13 January 2012 (Source: The Straits Times)
IRAS targets 3 sectors for GST audit
(excerpts)

IRAS will focus on general building contractors, private education institutions and companies that hand-carry exports for its GST audit this year.

Each year, IRAS audits selected industries that are found to have a "higher risk profile" of not complying with tax rules.

According to Mrs Chia-Tern Huey Min, IRAS deputy commissioner (GST and property), IRAS will examine how general contractors handle their billing when they act as a sub-contractors for a construction project, how private education institutions apply GST to course fees for government-funded courses and the documentation of proof of export for hand-carried goods. She cited these areas as common errors made by companies in the three sectors under their audit spotlight this year.

This is the second time that IRAS has announced the scope of its yearly GST audits. In 2009, IRAS targetted electronics wholesale traders, small and medium manufacturers, motor traders and marine fuel traders for its GST audit.

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5 April 2011(Source: The Business Times)
IRAS launches Assisted Compliance Assurance Programme
(excerpts)

IRAS has launched a self-assessment package for businesses to manage their GST risks. The Assisted Compliance Assurance Programme (ACAP) - touted to save businesses $150,000 each - will guide businesses to assess the effectiveness of their GST internal controls on three levels: the entity, transaction and GST reporting levels.

Businesses which meet the standard guidance will be accorded ACAP status and will enjoy benefits such as exemption from GST audits for 3-5 years and automatic renewal of GST schemes.

To encourage more businesses to undertake ACAP, IRAS says that it would co-fund 50 per cent of the fees incurred by a GST-registered business in engaging an ACAP reviewer (who will verify the business's GST controls), subject to a cap of $50,000.

It will also grant a one-time waiver of penalties for past GST errors disclosed voluntarily in the course of the first ACAP review undertaken by the applicant.

IRAS estimates that ACAP could potentially save a business about $150,000 - which includes the cost of hiring an audit firm and the one-time waiver of penalties for past GST errors.

Businesses whose GST controls, at all three levels, have been verified by an independent ACAP reviewer as working well in GST risk management will be accorded either a merit ACAP status, which is for three years, or a premium ACAP status, which is for five years.

They will then enjoy, for those periods: exemption of GST audits by IRAS; expeditious GST refunds; a dedicated IRAS officer to handle GST rulings and resolve GST issues expeditiously; and auto-renewal of GST schemes.

IRAS says that GST-registered businesses may apply for ACAP if they satisfy certain conditions, such as having established key controls at the three critical levels, having an unqualified audit opinion on their latest financial statements and having been GST-registered for at least three years.

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1 January 2011
Changes to time of supply rules kick in

With effect from 1 Jan 2011, the GST rules for time of supply will be changed. IRAS explains that the amendments will help businesses comply with the rules easily.

For most transactions, output tax will be accounted for based on the earlier of the following:

1. When an invoice is issued
2. When payment is received

From 1 Jan 2011, the issuance of any type of invoice will be an event that triggers the time of supply for GST purposes. This invoice includes a tax invoice as well as any document (e.g. debit note) that serves as a bill, for payment for supplies made by a GST-registered supplier.

Before 1 Jan 2011, the issuance of a tax invoice - and not any other type of invoice - was considered an event that would trigger the time of supply. 

For GST time of supply purposes, documents such as sales orders, pro-forma invoices, statements of accounts and letters/statements of claims are not considered as invoices. According to IRAS, these documents are often not billing for payments and would therefore not be treated as invoices based on normal commercial practices.

Further information on the changes to the time of supply rules may be found in the GST: Time of Supply Rules e-Tax Guide.

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16 August 2010
22 suggestions to be incorporated into draft GST bill and e-Tax Guides

The Ministry of Finance (MOF) has accepted for implementation 22 out of the 38 suggestions on the draft GST (Amendment) Bill 2010. Received during the public consultation exercise held from 1 to 18 June 2010, these suggestions will be incorporated into the revised GST (Amendment) Bill 2010 or IRAS' e-Tax Guides.

Amongst the changes are the following which were announced in the Budget 2010 Statement. These tax changes are aimed at easing the cash flow management of businesses and lowering their GST compliance cost:

(a) Expanding the scope of zero-rating of GST for the marine and aerospace sectors;

(b) Simplifying the accounting of GST on most supplies to the earlier of invoice date or payment date; and

(c) Introducing a new scheme to allow approved businesses to defer import GST that is currently payable on goods upon their entry into Singapore.

