Tag Archives: Singapore

Singapore GST – Public Consultation on the Draft GST e-Tax Guide on Customer Accounting for Prescribed Goods


On 24 April 2017, IRAS has initiated a public consultation exercise to seek feedback from its Draft e-Tax Guide on GST-registered businesses dealing in prescribed goods on the implementation of customer accounting, so as to facilitate a smooth transition into customer accounting come 1 Jan 2018.

What is GST customer accounting?

IRAS is planning to implement GST customer accounting from 1 January 2018 to better address non-compliance relating to transactions of the prescribed goods – mobile phones, memory cards, and off-the-shelf software if the GST-exclusive value of the sale exceeds $5,000 in a single invoice.

If a GST-registered trader makes a taxable supply to a GST-registered customer, it is the GST-registered customer who will account for the output tax on the supply on behalf of the supplier.  At the same time, the GST-registered customer will be bale to claim input tax on this purchase if it is for his business use and the making of his taxable supply.

 

De Minimis Threshold – $5,000

The new Customer accounting requirement is applicable only if the sales of the prescribed goods to a GST-registered customer for his business use exceeds the de minimis threshold of $5,000 in GST-exclusive value..  This means that if the sales do not exceed this threshold, the new Customer accounting requirement will not apply.

The GST-registered supplier should instead standard-rate the supply, account for the GST output tax and issue a tax invoice to his customer as before.

Discounts given on your sales

If a GST-registered supplier offers an unconditional discount on the price of the prescribed goods sold to his GST-registered customer, he should use the discounted GST-exclusive sale value to determine whether his supply exceeds the de minimis threshold of $5,000.

Where there is a contingent discount or delayed reduction in price, the pre-discount GST-exclusive value of the prescribed goods shown on the tax invoice should be used to determine whether the supply exceeds the de minimis threshold of $5,000. 8.2.3 Your supply of prescribed goods to the GST-registered customer will be subject to customer accounting if the discounted sale value or the pre-discount value shown on the tax invoice exceeds $5,000.

A single purchase order with multiple deliveries

For a single purchase order with multiple deliveries, if the GST-registered supplier issues only one tax invoice for all the deliveries, he will use the total GST-exclusive value of the prescribed goods shown in the tax invoice to determine whether the supply exceeds the de minimis threshold of $5,000.

On the other hand, if his normal commercial practice is to issue one tax invoice for each delivery made, such that multiple tax invoices are issued in respect of a single large purchase order, he should determine if customer accounting applies based on the GST-exclusive value on each of the invoices.  However, if he would like to apply customer accounting to all the invoices even though some/all will not exceed $5,000 individually, he can do so provided the GST-exclusive value of the prescribed goods in the single purchase order exceeds $5,000; and both his GST-registered customer and he agree for customer accounting to apply in this manner.

Combined sales of prescribed and non-prescribed goods

When a GST-registered supplier makes a sale consisting of both prescribed and non-prescribed goods to a GST-registered customer, he needs to determine whether the total GST-exclusive sale value of all the prescribed goods sold (whether or not they are of the same type/nature) exceeds $5,000.  The sale value of non-prescribed goods should not be included in this computation.  Upon exceeding the threshold, the GST-registered supplier should apply customer accounting to the sale of the prescribed goods only and not to the non-prescribed goods.

Returned goods

If as a result of the returned goods, the GST-exclusive sale value of the prescribed goods is reduced to $5,000 or below, the GST-registered supplier should issue a credit note to cancel the original sale made under customer accounting and re-issue a tax invoice showing the revised sale value with GST charged (i.e., without applying customer accounting).  He should also collect from his customer the GST chargeable on the revised sale value.

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

Income Tax – Robotic Ice-Cream Machine Dealer Convicted of False PIC Claim


It was reported in IRAS’ website on 27 April 2017 that
Robofusion Asia Pte Ltd (“Robofusion”) has been convicted of giving false information in the Productivity and Innovation Credit (“PIC“) cash payout application form.  Its director, Yong Tai Kok (“Yong“) has also been convicted of his role in assisting Robofusion in making the false PIC Claim.

