Gst Class Presentation Slides

109
1 GOODS AND SERVICES TAX (GST) “Introduction to GST”

Transcript of Gst Class Presentation Slides

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GOODS AND SERVICES TAX (GST)

“Introduction to GST”

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E-LEARNING

• “Introduction to GST” course can now be done online!

• e-Learning mode is strongly encouraged over seminar

• Benefits include:

- On-demand availability: accessible anytime and anywhere at your convenience

- Self-pacing: control over the pace of learning and modules can be reviewed as often as needed

- Interactivity: higher knowledge retention through active learning and use of examples and interactive exercises etc.

For more information, please visit: www.iras.gov.sg > GST > For GST-registered businesses > GST Course "Introduction to GST" (e-Learning/Seminar) 

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COURSE OUTLINE

1. GST and My Responsibilities

2. Charging GST on Sales

3. Charging GST on Other Transactions

4. Claiming GST on Business Purchases and Imports

5. Price Display, Invoicing and Record-keeping

BREAK

6. e-Filing GST returns and Correcting Mistakes

7. Penalties and Recovery Actions

8. Tips on Compliance

9. Notifying of Changes to Business and Cancelling GST Registration

10. Where to Get Help

GST Courses by Tax Academy

Q&A

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What is GST?

How does GST Work?

What are the Responsibilities of a GST-registered

Business?

Relevant e-Tax Guides:

“GST: General Guide For Businesses”“Do I Need to Register?”

1. GST and My Responsibilities

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What is GST?

• Tax on domestic consumption of goods and services and importation of goods

• Paid when:

- Goods or services are purchased from GST-registered businesses

- Goods are imported into Singapore (collected by Singapore Customs at point of importation)

• Self-assessed tax

1. GST and My Responsibilities

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equalsNet GST

GST paid on business

purchases(Input tax)

less

GST on supply of goods & services

(Output tax)

How does GST Work?

-+

Payable to Comptroller

Refundable from Comptroller

1. GST and My Responsibilities

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GST-Registered Retailer

$700 + $49 (7% GST)

Output tax = $49Input tax = $35

Net GST payable = $14

End-consumer

$1000 + $70 (7% GST)

Output tax = $70Input tax = $49

Net GST payable = $21

GST-Registered Wholesaler

$500 + $35 (7% GST)

Import GST = $35

1. GST and My Responsibilities

Overseas Supplier

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A GST-registered business must: 1.Submit returns and pay tax in a timely manner

2.Submit accurate GST returns

3.Maintain listings and keep business and accounting records for 5 years

4.Assist in GST audit

5.Display prices with GST

6.Reflect GST registration number on all tax invoices and receipts

7.Inform IRAS of changes to the business

8.Account for GST on business assets held at point of de-registration

In the subsequent parts of this course, you will learn how to fulfill these 8 basic responsibilities.

1. GST and My Responsibilities

What are the Responsibilities of a GST-registered Business?

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2. Charging GST on Sales

Relevant e-Tax Guides:

“GST: General Guide For Businesses”“GST: Time of Supply Rules”“GST: A Guide on Export”“Do I Need to Register?”“Accounting for GST Absorbed by Businesses”

Scope of Tax

Value of Supply Subject to GST

Absorbing GST

Accounting for GST

Bad Debt Relief Claim

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GST-registered businesses should charge GST on any supply of goods or services if it is :

i) made in Singapore

ii) a taxable supply

iii) made by a taxable person

iv) in the course or furtherance of the business

Scope of Tax

2. Charging GST on Sales

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Goods or Services?

Goods Services

•Possessions obtained in exchange for money or in kind

•Generally tangible objects

•Could be new or second-hand Example: Furniture Utilities (e.g. water, electricity) and space for rent/ sale are treated as goods for GST purposes.

•Anything that is not goods

•Performance of duty or work for another person

•Generally intangible

Example: Hairdressing Service

2. Charging GST on Sales

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i) Is the supply made in Singapore?

