Tag: GST for property purchases by listed REITS and SPVs

IRAS issues e-Tax Guide: “GST: Self-accounting of GST by listed REITs and their SPVs for property purchases (2nd Edition)”

On By taxsgIn Goods and Services Tax

9 January 2015

On 19 December 2014, the Inland Revenue Authority of Singapore (IRAS) issued an e-Tax Guide, “GST: Self-accounting of GST by listed REITs and their SPVs for property purchases (2nd Edition)”.

This guide explains the application and operational details of self-accounting of GST on property purchases by public-listed Real Estate Investment Trusts (listed REITs) and their special purpose vehicles (SPVs).

The sale of a non-residential property is a taxable supply subject to GST. Where the seller is a taxable person, he will have to charge and account for GST on the sale of the non-residential property made to the buyer. On the other hand, the buyer of the property can claim the GST incurred on the purchase if he is GST-registered, subject to the input tax claim conditions under sections 19 and 20 of the GST Act.

Since 1 July 2006, GST-registered listed REITs are able to self-account for the GST payable on the purchases of non-residential properties. Self-accounting of GST for the purchases of non-residential properties was extended to GST-registered SPVs of such listed REITs from 1 January 2009.

Under section 38 of the GST Act, a buyer can account on behalf of the seller, the GST chargeable on a prescribed supply of goods or services. Regulation 104A of the GST (General) Regulations provides that a taxable supply of immoveable property made to:

  • a GST-registered listed REIT, or
  • a GST-registered SPV of a GST-registered listed REIT

is a prescribed supply for the purpose of section 38 of the GST Act.

The above GST treatment applies only to the supply of unfurnished non-residential property, which includes fixtures permanently attached to the property. However, it does not apply to moveable furniture and fittings even if they are sold together with the property. In such an instance, the seller will still be required to charge and account for GST on the portion relating to the furniture and fittings.

In this edition, several footnotes were inserted for clarity and paragraph 5 was renamed as “GST Reporting and Invoicing”. A new paragraph 5.2(d) has also been inserted.

The previous edition was published on 30 September 2013.

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.