Tag Archives: Singapore GST

Singapore GST – ASK Annual Review Guide (5th Edition) Updated

IRAS has updated its GST ASK Annual Review e-Tax Guide (5th Edition) on 5 September 2017.   One of the major amendment to the 5th Edition is summarised below:

 Introduction of the administrative concession for common errors disclosed through the ASK Annual Review

IRAS has introduced a list of administrative concession for common errors discovered in the course of ASK Annual Review, which can be found here.  Taxpayers may consider taking advantage of these administrative concessions if their errors fall within the scenarios described and if the prescribed conditions (if any) are satisfied without the need of seeking any advance approval from the Comptroller of GST.

Take note that unless otherwise stated, the administrative concessions will only apply to past errors and businesses are required to take remedial actions to prevent recurrence of the errors.

Taxpayers who adopt any of the administrative concessions are required to complete the “ASK: Declaration Form on ASK Administrative Concessions” and submit it to IRAS and retain the declaration for at least 5 years.

If IRAS discovers that a business has either wrongly applied, abused any concession, made a false or incorrect declaration or failed to take remedial actions, enforcement actions (such as the recovery of tax and the imposition of penalties) may be taken against the business.

The scenarios cited in the administrative concessions list are not exhaustive. For scenarios not covered in the guide or other publications issued by IRAS (e.g. other GST guides or Practice Notes), taxpayers are advised to write to IRAS, providing full details of the errors. It is not necessary to write in for situations already covered in IRAS’ publications.

If you have any questions, contact support@whm-consulting.com.


Singapore GST – GST Guide on Insurance: Cash Payments and Input Tax on Motor Car Expenses

On 3 April 2017, the IRAS reissued the Second Edition of its e-Tax Guide on GST Guide on Insurance: Cash Payments and Input Tax on Motor Car Expenses.

One of the changes relates to the clarification of the GST treatment for input tax on medical expenses incurred by insurance companies.

If the claimant incurs the expenses (e.g. medical expenses incurred during a hospital stay) and the hospital forwards the claim directly to the insurance company, the question is whether this would be treated as a supply made by the hospital to the insurance company.

A distinction should be made between motor car policies and medical/health policies.  Unlike motor car insurance policy where the insurance company may have to contract for services from an authorised motor workshop to reinstate the motor car to its original condition as required under the insurance contract, the insurance company does not have any obligation to contract for or provide any medical services to the insured under medical/health policies. Hence, any payment made by the insurance company to the hospital should be regarded as a payment arrangement and not as consideration for a supply of services to the insurance company. The insurance company should not claim input tax based on tax invoices received from the hospital. Instead, the insurance company should claim deemed input tax on the Cash Payment provided certain qualifying conditions as stipulated on the e-Tax Guide are satisfied.

If you have any questions, please contact support@whm-consulting.com.

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Singapore GST – Update on GST Input Tax Claims By Qualifying Funds, S-REITs and S-RBTs

For Singapore GST purposes, only GST-registered businesses are allowed to claim GST as an input tax credit.  However, non-GST registered businesses in specific industries are given administrative concessions to claim GST as an input tax credit subject to the satisfaction of certain prescribed conditions.

Until 31 March 2019, qualifying funds managed by a prescribed fund manager in Singapore are allowed to claim GST incurred on prescribed expenses at an annual fixed recovery rate via remission.

Until 31 Mar 2020,  Real Estate Investment Trusts and qualifying Registered Business Trusts listed on the Singapore Exchange (i.e. S-REITs and qualifying S-RBTs) are allowed to claim GST on expenses incurred for their business and their Special Purpose Vehicles (SPVs), regardless of whether the S-REIT or S-RBT is eligible for GST registration.

In order to claim the GST incurred, qualifying funds, S-REITs and S-RBTs are required to submit a quarterly Statement of Claims to IRAS within a month after the end of the respective quarters.   However, as an administrative concession, funds and trusts can submit their  Statement of Claims on a half-yearly or yearly basis as long as the claims are made within 5 years from the end of the respective quarters.

This means that for the period of claims from Q2 2012 (from 1 APril 2013 to 30 June 2013),  the qualifying funds, S-REITs and S-RBTs can opt to submit the Statement of Claims latest by 30 Jun 2018.

If you have any questions, contact us at support@whm-consulting.com.

Singapore GST – IRAS Investigating 43 Individuals on Suspected GST Carousel Fraud

It was reported on IRAS’ website on 18 August 2016 that a 2-day island-wide operation was conducted by IRAS on 15 and 16 August 2016.  Computers, mobile phones, SIM cards and business records at multiple locations including Tannery Lane, High Street and Kallang Pudding, were seized during the operation.  43 individuals are now assisting IRAS in the investigations for their suspected involvement in a GST Carousel Fraud.

What is GST Carousel Fraud?

Generally, in a carousel fraud, the same goods are traded around contrived supply chains within and in some instances beyond Singapore. These supply chains are typically controlled by one mastermind.

GST Carousel Fraud
Courtesy from IRAS website

To illustrate, Company A imports goods and then sells the goods to Company B and charges it GST for the supply of the goods.

The Director of Company A (aka the fraudster) would go missing without accounting for the GST that he should have transferred to the tax authority. The goods are further sold to bogus businesses acting as “buffer” companies in the supply chains.

The goods could be recycled through a series of companies, each liable to GST, and finally exported. The exporter would then claim input GST paid on the exported goods, which is effectively seeking a refund of the GST amount that the tax authority never received.

In some instances, no goods were actually exported and the business transactions were merely a paper exercise, with the sole aim of claiming fraudulent GST refunds. There are also some cases where some of these supposedly exported goods are then sold in the domestic market without GST which gives the fraudsters an unfair advantage compared to other legitimate businesses which charge GST on the sale of their goods.

What does this mean to you?

IRAS takes a serious view on such GST Carousel Fraud. IRAS will not hesitate to take stern enforcement actions against these traders and any intermediaries helping them. Anyone who commits the offence of wilful intent to evade or assist any other person to evade GST faces a penalty of up to 3 times the amount of tax undercharged and a fine not exceeding $10,000, and/or imprisonment of up to 7 years.

If you have any questions, please contact us at support@whm-consulting.com.

Singapore GST – Price Display Requirement Clarified

If you are registered GST and you have been quoting your price like this:  $1,000 + GST, then you must read the following ASAP because you have already breached the price display requirement under our GST Act …

If you are registered for GST, you should be aware that under GST Act, you are required to show GST-inclusive prices on all price displays (e.g. price tags, price lists, advertisements, publicity brochures and website). Prices that are quoted, whether written or verbal, must also be GST-inclusive.

At the same time, starting from 1 Apr 2015, GST-registered businesses must display or quote both the GST-inclusive and GST-exclusive prices to show the GST-inclusive price at least as prominently as the GST-exclusive price.

Source: IRAS Website 

You should also know that quoting the following clauses but not the GST-inclusive prices is not acceptable :

  1. “Prices stated are subject to GST”;
  2. “Prices stated are exclusive of GST”; and
  3. “Prices stated are before GST”.

Failure to comply with any of the price display requirements is an offence that can result in a fine of up to $5,000.

If you have any questions, please contact us at support@whm-consulting.com.