Goods are supplied in Singapore if the goods are in Singapore or from Singapore at the time of supply

Services are supplied in Singapore if the supplier belongs in Singapore

2. Charging GST on Sales

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TAXABLE SUPPLIES NON-TAXABLE SUPPLIES

1. Standard-Rated Supply (7% GST)• Local sales of goods & services• Sale of Capital Assets

1. Exempt Supply• Sale and Lease of Residential Properties• Financial Services• Local Sale of Investment Precious Metals

(IPM)

2. Zero-Rated Supply (0% GST)• Export of Goods• International Services

2. Out-of-Scope Supply• Third Country Sales (Sales outside Singapore)• Transhipments• Disbursements

ii) Is the supply taxable?

2. Charging GST on Sales

Taxable supply refers to the supply of goods or services made in Singapore, other than an exempt supply and out-of-scope supply.Types of supplies

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iii) Who is a taxable person?

2. Charging GST on Sales

A person that is GST-registered or is required to be registered for GST under the GST Act.

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GST registration liability

• Registering for GST is compulsory when:

- Turnover of your business is more than $1 million in the current quarter and the past 3 quarters; or

- You are currently making sales and can reasonably expect the turnover to exceed $1 million for the next 12 months

• Otherwise, the company need not register for GST, unless it chooses to do so voluntarily

2. Charging GST on Sales

Additional responsibilities for voluntarily registered businesses

• remain GST-registered for at least 2 years

• make taxable supplies within 2 years if you have not started making taxable supplies at the point of registration

The Comptroller may also impose other conditions and may cancel your GST registration if any of the conditions are not met.

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GST registration liability - Rules for Sole-proprietor (SP) and Sole-proprietorship (SPship) businesses

•For SPship businesses, GST registration is in the name of the SP, not the SPship business

•All SPship businesses under the SP’s name will be GST-registered. This includes any SPship business which you may set-up in the future

•SP should use the same GST registration number to charge GST for all existing SPship businesses and any newly set-up SPship business (with effect from the date of commencement of the new business)

•Notify IRAS of any new SPship business by sending in its ACRA Business Profile

2. Charging GST on Sales

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GST registration liability - Rules for Partnership (PP)

•GST registration will be in the name of the respective PP businesses

•Once your PP is GST-registered, all PP businesses with the same composition of partners will be liable to register for GST. This also includes future PP business set-up with the same composition of partners

•Submit GST F1 (Application for GST Registration) and GST F3 (Details of all Partnerships and Partners) for the new PP business

2. Charging GST on Sales

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2. Charging GST on Sales

iv) What is meant by in course or furtherance of the business?

Activities carried out in connection to the business either directly (e.g. sales of trading stocks) or incidentally (e.g. recovery of expenses from a related company).

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APPLICATION EXERCISE

SuppliesStandard-

Rated (7% GST)

Zero-Rated (0% GST)

Exempt Out-of-scope

a) Sale of $400,000 worth of goods sent to a local customer for his export to Japan.

b) Deposit of $35,000 in a local bank, which yielded an interest of $1,500.

c) Deposit of $35,000 in an overseas bank, which yielded an interest of $1,500.

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ScenariosTaxable Supply?

Made by taxable person?

In course or furtherance

of business?Charge GST?

d) A GST-registered art dealer bought a painting in London, sells and directly sends it to his customer in Japan.

e) A GST-registered art dealer imported a painting from London, sells and exports it to his customer in Japan.

f) A GST-registered sole-proprietor receives income (fares) from part time taxi-driving.

N Y Y

Y Y Y

Y Y Y

N(out-of-scope)

Y(0%)

Y(7%)

APPLICATION EXERCISE

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ScenariosTaxable Supply?

Made by taxable person?

In course or furtherance

of business?Charge GST?

g) A developer develops and sells solely residential properties.

h) A GST-registered developer develops and sells residential and commercial properties in a mixed development project in Singapore.

i) A GST-registered developer develops and sells commercial properties outside Singapore.

N N Y

N Y Y

Y (Commercial) Y Y

N(exempt)

Y(7% - commercial)

(Exempt - residential)

N(out-of-scope)

APPLICATION EXERCISE

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Value of Supply Subject to GST

2. Charging GST on Sales

Value of Supply Example

a) Trade/ Cash discount given

Discounted price/ Prompt payment

discount

If my customers pay me within 14 days from the issuance of my tax invoice, I will give a 10% prompt payment discount.

