25 May 2016

On 16 May 2016, the Inland Revenue Authority of Singapore (IRAS) issued a new e-Tax Guide, “GST: Fringe Benefits”.

The Guide explains the GST treatment for goods and services provided by a GST-registered person to employees as fringe benefits. Specifically, it highlights the circumstances to claim the GST incurred on fringe benefits and whether GST is to be accounted for when these benefits are given free to employees.

Fringe benefits refer to non-wage benefits provided by employers to their employees. These benefits are given to employees as part of their overall remuneration packages and can take the form of either goods or services.

Generally, the input incurred on fringe benefits is claimable provided that they are not disallowed under regulations 26 and 27 of the GST (General) Regulations.

Prior to 16 May 2016, businesses may have claimed input tax on the provision of fringe benefits to their employees based on previous versions of the e-Tax Guide, “GST: Fringe Benefits”, where no input tax needs to be repaid.

With effect from 16 May 2016, the revised GST treatment will be applicable where businesses are still required to account for output tax if the fringe benefits are goods that have either been:

• Given as gifts to employees under the Gift Rule; or
• Used temporarily by your employees for their private purposes.

No output tax is required to be accounted for on free services provided to employees, free food or beverage catered for employees or the provision of free accommodation in a hotel, inn, boarding house or similar establishment.

This e-Tax Guide replaces the IRAS’s e-Tax Guide on “GST: Fringe Benefits” published on 4 May 2015.

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.