9 March 2015
On 3 March 2015, the Inland Revenue Authority of Singapore (IRAS) published an e-Tax Guide, “GST: Transfer of business as a going concern and other excluded transactions”.
This e-Tax Guide explains and provides examples of transactions that are regarded as neither a supply of goods nor services and hence are not subject to GST.
All taxable supplies made by a GST-registered person are subject to GST. However, certain transactions are specifically disregarded as supplies under the Goods and Services Tax (Excluded Transactions) Order and are not subject to GST.
These transactions (“excluded transactions”) are:
- The transfer of assets made under an agreement for the transfer of business as a going concern (referred to in the Guide as TOGC);
- The transfer or assignment of title to goods comprised in a hire-purchase agreement; or
- The transfer of any qualifying deductions under section 37C of the Income Tax Act.
In the case of a TOGC, this Guide primarily sets out:
- The conditions for the supply of assets transferred to be treated as an excluded transaction
- The GST treatment for the recovery of input tax in relation to a TOGC
- The GST treatment for the repayment of input tax deemed deducted when the transferee (new owner) changes or intends to change the usage of the transferred assets; and
- The GST obligations of the transferor (previous owner) and the transferee.
A taxable person who transfers or disposes the assets of his business, whether or not for a consideration, will have to account for GST on such transfer or disposal unless he satisfies all the TOGC conditions.
This e-Tax guide is a consolidation of two previous e-Tax Guides:
- GST: “Transfer of business as a going concern” published on 15 March 2010.
- “Goods and Services Tax Treatment of Transfer for a Consideration of “Qualifying Deductions” allowed under the Income Tax Group Relief System” published on 16 July 2003.
For full details, please refer the e-Tax Guide on the IRAS website.
Source: This article was extracted from the Inland Revenue Authority of Singapore’s (IRAS) website. Visit http://www.iras.gov.sg/ for more information.