GST will be chargeable on the discounted price whether or not the discount is subsequently given.

Note: This clause should be clearly stated in the invoice.

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Value of Supply Example

b) Transactions with related parties

Open Market Value (OMV) of

goods

Co. A (GST-registered), sold the company’s furniture (market value $5,000) to one of its directors at $800.

Value of supply = $5,000GST = $5,000 x 7%

2. Charging GST on Sales

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Absorbing GST •To maintain competitiveness or as a form of goodwill, you may choose to ‘absorb’ the GST payable by your customer

•The sum of money received from your customer will be treated as inclusive of GST

•The GST to be accounted for is based on the tax fraction of 7/107 of the consideration received

 Example: You sell a good at $100. If you choose to absorb the GST, $100 is treated as inclusive of GST.

Value of Supply = $100 X 100/107 = $93.46GST = $100 X 7/107 = $6.54

2. Charging GST on Sales

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Accounting for GST

In general, you should account for GST at the earlier of the following events:

• Invoice issued; or• Payment received

For more information, you may refer to the e-Tax Guide “GST: Time of Supply Rules”.

Note: Prior to 1 January 2011, the general time of supply rule is the earliest of the following events:1.Goods removed/made available or Services performed; (“Basic Tax Point”)2.Tax invoice issued (subject to 14-day rule); or3.Payment received

2. Charging GST on Sales

BASIC TAX POINT & 14-DAY RULE NOW REMOVED

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Total value of goods sold = $11,000

Invoiced for $11,000 and

received part-payment of

$5,000

01/01/12

Goods removed (Value = $11,000)

31/01/12

Received remaining payment of

$6,000

01/02/12

Account for GST on: 31/01/12 (on $11,000)

APPLICATION EXERCISE

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Bad Debt Relief Claim A bad debt situation occurs when money owed cannot be recovered. Bad debt relief

claim can be made on output tax that was previously accounted for and paid to IRAS if you meet the conditions below:

 

 Please complete the "Self-review of Eligibility to Claim Bad Debt Relief" form

(www.iras.gov.sg> Quick links> Forms>GST) before making the claim in your current GST return. Do not submit the form to IRAS unless requested.

Conditions

1 I have supplied goods or services for a consideration in moneyand have accounted for and paid GST on the supply.

2 I have written off the whole or any part of the consideration for the supply as a bad debt in my accounts.

3 A period of 12 months beginning with the date of supply has elapsed or the debtor has become insolvent before the period of 12 months has elapsed.

4 I have taken reasonable steps to recover the debts.

2. Charging GST on Sales

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283. Charging GST on Other Transactions

Giving Goods and Services for Free

Fringe Benefits to Staff

Recovery of Expenses

Sale of Business/Capital Assets

Trade-in Transaction

Relevant e-Tax Guides:

“GST: General Guide for Businesses” “Fringe Benefit”“Use of Business Premises By Third Party for Free”

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Giving Goods and Services for FreeGiving Services for Free

• No output tax to be accounted for

Giving Goods for Free (i.e. Free Gifts)

Prior to 1 Oct 2012

• Deemed as supply of goods• Output tax to be accounted for based on the OMV of goods in

the following situations:1. GST was incurred on purchase of goods;2. Cost of gift > $200; or3. Cost of gift ≤ $200, but 3 or more gifts were given to the same

person within 3 months

From 1 Oct 2012• You only need to account for output tax if the cost of each gift

exceeds $200; and• If input tax on those goods has been allowed to you.

3. Charging GST on Other Transactions

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Fringe Benefits to Staff

Prior to 1 Oct 2012• Goods and services given free to all employees• Output tax to be accounted for on goods given free except in the

following situations:

1. Cost of gift ≤ $200 and it does not form a series of 3 or more gifts (regardless of value) given to the same person within 3 months;

2. It is a free supply of food or accommodation

• Output tax to be accounted for if GST was incurred on the purchase

With effect from 1 Oct 2012• Output tax to be accounted for on goods given free except in the

following situations:1. A free supply of food or accommodation;2. Gifts of value not more than $200 each; or3. Gifts for which no credit for input tax has been allowed on its

purchase.

