Category: Goods and Services Tax

IRAS issues GST guide on fringe benefits

On By taxsgIn Goods and Services Tax, Latest Tax News

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.

IRAS updates online content for GST on real estate

On By taxsgIn Corporate Tax, Goods and Services Tax, Latest Tax News

25 May 2016

The Inland Revenue Authority of Singapore (IRAS) updated its website content in relation to GST treatment on real estate.

For sale of completed non-residential properties, taxpayers are still required to report the property sale in their GST returns even if the GST charged on the sale of property had already been remitted directly to IRAS by their lawyers.

The sale value of the property (excluding GST) and the corresponding GST amount are to be reported in Boxes 1 and 6 of the GST return respectively.

The update was made on 9 May 2016.

Source: IRAS

IRAS updates online content on GST treatment of computer software maintenance

On By taxsgIn Goods and Services Tax, Latest Tax News

2 February 2016

The Inland Revenue Authority of Singapore (IRAS) has updated its website on the GST treatment of computer software maintenance.

 Computer software maintenance is a supply of services. To determine the GST treatment:

  • the original sale of the computer software has to be considered, and
  • the maintenance service has to be assessed if it is “directly in connection with” goods.

Where the original sale of the computer software is a supply of goods:

  • The provision of software maintenance service may be regarded as being “directly in connection with” goods if it satisfies the factors as explained in the e-Tax Guide, “GST: Clarification on “Directly in Connection With” and “Directly Benefit” (2nd Ed)”.
  • Where it the maintenance service is “directly in connection with” goods, it should be standard-rated i.e. GST is to be charged when the software is situated in Singapore or otherwise, zero-rate if physical work is performed on the software situated out of Singapore.
  • Where the provision of software maintenance service does not qualify as “directly in connection with” goods, then the service can be zero-rated provided the conditions for zero-rating international services are satisfied. GST is to be charged on the software maintenance service if otherwise.

Where the original sale of computer software is a supply of service:

  • the provision of software maintenance service will therefore not be “directly in connection” with goods. The maintenance service can be zero-rated if the conditions for zero-rating international services are satisfied.

For further details, please refer to the IRAS’s website under the GST e-Commerce.

The update was made on 27 January 2016.

Source: IRAS

IRAS updates e-Tax Guide, “GST: Assisted Compliance Assurance Programme (ACAP) (7th Edition)”

On By taxsgIn Corporate Tax, Goods and Services Tax

31 December 2015

On 18 December 2015, the Inland Revenue Authority of Singapore (IRAS) issued the seventh edition of the e-Tax Guide “GST: Assisted Compliance Assurance Programme (ACAP)”.

‘Assisted Compliance Assurance Programme’ (ACAP) was introduced to facilitate GST-registered businesses to better manage their GST risks. ACAP provides a set of guidance for GST-registered businesses to undertake a holistic review of the robustness and effectiveness of their internal control system that impacts GST compliance.

The seventh edition includes changes to the following:

  • Amendment to section 5 on ACAP incentives where IRAS will waive the penalties for voluntary disclosures of non-fraudulent errors for businesses who apply for ACAP participation by 31 March 2019.
  • Amendment to paragraphs 12.1 to 12.5 (Post ACAP Review).
  • Revision to paragraph 12.10 (Renewal of ACAP).

Appendix 1 “GST ACAP Review Guidance”

Amendment to:

  • Paragraph 1.6 (Assessment of Readiness of GST Control Framework): IRAS has provided a “GST ACAP Control Framework Calculator” to facilitate the business’s self-assessment of the extent to which the control features are present.
  • Paragraph 2.1 (Commencement of ACAP Review by the ACAP Reviewer) where it is the responsibility of the CPA firm or its tax affiliate and internal audit team to ensure that it fulfills all the eligibility conditions highlighted in paragraph 8 of the e-Tax Guide “GST: Assisted Compliance Assurance Programme (ACAP)” before accepting the appointment.
  • Paragraph 2.2 (Additional safeguards in the conduct of ACAP Review).

Appendix 2 “Information Leaflet on Post ACAP Review”

  • Editorial changes to paragraphs 2.1(c) and 2.1(d) (Scope of review).
  • Insertion of paragraph 3 (Review period for Post ACAP Review (PAR)).
  • Amendment of paragraph 4.1 on the reduced sample size for standard-rated supplies.
  • Insertion of paragraph 4.2: IRAS may on a case-by-case basis grant approval for reduction in sample size if the business has used analytical tools to perform data analysis of its GST listings such that major streams of income and transactions with higher risk of incorrect tax treatment are identified for substantive review; and
  • Insertion of paragraph 5.1 on regular reviews of the GST returns.

The first edition was published on 5 April 2011.

For further details, please refer to the IRAS’s website.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit http://www.iras.gov.sg for more information.

Fourth Edition of the IRAS e-Tax Guide “Major Exporter Scheme” issued

On By taxsgIn Corporate Tax, Goods and Services Tax

31 December 2015

On 18 December 2015, the Inland Revenue Authority of Singapore (IRAS) issued the fourth edition of the e-Tax Guide, “GST: Major Exporter Scheme”.

The Major Exporter Scheme (MES) is a scheme whereby the payment of GST is suspended at the point of importation of goods. MES traders will be allowed to import non-dutiable goods without paying GST to Singapore Customs (‘SC’). Regulation 45 of the Goods and Services Tax (General) Regulations provides for the suspension of payment by GST-registered persons who qualify for the MES of GST on importation of non-dutiable goods.

GST-registered businesses applying for MES or whose MES status is due for renewal will have to submit the Assisted Self-Help Kit (ASK) declaration form, “ASK: Declaration Form on Completing Annual Review & Voluntary Disclosure of Errors” (Section 3 of ASK) certified by either their own in-house or external tax professionals who are Accredited Tax Practitioners (GST) or Accredited Tax Advisors (GST).

Businesses participating in the GST Assisted Compliance Assurance Programme (ACAP), holding a valid ACAP status will not be required to submit ASK declaration form if:

  • the Post ACAP Review (PAR) is performed; and
  • the “PAR Declaration” form (GST F28) is submitted.

Successful ACAP applicants also are not required to submit the ASK declaration form pending the result of ACAP review and submission of ACAP Report. If they subsequently withdraw from participating in ACAP, businesses are then required to perform and submit the ASK declaration form within three months. Should they fail to obtain an ACAP status, there may be a requirement for submission of the ASK declaration form on a case-by-case basis.

In the fourth edition, paragraphs 2.3 and 6.3 have been revised to reflect the streamlined procedure for submission of the ASK declaration form for businesses with ACAP status as outlined above.

The e-Tax Guide is available on the IRAS website.

The third edition was published on 18 September 2015.

For further details, please refer to the IRAS’s website.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit http://www.iras.gov.sg for more information.