The total GST collected for the recent fiscal year 2012/2013 was over $9 billion, making it one of the top contributors to Singapore's tax revenue. In addition, over $109 million in taxes and penalties were collected through GST audit initiatives by the Inland Revenue Authority of Singapore (IRAS) during the same year.

 

The increased scrutiny and targeted GST audits by the IRAS, coupled with rapidly changing GST rules and regulations, make GST-registered businesses (GRBs) susceptible to severe penalties for GST non-compliance if they are not on top of these changes.

 

Recent Updates

GRBs need to be aware of the following developments and take necessary steps to remain compliant.

 

  a) New guidelines to determine the appropriate GST treatment(s) on recovery of expenses

 

The recovery of expenses is a:

Up to 30 May 2013

Effective 31 May 2013
Reimbursement
(subject to GST)		 Where the conditions to qualify as a disbursement are not met Where you incur the expenses as a Principal
(e.g. contract with supplier in your own name/ capacity, supplier's invoice addressed to you).
Disbursement
(not subject to GST)

Must meet the following conditions:

  • The other party1 is responsible for paying the supplier;
  • The other party1 knows that the goods or services would be provided by that supplier;
  • The other party1 authorised you to make the payment on his behalf to the supplier;
  • The other party1 is the recipient of the goods or services;
  • The payment is separately itemised when you invoice the other party1;
  • You recover from the other party1 only the exact amount paid to the supplier; and
  • The goods or services paid for are clearly additional to the supplies you make to the other party1
 Where you pay the expenses as an Agent
(e.g. arranged for goods/ services on behalf of another party1, you are not a party to the contract with supplier, supplier's invoice addressed to another party1).

 

1Person whom you are re-billing to recover the expense paid on behalf.

 

 

  b) New concession for claiming GST incurred on food and beverage (F&B)

 

GST incurred on:

Document required to
support GST claim (up to 31 Jan 2014)

Documents required to support
GST claim (effective 1 Feb 2014)
Entertainment expenses (e.g. F&B) exceeding S$1,000 (including GST) Valid tax invoice2 Simplified tax invoice3
(e.g. receipts issued by restaurants, food outlets)

 

2Reflecting the words "tax invoice", invoice no, date of issue, supplier's details (full name, address and GST registration no), customer's details (full name and address), description to identify goods and/or services supplied and type of supply, quantity of goods or extent of services and amount payable excluding GST for each item, cash discount (if any), total amount payable excluding GST and applicable GST rate, total GST payable, total amount payable including GST, Singapore dollars equivalent (for total amount payable excluding GST, total GST payable and total amount payable including GST) if the tax invoice is issued in foreign currency.

 

3Reflecting the invoice/receipt no, date of issue, supplier's details (full name, address and GST registration no), description to identify goods and/or services supplied and type of supply, total amount payable including GST. To be supplemented by alternative documentary payment evidence and information on entertainment details (e.g. name of person entertained, purpose of entertainment, person incurring the expenses)

 

 

  c) Updates to correction of mistakes in import declaration.
  d) Zero-rating (i.e. GST at 0%) treatment relating to sale of bunker fuel.
  e) Enhanced GST Assisted Self-Help Kit (ASK) user interface (e.g. working templates and declaration forms) and new e-Service to retrieve past GST Returns to facilitate ease of ASK Annual Review.

 

What Should GRBs Do?

GRBs that have not established a good GST compliance framework may wish to consider a voluntary self-review of their GST returns. This allows them to take advantage of the Voluntary Disclosure Programme (VDP) to avoid penalties and start with a clean slate. GRBs should relook their compliance framework to keep a keen eye on future regulatory changes in order to maintain ongoing compliance.

 

How can we assist?

Using the ASK and GST Assisted Compliance Assurance Programme (ACAP), we assess GRBs’ GST compliance frameworks and shed light on gaps that may lead to penalties. We help businesses take advantage of the VDP, allowing them to correct GST errors with lower or no penalties. Our team of GST specialists also offer advisory and compliance support to minimise GST risks.

 

 

Contact our team of GST professionals:

 

Richard Ong, Director & Head
Accredited Tax Advisor (GST)
T +65 6594 7821
richardong@rsmchiolim.com.sg		   Huang Yanlin, Manager
Accredited Tax Advisor (GST)
T +65 6594 7306
huangyanlin@rsmchiolim.com.sg
     
Lee Meow Ling, Manager
T +65 6594 7305
leemeowling@rsmchiolim.com.sg		   Victor Poon, Assistant Manager
Accredited Tax Practitioner (GST)
T +65 6594 7304
victorpoon@rsmchiolim.com.sg