3. Charging GST on Other Transactions

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Recovery of Expenses

Whether GST needs to be charged for the recovery depends on whether it is treated as a reimbursement or disbursement

• Reimbursement: GST chargeable

• Disbursement: GST not chargeable

3. Charging GST on Other Transactions

Invoice addressed to you

Payment

Re-bill to recover the amount paid(Charge GST)Supplier Co A

Co BE.g. your subsidiary

or customerPayment

Invoice addressed to Co B

Payment

Re-bill to recover the amount paid

(No GST)Supplier Co ACo B

E.g. your subsidiary or customer

Payment

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Reimbursements Disbursements

Co A paid supplier on Co B’s behalf and recovered the cost subsequently

Supplier issued tax invoice to Co A

(Co A is the contracting party with supplier)

Supplier issued tax invoice to Co B

(Co B is the contracting party with supplier)

Co A is legally responsible to pay supplier

Co B is legally responsible to pay supplier

When Co A invoices Co B to recover the amount,

GST is chargeable

When Co A invoices Co B to recover the amount,

GST is not chargeable

3. Charging GST on Other Transactions

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Sale of Business/Capital Assets

• GST-registered businesses must account for GST on all taxable supplies made

• GST is chargeable on the sale of business/capital asset though it is not considered the main business activity

• For example, sale of office equipment, factory or old furniture is subject to GST

3. Charging GST on Other Transactions

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Trade-in Transaction

• Treated as 2 separate supplies for GST purpose• GST must be accounted for on the value of the 2

separate supplies• Incorrect to account for GST on the net difference

only

3. Charging GST on Other Transactions

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353. Charging GST on Other Transactions

A Year End Sale Not to be Missed!!!

Photocopiers are going at an unbeatable price of $650 only!!

Even more incredible news!!! Trade in your old photocopier for a BRAND NEW photocopier for only

$450!!

Unbelievable but true!! So come on down to our stores now !!!

If both buyer and supplier are GST-registered and buyer traded-in an old photocopier for a new photocopier:

1) Buyer needs to issue a tax invoice to supplier for $200 x prevailing GST rate.

2) Supplier needs to issue a tax invoice to buyer for $650 x prevailing GST rate.

If buyer is GST-registered but supplier is not:

1) Buyer needs to issue tax invoice to supplier for $200 x prevailing GST rate.

2) Supplier cannot charge GST on $650.

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Conditions for Claiming Input Tax

Disallowed Expenses

Claiming Input Tax

Claiming Input Tax on Purchases Paid in Foreign Currency

Situations where Input Tax Claims are Disallowed

Claiming Pre-registration Input Tax

Repayment of Input Tax

Relevant e-Tax Guides:

“GST: General Guide For Businesses”“Exchange Rates for GST Purposes”“GST Guide on Imports”

4. Claiming GST on Business Purchases and Imports

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Conditions for Claiming Input Tax

You can claim GST incurred on your purchases as input tax if:

• You are GST-registered;

• The goods or services have been supplied to you or the goods have been imported by you;

• The goods or services are used or to be used for the purpose of your business;

• The input tax is directly attributable to taxable supplies or out-of-scope supplies which would be taxable if made in Singapore;

• The input tax claims are supported by tax invoices/ simplified tax invoices addressed to you. For imports, the claims should be supported by import permits showing you as the importer of the goods; and

• The input tax claims are not disallowed expenses under Regulation 26 and 27 of the GST (General) Regulations

4. Claiming GST on Business Purchases and Imports

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Disallowed Expenses

You are not allowed to claim input tax incurred on the following expenses:

a) Club subscription feesb) Medical and accident insurance premiums*c) Medical expenses*d) Benefits provided to family members/relatives of your staffe) Cost and running expenses of motor carsf) Any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance

*Except those obligatory under the Work Injury Compensation Act or under any collective agreement within the meaning of the Industrial Relations Act.

