Tag Archives: GST

Singapore GST – Guide on Exemption of Investment Precious Metals (IPM)


On 22 May 2018, IRAS issued the second edition of the e-Tax Guide on Exemption of Investment Precious Metals and the amendment to this e-Tax Guide includes the following:

  • Paragraph 4.7 of the e-Tax Guide has been updated to include the qualifying IPM coins
  • Paragraph 10.1 has been amended pertaining to the contact information.

 

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Singapore GST – Former Singapore Customs Officer Jailed for Fraudulently Obtaining GST Tourist Refunds


It was reported in IRAS’ website on 20 April 2018 that Ms. Pang Yeow Biah, who was a former Singapore Customs Officer, was charged for fraudulently obtaining GST tourist refunds under the electronic tourist refund scheme (“eTRS”).

Between 2012 and 2014, Pang was a Singapore Customs officer who was deployed at the GST Refund Inspection Counter at Changi Airport.  Her main duty was to process GST refund claims made by tourists leaving Singapore.  When the opportunity arose during her course of work, she would take the details of these “rejected” GST refund claims and use the eTRS system to electronically process the GST refunds into her own credit cards or credit cards that were under her control.  In addition, Pang had used the eTRS self-help kiosks to obtain the GST refunds which she was not entitled to.

The GST refunds were obtained through Pang’s misuse of two credit cards that were registered in her son’s ex-girlfriend’s name but under Pang’s control.  Pang then used the GST refunds to repay her own credit card debts.

Pang pleaded guilty to 10 charges of fraudulently obtaining GST tourist refunds amounting to $8,302.05 under section 62(1)(e) of the GST Act and three charges under section 47(1)(c) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”).

The court sentenced Pang to 15 months’ imprisonment and a penalty of $24,906.15, which is 3X  the amount of tax defrauded. Pang was sentenced to 4 weeks’ imprisonment for her CDSA offences, resulting in a total sentence of 15 months and 4 weeks’ imprisonment.

Message from Singapore Customs and IRAS

  1.   Measures such as built-in system checks are in place to identify cases to be selected for further inspection. Through data analytics, IRAS and Singapore Customs are able to detect suspicious GST refund claims and fraudulent activities.
  2. Singapore has always adopted a zero-tolerance approach towards tax fraud, money laundering, and other criminal activities. The authorities take a serious view of such criminal practices and will take swift action against any individuals and parties involved.

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Singapore GST – Revised e-Tax Guide on ACAP


The Inland Revenue Authority of Singapore (“IRAS”) revised the e-Tax Guide on the Assisted Compliance Assurance Programme (“ACAP”) on 2 April 2018 by extending the current penalty waiver from 31 March 2019 to a final extension date of 31 March 2024.

In other words, IRAS will be prepared to waiver penalties for genuine non-wilful GST errors in the course of ACAP review when the taxpayer

  •  notify IRAS by 31 Mar 2024 of his intention to embark on your first ACAP;
  • settle the additional taxes; and
  • attain ‘ACAP Premium’ or ‘ACAP Merit’ status.

According to the e-Tax Guide, this is a one-time of the normal 1-year grace period under the IRAS’ Voluntary Disclosure Programme (VDP), as recognition of your efforts to strengthen the effectiveness of the overall GST controls to ensure continual GST compliance. If any of the above conditions is not satisfied, IRAS may impose a reduced penalty under the normal VDP rules, for non-wilful GST errors made.

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Singapore GST – Electronic Application for GST Registration From 1 Oct 2018 onwards


The Inland Revenue Authority of Singapore announced on 14 February 2018 that GST registration will have to be made electronically at myTaxPortal with effect from 1 October 2018.  Paper applications will only be accepted for exceptional cases e.g. businesses not granted access to myTaxPortal.

The benefit of submitting the application for GST registration is the shortened processing time

  • 2 working days for compulsory GST registration
  • 10 working days for voluntary GST registration upon receipt of your completed GIRO form*.