Other changes include the following which seek to clarify existing GST legislation or to improve the administration of GST:

(1) Clarifying that GST is not chargeable on (i) imported goods that are supplied and remain within Free Trade Zones, Zero-GST or Licensed Warehouses; and (ii) goods that are locally manufactured, supplied and remain within warehouses licensed under the Customs Act;

(2) Updating the GST Act to align with the methods of valuation as prescribed in Customs legislation or the last selling price, where applicable, for the purpose of valuation of imported goods and thus the levying of import GST;

(3) Clarifying the definition of residential property for the purpose of GST exemption;

(4) Introducing measures to facilitate the self-assessment of transactions qualifying under the Approved Contract Manufacturer and Trader (ACMT) scheme; and

(5) Allowing the Comptroller of GST to provide for a wider scope of electronic services.

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13 August 2009
9 amendments to be incorporated into draft GST bill

The Ministry of Finance (MOF) has accepted for implementation 9 out of the 16 suggestions received on the draft GST (Amendment) Bill 2009 during the public consultation exercise held from 3 to 24 June 2009.

The draft GST (Amendment) Bill 2009 contains proposed legislation to put into effect the following tax changes announced in Budget 2009, as well as other changes arising from the periodic review of the GST system:

(a) Zero-rating treatment for all aircraft used wholly for international travel as well as the sale and lease of aircraft parts forming part of a qualifying aircraft;

(b) GST suspension for goods temporarily removed from Zero-GST or Licensed Warehouses for auctions and exhibitions;

(c) GST registration of a trust in the name of the trust (as an alternative to registering in the name of the trustee);

(d) Extension of the current GST treatment for physical vouchers to all forms of vouchers including electronic vouchers; and

(e) Requirement for taxpayers to state their grounds of objection when applying for a review or revision of a decision made by the Comptroller of GST.

9 suggestions have been accepted for implementation, and will be incorporated in the revised GST (Amendment) Bill 2009 or IRAS’ e-tax guides, or be studied by IRAS as part of its periodic review of the GST system. MOF said the remaining 7 suggestions were not accepted for implementation as they were inconsistent with drafting convention for legislation or policy objectives of the tax changes.

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4 August 2009 (Source: The Business Times)
IRAS announces scope for GST audit
(excerpts)

IRAS will focus on electronics wholesale traders, small and medium manufacturers, motor traders and marine fuel traders for its GST audit this year.

IRAS audits selected industries every year, and within each industry, it focuses on companies which, according to its assessment, have a "higher risk profile" of flouting tax rules, said Chia-Tern Huey Min, IRAS deputy commissioner (GST and property).

Mrs Chia-Tern said that this is the first time that IRAS has announced the scope of its yearly GST audits. This is to draw attention to certain issues in specific industries that commit common errors.

For instance, common errors made by wholesale traders include claiming back GST twice on the same invoice and claiming tax on invoices from non-GST registered suppliers or on invoices addressed to another company.

SME manufacturers sometimes wrongly zero-rate goods delivered locally - this can be done only on exported goods, she said.

Motor traders also tend to wrongly apply what is known as a gross margin scheme to calculate the GST payable.

Marine fuel traders will be audited for the first time, IRAS said. The audit will focus on 30 traders that qualify for the 2005 Approved Marine Fuel Trader scheme, which allows them to purchase marine fuel oil locally without paying GST.

Other common general pitfalls include not registering eligible businesses for GST and not showing GST-inclusive prices.

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10 March 2009
IRAS introduces mobile service to check whether a business is GST-registered

Leveraging on mobile technology, IRAS has launched a convenient self-help facility for taxpayers/consumers who may not Internet access to check if a business is GST-registered.

One may now check whether a business is GST-registered via his/her mobile phone.
This service is free; however, prevailing SMS charges apply.

To search for a business' GST registration status via the IRAS mobile service, simply SMS the query to 9116-4900. You may search using either the name of the business or the GST registration number (the latter helps confirm whether the business has been de-registered). For example:

GSTREG<space>ABC TRADING
GSTREG<space>M12345678Z

Besides the mobile service, you may check online whether a business is GST-registered via the Register of GST-registered Businesses.

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22 January 2009
GST changes announced in Budget 2009

The following changes pertaining to GST were announced in the recent Budget Speech for the Financial Year 2009:

(a) Changes to the GST treatment of aircraft and aircraft-related supplies, with effect from 1 Apr 2009:

(i) Revision to the definition of 'qualifying aircraft';

(ii) Extension of zero-rating relief to cover the sale, maintenance and repair services of aircraft components or systems as long as they form part of a qualifying aircraft;

(iii) Import GST suspension for approved aerospace players under a new scheme.

