20150626 gst bulletin 10th issue

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 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 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.


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)


× Not Acceptable

$100+ $100+GST

$100+7% GST

$107 w/GST($100)

$100 ($107 w/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.


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.


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 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

20150626 gst bulletin 10th issue

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