Where it is inevitable that paper application for GST registration is to be submitted, the processing time will be as follows:

  • 10 working days for compulsory GST registration
  • 1 month for voluntary GST registration upon receipt of your completed GIRO form.

* The GIRO application form submitted will be sent to the applicant’s bank for approval. The approval process may take between 2 to 4 weeks.  The IRAS will inform the applicant separately via letter if the bank rejects his application. Most banks will usually notify the applicants directly for GIRO applications accepted by them. IRAS will not send any letter for approved applications.

 

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Singapore GST – Changes Announced in Budget 2018


The  Finance Minister, Mr. Heng Swee Keat announced two important changes to the Singapore Goods & Services Tax (“GST”) on 19 February 2018.

Proposed change in GST rate from 7% to 9%

As widely speculated by the industry key players and the tax practitioners, the Government plans to raise GST from 7% to 9% sometimes in the period from 2021 to 2025.  However, the Minister said that the exact timing of this GST rate hike will depend on (i) the state of the economy; (ii) how much the Government expenditure grows; and (iii) how much buoyant the existing Singapore taxes are.

The Minister did expect that this change should occur earlier rather than later in the above period, citing the reason that even after exploring various options to manage the Government expenditure through prudent spending, saving and borrowing for infrastructure, there is still a gap.  Moreover, raising GST by 2% will provide the Government with a revenue that is equivalent to almost 0.7% of GDP per year.

Similar to the last rate hike announced in Budget 2007, the Government will implement the GST increase in a progressive manner such as

  • continue to absorb GST on publicly-subsidized education and healthcare
  • enhance the permanent GST Voucher (GSTV) scheme when the GST is increased, so as to provide more help to lower-income households and seniors.
  • implement an offset package for a period to help Singaporeans adjust to the GST increase. Lower- and middle-income households will receive more support.

Comments from WHM Consulting Pte Ltd: we anticipate the proposed GST hike in 2013 as it is a matter of time for the Government to do so because it is one of the easiest and most efficient ways to increase the Government’s tax revenue collection.  It would suggest that as a GST-registered business, you are under a heavier obligation to ensure the proper compliance with the GST provision as the quantum of any penalty imposed for failure of complying with the GST provisions will be increasing. 

Introduction to the reverse charge provision from 1 Jan 2020

Singapore has made the decision to suspend the reverse charge provision as stipulated under Section 14 of the GST Act since 1 April 1994.  What this means is that GST is currently not applicable on imported services provided by an overseas supplier that does not have an establishment in Singapore.

To ensure that the Singapore tax system remains fair and resilient in a digital economy, the Government has embarked on the feasibility study of activating the reverse charge provision 2 years ago and finally in this Budget, it is announced that the reverse charge provision will be effective from 1 January 2020.

For B2B transactions, only businesses that (i) make exempt supplies, or (ii) do not make any taxable supplies need to apply reverse charge. The majority of businesses make taxable supplies and thus would not be affected by this reverse charge mechanism.

The reverse charge mechanism requires the local business customer to account for GST to IRAS on the services it imports. The local business customer can, in turn, claim the GST accounted for as its input tax, subject to the GST input tax recovery rules.

The taxation of B2C imported services will take effect through an Overseas Vendor Registration (OVR) mode. This requires overseas suppliers and electronic marketplace operators which make significant supplies of digital services to local consumers to register with IRAS for GST.

IRAS will release further details by the end of February 2018.

Comments from WHM Consulting Pte Ltd: we were not surprised with the introduction of the reverse charge mechanism as we understand that the Government has embarked on the feasibility study a few years back.  Even Malaysia has introduced reverse charge mechanism in its GST provision when it was first launched in 2014.  GST-registered businesses should get proper education to understand how the reverse charge provisions work and make sure that they have systems in place to keep track of such B2B transactions.

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