IRAS’ investigation

IRAS’ Investigations revealed that Yong obtained the consent of two other people who were not employees of Robofusion, to use their names in Robofusion’s PIC cash payout application form dated 23 May 2013.  Robofusion made CPF contributions to their Central Provident Fund accounts in order to represent them as Robofusion’s local employees when in fact they were not.

Robofusion’s PIC cash payout application was for the purchase of “Robofusion Generation 4 Ice Cream Kiosk” costing $93,000 on 28 Feb 2013 and “Software License and Implementation for Cashless Payment System and Kiosk Payment Integration” costing $14,980 on 29 Apr 2013. The amount of PIC cash payout which was wrongfully obtained was $60,000.

Eventually … 

The court ordered Robofusion to pay a penalty of $60,000 for the PIC cash payout that it was not entitled to.

Yong was convicted of intentionally aiding Robofusion to, without reasonable excuse, give false information to the Comptroller of Income Tax to obtain a PIC cash payout which the company was not entitled to.  The court ordered Yong to pay a penalty of $120,000, which is twice the amount of PIC cash payout that was wrongfully claimed and a fine of $4,000.

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

Singapore GST – GST Tax Changes on Budget 2017


It was announced in the Budget 2017 that with effect from 1 July 2017, the GST Tourist Refund Scheme (TRS) will be withdrawn for tourists who are departing by the international cruise from the cruise terminals.

Tourists who are departing by the international cruise from the cruise terminals and have made purchases before 1 July 2017 have until 31 August 2017 claim the refunds on such purchases.

The eTRS facilities at the cruise terminals will be removed after 31 Aug 2017.

What does this mean to the retailers?

Retailers who continue to issue the tickets on or after 1 July 2017 will be committing an offense under the GST (General) Regulations and can be penalized.

IRAS has updated the following e-Tax Guides on 22 Feb 2017 accordingly.

–   GST: Electronic Tourist Refund Scheme (eTRS)
–  GST: Guide for Visitors on Tourist Refund Scheme
  GST: Guide for Retailers participating in Tourist Refund Scheme

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

Income Tax – Corporate Tax Changes from Budget 2017 (Non-Financial Services)


In Budget 2017 announced on 20 February 2017 by the Finance Minister Mr. Heng Swee Keat, the following corporate tax changes (non-financial services related) were announced:

(A)   Enhancing and Extending the Corporate Income Tax (“CIT”) Rebate

Policy Objective
To help companies cope with the economic uncertainty and continue restructuring,

Tax Changes

  • The CIT Rebate cap will be raised from $20,000 to $25,000 for YA 2017 (with the rebate rate unchanged at 50% of corporate tax payable)
  • The CIT Rebate will be extended for another year to YA 2018, at a reduced rate of 20% of tax payable and capped at $10,000.

(B)  Introducing the IP Development Incentive (IDI)

Policy Objective
To encourage the use of IPs arising from taxpayer’s R&D activities, IP income will be incentivised under a new IP Regime named the IP Development Incentive (IDI), which incorporates the BEPS-compliant modified nexus approach.

Tax Changes

  • Effective from 1 July 2017,  IP income will be removed from the scope of Pioneer-Services/Headquarters Incentive and the Development and Expansion Incentive-Services/Headquarters.
  • Existing incentive recipients will continue to have such IP income covered under their existing incentives awards till 30 Jun 2021.
  • The IDI will take effect on or after 1 Jul 2017, and will be administered by EDB.

EDB will release further details of the change by May 2017.
(C)   Withdrawing the Accelerated Depreciation Allowance for Energy Efficient Equipment and Technology (“ADA-EEET”) scheme

To streamline incentives promoting energy efficiency that have been introduced over the years, the ADA-EEET scheme introduced in 1996 will be withdrawn after 31 Dec 2017.  No ADA-EEET will be granted for equipment installed on or after 1 Jan 2018.
(D)  Allowing the Approved Building Project (“ABP”) scheme to lapse

The ABP scheme will be allowed to lapse after 31 Mar 2017.

(E)   Introducing a safe harbor rule for payments under Cost Sharing Agreements (“CSAs”) for R&D projects effective from 21 Feb 2017

Policy Objective
To ease compliance

Tax Changes
Taxpayers may opt to claim tax deduction under Section 14D for 75% of the payments made under a CSA incurred for qualifying R&D projects instead of subjecting the CSA payments to specific restriction rules which disallow certain categories of expenditure.