4. Claiming GST on Business Purchases and Imports

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Claiming Input Tax

•Tax invoices and import permits are the primary documents for input tax claim and must be maintained to support the claim

•Other relevant documents like payment evidence, invoice from overseas supplier etc. must also be maintained

•Import permits should reflect your company as the importer of the goods

•Input tax to be claimed in the accounting period corresponding to the date shown in the tax invoice and import permit

4. Claiming GST on Business Purchases and Imports

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Claiming Input Tax on Purchases Paid in Foreign Currency

•For invoicing in foreign currency, your supplier must convert the following items in the tax invoice into Singapore dollars using an approved exchange rate for GST purposes:

- Total amount payable excluding GST;

- Total GST payable; and

- Total amount payable including GST

• You should claim the GST incurred based on the Singapore dollar amount shown on the tax invoice

4. Claiming GST on Business Purchases and Imports

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Case 1 No valid supporting document

Invoice issued in Co X’s name without the words “Tax Invoice” stated on the document

The purchases were for Co X’s use Co X claimed input tax based on this invoice

which does not comply with the requirements of a tax invoice

Co X’s input tax claims will be disallowed

Case 2 Private Expenditure

Mr. X (GST-registered sole-proprietor) holds tax invoices issued to him

The GST was incurred for construction of his own residential property

Expenditure is of private nature Mr. X's input tax claims will be disallowed

Situations where Input Tax Claims are Disallowed

4. Claiming GST on Business Purchases and Imports

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APPLICATION EXERCISE

No Scenarios Yes or No

1 My company owns a motorcar for business use. Can I claim for the purchase, petrol and parking charges?

2

My company purchased goods from overseas and will import the goods into Singapore. My forwarder has declared my related company as the importer. Can my related company or my company claim the GST on import?

3 I allow my staff to claim for their handphone bills. The handphone bill is in my staff’s name. Can I claim the GST?

No

No

Yes (For business purposes only)

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Claiming Pre-registration Input Tax

For purchases made before your GST registration, you can claim the GST incurred if all the following conditions are satisfied:

GOODS SERVICES

1. Goods are purchased or imported in the course of business for making taxable supplies.

1. Services are purchased for and supplied in the course of business for the making taxable supplies.

2. Goods are not consumed or supplied before date of GST registration.

2. Services are not related to goods/services already supplied or consumed before date of GST registration.

3. A stock account is maintained with these details - date of purchase , quantities purchased etc.

3. Services are not supplied more than 6 months before date of GST registration.

4. Record is maintained with these details - description of services; date of purchase; and date of disposal (if any).

4. Claiming GST on Business Purchases and Imports

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Claiming Pre-registration Input Tax

How to claim?

1) Download and complete the “Self-Review for Eligibility to Claim Pre-Registration Input Tax” form (www.iras.gov.sg > Quick links > Forms > GST)

2) Do not submit the form to IRAS unless requested.3) Claim pre-registration input tax only in your first GST F5 return.

If the GST F5 return has been submitted, to request for GST F7 to amend the GST F5 submitted.

4. Claiming GST on Business Purchases and Imports

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GST registration date : 01/01/2012GST Incurred on Goods:

Invoice Date Description Amount Claimable?

i) 01/11/11 Purchase of stocks $1,000

ii) 30/11/11 Utilities charges $300

iii) 15/12/11 Office rental $2,500

iv) 01/12/11 Imports which $900 are sold on 31/12/11

APPLICATION EXERCISE

Yes

No

No

No

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GST registration date : 01/01/2012GST Incurred on Services:

Invoice Date Description Amount Claimable?

v) 01/05/11 Management fee $1,000

vi) 30/11/11 Consultancy fee $2,000

vii) 01/11/11 Commission paid $500 for goods sold on

01/11/11

APPLICATION EXERCISE

No

No

Yes

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Repayment of Input Tax

• If you have not paid your supplier within 12 months from the due date of payment but have claimed the GST as input tax in your GST F5 return, you are required to repay the GST claimed

• Do so in the first GST F5 after the 12-month period by: 1. Reducing the value of your taxable purchases (Box 5,

“Value of taxable purchases”); and2. Reducing the value of the input tax claim (Box 7,

“Input tax and refunds claimed”).

