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31 January 2018

Singapore amends Goods and Services Tax

Singapore's Parliament passed The Goods and Services Tax (Amendment) Act 2017 (the GST Amendment Act) on 2 October 2017.

This Alert summarizes the key changes under the GST Amendment Act.

Customer accounting for GST-registered Real Estate Investment Trusts (REIT) and their Special Purpose Vehicles (SPV)

Currently, customer accounting applies to the sale of a non-residential property by a GST-registered supplier to a REIT or its SPV but does not apply to any movable assets (i.e., furniture, furnishings, fittings, appliances or effects) that are supplied together with the sale of the property.

Effective 1 January 2018, customer accounting is extended to movable assets that are supplied together with the sale of a non-residential property by a GST-registered supplier to a REIT or its SPV.

Land zone "Rural Centre and Settlement" and sale of government land with existing building to be demolished

The sale and lease of residential properties are exempt from GST.

Currently, under the Fourth Schedule to the GST Act, this includes any vacant land zoned "Residential" or "Rural Centre and Settlement" in the Master Plan under the Planning Act (Cap. 232) and used or to be used for residential purposes or for the purposes of condominium development. Effective 1 January 2018, the zoning under "Rural Centre and Settlement" is removed as it is no longer in use.

In addition, the GST treatment of the sale of government land with an existing building to be demolished follows the approved use of the land, instead of the approved use of the existing building. With this change, from 1 January 2018, land which is approved exclusively for residential or condominium development that has an existing building that is required by the Government or public authority making the supply to be demolished is exempt from GST.

On the other hand, land that is not approved exclusively for residential or condominium development with an existing building that is required by the Government or public authority making the supply to be demolished is not exempt from GST.

Late submission penalty

To discourage the late filing of GST returns, effective 1 April 2018, the monthly penalty of SGD200 for the late submission of GST returns will commence immediately after the filing due date, instead of one month after the filing due date.

Customer accounting for prescribed goods

Effective 1 January 2019, customer accounting will be implemented for the local sale of prescribed goods by a GST-registered supplier to a GST-registered customer for his business purpose if the GST-exclusive value of the sale exceeds SGD10,000 in a single invoice. The prescribed goods are mobile phones, memory cards and off-the-shelf software.

Additional requirements for invoice details and electronic record keeping

The GST Act has been amended to allow the Comptroller of GST to request a taxable person to include additional details (e.g., model and serial number of the goods supplied) on invoices issued to a non-taxable person (e.g., non GST-registered customer). Additionally, selected businesses might be required to maintain an electronic inventory system with details of sales and purchases.

The change came into operation on 1 January 2018.

"Opt-out" approach for digital tax notices

Currently, businesses are required to provide specific consent before the Inland Revenue Authority of Singapore can issue digital tax notices (i.e., "opt-in" approach). The GST Act has been amended to provide an "opt-out" approach for digital tax notices. Under the "opt-out" approach, businesses that wish to receive hardcopies of tax notices must "opt out." Otherwise, they will only receive digital tax notices.

The change came into operation on 1 January 2018.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Solutions LLP, Singapore

  • Yeo Kai Eng, Indirect Tax Leader
    kai.eng.yeo@sg.ey.com
  • Liza Drew
    liza.drew@sg.ey.com
  • Chew Boon Choo
    boon-choo.chew@sg.ey.com

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ATTACHMENT

PDF version of this Tax Alert

Document ID: 2018-5209

 
 

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