IRAS will release further details of the change by May 2017.

(F)  Extending the Withholding Tax (“WHT”) exemption on payments for international telecommunications submarine cable capacity under an Indefeasible Rights of Use (“IRUs”) agreement

In line with the Government’s thrust to grow the digital economy and continue to be a key hub for data flow, the WHT exemption on payments for international telecommunications submarine cable capacity under an IRU agreement will be extended till 31 Dec 2023.

(G)  Enhancing the Global Trader Programme (“GTP”) Effective from 21 Feb 2017

Policy Objective
To facilitate and encourage more trading activities in Singapore and to simplify the GTP

Tax Changes

  • The requirement for qualifying transactions to be carried out with qualifying counterparties will be removed. Consequently, concessionary tax rate will be granted to approved global trading companies on income derived from qualifying transactions with any counterparty
  • Concessionary tax rate will be granted to approved global trading companies on physical trading income derived from transactions in which the commodity is purchased for the purposes of consumption in Singapore or for the supply of fuel to aircraft or vessels within Singapore
  • Concessionary tax rate will be granted to approved global trading companies on physical trading income attributable to storage in Singapore or any activity carried out in Singapore which adds value to commodity by any physical alteration, addition or improvement (including refining, blending, processing or bulk-breaking)
  • The substantive requirement to qualify for the GTP will be increased.

IE Singapore will release further details of the change by May 2017.

(H)  Extending and refining the Aircraft Leasing Scheme (“ALS”)

Policy Objective
To continue encouraging the growth of the aircraft leasing sector in Singapore, the ALS will be extended and refined

Tax Changes

  • The ALS will be extended till 31 Dec 2022
  • The scope of qualifying ancillary activities for approved aircraft lessors will be updated to cover incidental income derived from the provision of finance in the acquisition of aircraft or aircraft engines by any lessee with effective from 21 Feb 2017.
  • The concessionary tax rate on income derived from the lease of aircraft or aircraft engines and qualifying ancillary activities will be streamlined from 5% and 10% to a single rate of 8%, applicable to new or renewal incentive awards approved on or after 1 April 2017
  • Automatic withholding tax exemption regime will be extended to qualifying payments made on qualifying loans entered into on or before 31 Dec 2022.

EDB will release further details of the change by May 2017.

(I) Extending and refining the Integrated Investment Allowance (“IIA”) scheme

The IIA scheme will be extended till 31 Dec 2022.

In addition, one of the requirements is liberalized in that the qualifying productive equipment may be used by the overseas company primarily (instead of solely) to manufacture products for the qualifying company under an approved project.

The above liberalization in the qualifying requirement will apply to expenditure incurred on a qualifying productive equipment for a project approved on or after 21 Feb 2017.

(J)   Allowing the International Arbitration Tax Incentive (“IArb”) to lapse

As part of the Government’s regular review of tax incentives, the IArb will be allowed to lapse after 30 Jun 2017.

(K)   Allowing the accelerated Writing-Down Allowances (“WDA”) for acquisition of Intellectual Property Rights (“IPRs”) for Media and Digital Entertainment (“MDE”) content scheme to lapse

As the scheme is assessed to be no longer relevant and to simplify our tax regime, the accelerated WDA for the MDE content scheme will be allowed to lapse, in respect of IPRs acquired for MDE content after the last day of the basis period for YA 2018.

MDE companies or partnerships may elect to claim WDA over a writing-down period of 5, 10 or 15 years on the capital expenditure incurred to acquire the qualifying IPRs under Section 19B or the ITA.

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

Income Tax – Personal Income Tax Changes from Budget 2017


It was announced in Budget 2017 on 20 February 2017 that resident individual taxpayers will be granted a one-off personal income tax rebate of 20% (subject to a cap of $500) in respect of YA 2017 (i.e. for income earned in 2016).

Policy Objective:
To provide relief to individuals who pay income tax.

How is the Rebate Calculated?

The amount of income tax rebate is calculated based on the following:

  1. the amount of tax payable after double taxation relief (DTR) and other credits; and
  2. the amount of tax payable before offsetting the Parenthood Tax Rebate.

Taxpayers need not apply for this rebate.  IRAS will compute and grant the rebate automatically to all tax residents.

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