
Acceptable
$107 $107 w/GST
$107 (inclusive of GST)
$107 w/GST ($100)
$107 w/GST ($100)
$100 ($107 inclusive of GST)
$100 ($107 inclusive of GST)
× Not Acceptable
$100+ $100+GST
$100+7% GST
$107 w/GST($100)
$100 ($107 w/GST)
$100 ($107 inclusive of GST)
$100 (exclusive of GST) $107 (inclusive of GST)
The following table illustrates the acceptable and non-acceptable formats of price display:
1. You are GST-registered;
2. Goods or services must have been supplied to you or the goods have been imported by you;
• For local purchases:
Supported by valid tax invoices addressed to you, or simplified tax invoices
• For imports:
Supported by import permits which show you as the importer of the goods.
3. The goods or services are used or to be used for the purpose of your business;
4. The input tax is directly attributable to taxable supplies (i.e. standard-rated supplies and zero-rated
supplies), or out-of-scope supplies which would be taxable supplies if made in Singapore; and
5. The input tax claims are not disallowed under Regulation 26 and 27 of the GST (General)
Regulations.
For more information on input tax claiming conditions and the disallowed input tax claims, please refer to conditions for claiming
input tax.
© 2015 Inland Revenue Authority of Singapore Page 4 of 6
What are the disallowed input tax claims?
Knowledge Sharing 2
What are the input tax claiming conditions?
Club subscription fees charged by sporting and
recreational clubs
Medical expenses incurred for your staff*
Medical and accident insurance premiums
incurred for your staff*
Benefits provided to the family members or
relatives of your staff
Costs and running expenses incurred on
motor cars
Any transaction(s) involving betting,
sweepstakes, lotteries, fruit machines or games
of chance
Note:
• Input tax is not claimable even if these expenses are incurred for
business purpose and in the making of taxable supplies.
• If you had previously claimed input tax on these disallowed expenses,
you should voluntarily disclose the errors and you may enjoy lower
penalties under Voluntary Disclosure Programme.
* Medical expenses and/or medical and accident insurance premiums incurred for your staff will be claimable if medical expenses and/or insurance or payment of compensation are mandatory under the Work Injury Compensation Act or under any collective agreement under the Industrial Relations Act.
Login to myTax Portal to apply
for Cancellation of
GST Registration*.
After login, click on Goods and Services
Tax > Apply for cancellation of GST
registration on the left menu.
After application, a confirmation page
stating the effective date of cancellation
will be shown if application is
approved.
Otherwise, you will receive an
acknowledgement page on the receipt of the application and will
be informed of the status of application
within 10 working days.
© 2015 Inland Revenue Authority of Singapore Page 5 of 6
Knowledge Sharing
Your company has purchased a tablet (Sales Price: $1200) for business
purposes. It will be used in the course of making taxable supplies. The
GST-registered supplier issues only a debit note, which does not
provide the information that is required in a tax invoice, to you.
Example: Debit Note – To claim or not to claim?
Cancelling your GST registration?
Submit your application online!
Have you stopped making taxable supplies? Or has your
business ceased or fully transferred to another person? If
your answer is “Yes”, then you have to apply for
cancellation of GST registration.
Most online applications for de-registration are now
approved instantaneously and the process is a breeze.
Paper application, on the other hand, generally needs a
longer processing time.
2
How to cancel your GST registration online?
Your company is not entitled to input tax claims as your company does
not have proper supporting documents. One of the conditions for
claiming input tax is that your purchase must be supported by valid tax
invoices addressed to your company. You should request for a valid tax
invoice from your supplier in order to claim input tax.
For more information on what constitutes a valid tax invoice, please refer to our webpage on “Invoicing customers”.
*To cancel your GST online, your authorised Approver (i.e. the staff who is authorised to prepare and/or approve the GST
returns) may do so via the e-Service “Apply for Cancellation of GST Registration” via myTax Portal.
Disclaimer
The contents of this bulletin are provided on an “as is” basis
without warranties of any kind. IRAS shall not be liable for any
damages, expenses, costs or loss of any kind however caused
as a result of, or in connection with your use of this bulletin.
This information aims to provide a better understanding of
taxpayers’ tax obligations and is not intended to
comprehensively address all possible tax issues that may
arise. This information is correct as at 30/06/2015. While every
effort has been made to ensure that this information is
consistent with existing law and practice, should there be any
changes, IRAS reserves the right to vary our position
accordingly. Taxpayers may wish to refer to the IRAS website
at www.iras.gov.sg for the latest updates.
Tax Academy of Singapore organises GST courses for professionals/ businesses who wish to attain basic/ in-depth knowledge of GST. Upcoming GST Courses organised by Tax Academy: • Executive Tax Programme Level I (GST) – Nov 2015 • Executive Tax Programme Level II (GST) – Oct 2015 For more information, please visit www.taxacademy.sg.
© 2015 Inland Revenue Authority of Singapore Page 5 of 6 © 2015 Inland Revenue Authority of Singapore Page 6 of 6
Frequently Asked Questions 3
No. Even if the car is used for business purposes, input tax claim for its running
costs is disallowed under Regulation 27 of our GST General Regulations.
Q2
If you had claimed the GST on the re-import of the value-added goods as your
input tax, but subsequently obtain reimbursement on the import GST, you are
required to repay the import GST to the Comptroller.
You have to account for the GST as output tax in the GST return (i.e. Box 6)
corresponding to the accounting period in which you obtain reimbursement for
the import GST.
Can I claim input tax on running costs of a company-owned car used by
my sales personnel?
What if I have claimed the GST on the re-import of value-added goods
but subsequently obtain reimbursement for the import GST? Q1
No. The GST law does not allow the Comptroller of GST to exempt GST-
registered businesses from the new requirement when they choose to display
both GST-inclusive and GST-exclusive prices.
I want to display both GST-inclusive and GST-exclusive prices, but with
the GST-inclusive price being less prominent. Can I be exempted from
the new price display requirement? Q3
Input tax can be claimed based on the date of suppliers’ tax invoices or import
permits, as long as all the conditions are satisfied. You do not need to wait until
the goods are sold to claim the input tax.
We can only claim the GST incurred on goods purchased or imported
into Singapore when the goods are sold and output GST is accounted
for. Is this correct? Q4