(b) With effect from 1 Apr 2009, GST will be suspended on the following:

(i) Temporary removal of goods stored in any Zero GST or LIcensed Warehouse for auctions or exhibitions, provided the goods are returned to the warehouse after the auction or exhibition;

(ii) Sale of these goods at the auction or exhibition, provided the goods are returned to the warehouse subsequently.

(c) Qualifying funds managed by prescribed fund managers will be allowed to recover a portion of the GST incurred on prescribed expenses incurred from 22 Jan 2009 to 31 Mar 2014 (both dates inclusive).

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17 November 2008 (Source: The Straits Times)
Many firms lack resources to handle GST issues: Survey
(excerpts)

Companies believe GST is getting more complex but many do not have enough clued-up staff to deal with it.

A survey of 237 organisations by accounting firm KPMG found nearly 70 per cent saying they were moderately or very concerned with the growing volume and complexity of GST issues.

The survey also found that 62 per cent of the companies were worried about the threat of penalties for non-compliance, while 60 per cent said they did not have enough resources to deal with issues surrounding the sales tax.

There have been cases of businesses being prosecuted for evading the tax, which was raised from 5 per cent to 7 per cent last year.

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15 September 2008
GST Reporting - Additional item with effect from February 2009

With effect from February 2009, an additional item titled "Revenue" will be incorporated in GST F5 Returns to capture the revenue of businesses.

Definition of Revenue by IRAS
"Revenue" refers to the main income source of a company/business as reflected in its profit-and-loss account.

This new "Revenue" figure will be entered into a new Box, Box 13 of the GST F5 form.

The first GST return that will be affected under the different filing frequencies will be as follows:

Our "Mastering the Basic & Intermediate Concepts of GST" notes has been revised to incorporate this change.

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1 October 2007
Changes to the requirement to file GST F7 (Disclosure of Error Form)

IRAS has revised the threshold before you are required to file a GST F7, The new requirements are:

(i) the net GST amount in error for all the prescribed accounting periods affected is more than $1,500 (previously only $500); and

(ii) the summation of errors in each prescribed accounting period is more than 5% of the total supplies.

This means that if your errors are within the threshold, you can just correct the errors in your current GST F5 form without having to file a GST F7.

Should your errors cover more than 1 accounting period, you are also allowed to consolidate the errors and report in one GST F7 on a per annum (financial/ calendar/tax year) basis.

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1 October 2007
Administrative Concession for Public Liability Insurance

From 1 Oct 2007, IRAS allows GST incurred on public liability insurance to be claimable by way of administrative concession.

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27 February 2007 (Source: Today)
SMEs to get GST grant
(excerpts)

For the first time, small and medium enterprises (SMEs) will get $30 million of state help to cope with higher GST.
  
Those that voluntarily register to become GST traders for the first time will each receive a one-time grant of up to $5,000 to defray set-up costs. About 10,000 locally-based companies will benefit, Spring Singapore said yesterday.
  
The grant will cover up to 100 per cent of the accounting software costs – which ranges from $99 to $1,600 depending on company size – plus up to half of the hardware costs, professional fees, and Internet connection costs. To qualify, a company’s fixed assets must not exceed $15 million and have no more than 200 staff for non-manufacturing outlets.

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10 February 2007 (Source: The Straits Times)
Small Businesses – To be GST registered… or not?
(excerpts)

Before taking the step to get registered, the trader must work out what it costs to fulfill his obligations.
  
For one thing, does the company have enough resources to handle the quarterly GST filings to the taxman?
  
Staff must be trained to make sure they complete the forms every quarter. The net GST must be paid to the taxman within one month of the end of the quarter, or penalties kick in.
  
The company’s accounting system has to be amended too, to make sure invoices include the correct GST rating. The same for all expenses, which must be accounted for.

It is an added burden – that falls not only on the accounting team but also on  staff handling IT, shipping, sales and purchasing.
  
And companies must keep all their documents for seven years.
  
The need to train staff properly cannot be under-rated, because it is easy to run foul of the system.
  
Companies must remember that once they sign on as GST traders, they have to stay for at least two years.
  
Running foul of the GST system can mean hefty penalties.
  
Failure to file a GST return attracts a penalty of $200 per month up to a maximum of $10,000.

Late payment penalty starts from 5 per cent of the unpaid tax.

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