4. Claiming GST on Business Purchases and Imports

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Displaying Prices

Invoicing Customers

Keeping Records

Relevant e-Tax Guides:

“GST: General Guide For Businesses”“Exchange Rates for GST Purposes”“Basic Record Keeping Guide for GST-registered Businesses”“Keeping Machine-sensible Records and Electronic Invoicing”“Keeping of Records in Imaging Systems”

5. Price Display, Invoicing and Record-keeping

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Displaying Prices

• Any price displays (e.g. price tags, price lists, publicity brochures, advertisements) or quotations in respect of goods or services made to the public, be it written or verbal, must be shown inclusive of GST

• Failure to comply is an offence

Exception: - Hotel and Food & Beverage (F&B) industries where goods

and services are subject to service charge may display GST exclusive price

- A statement informing customers that prices displayed are subject to GST and service charge must be prominently shown

5. Price Display, Invoicing and Record-keeping

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APPLICATION EXERCISE

Displaying prices: Which are acceptable?

Price Displayed as Acceptable?

$107

$107 (inclusive of GST)

$100 +

$100 + GST

$100 + 7% GST

$100 + $7 GST

Yes

Yes

No

No

No

No

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Invoicing Customers

5. Price Display, Invoicing and Record-keeping

Importance of tax invoice

• Primary supporting document for input tax claims

When to issue a tax invoice?

• Must be issued if making a standard-rated supply to a taxable person

• Within 30 days from the receipt of payment

When not to issue a tax invoice?

No need to issue tax invoices for:• zero-rated supplies• exempt supplies• deemed supplies

Issuing tax invoices

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Issuing tax invoice in foreign currency

For tax invoice issued in foreign currency, the following items on the tax invoice must be converted into Singapore dollars:• total amount payable excluding GST;• total GST amount; and• total amount payable including GST

The conversion must be based on an approved exchange rate.

5. Price Display, Invoicing and Record-keeping

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TAX INVOICE

Gallery Photo Supplier 888 Jalan Ang Teng Singapore 560009

GST Reg No: M2-1234567-K(Customer’s Name)

(Customer's Address) Date:

(Customer's Address) Invoice No: F012345

Type of Supply: Cash / Credit Sale

S/No Description Qty Unit Price Total Discount Total

($) ($) ($) ($)

1 Yashica MG2 10 90 900 45 855.00

2 Pentax Z-1 Body 20 1,000 20,000 1,000 19,000.00

Total 19,855.00

Add GST @ 7% 1,389.85

Amount Due: 21,244.85

Thank you. We look forward to being of service to you again.

01/07/2007

Contents of a tax invoice

1. An identifying number2. Invoice date3. Customer’s name (or business

name) and address4. Description of goods and

services5. Supplier’s name, address and

GST registration number6. The words “tax invoice”7. Total amount payable excluding

GST, total GST amount shown separately

8. Total amount payable, including GST

9. Breakdown of standard-rated, zero-rated, exempt or other supply if any and the gross amount payable in respect of each supply

6

7

5

4

21

3

8

5. Price Display, Invoicing and Record-keeping

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Issuing simplified tax invoices

When to Issue?• Amount payable including tax ≤ $1,000• Only for standard-rated supplies

What must be shown on a simplified tax invoice?• Supplier’s name, address and GST registration number• An identifying number (e.g. invoice number)• Invoice date• Description of the goods or services• Total amount payable including GST• The words “Price Payable inclusive of GST”

5. Price Display, Invoicing and Record-keeping

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Keeping Records

Income, purchase and business expense records

• Tax invoices/simplified tax invoices/receipts issued/received

• Business contract and agreement

• Credit notes and debit notes

• Import and export documents (e.g. import and export permit, bill of lading, air waybill)

• Payment evidence (e.g. bank statement)

• Tourist refund claim forms etc.

5. Price Display, Invoicing and Record-keeping

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Other records to support GST declarations

• Source documents of all other business transactions which affect the output and input tax reported in the GST return

• Examples include:

- Usage of business assets for private purposes

- Disposal of business assets

- Removal of goods from customs-licensed warehouse

5. Price Display, Invoicing and Record-keeping

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Statements and accounting schedules

• The following should be maintained for the tracking and summary of records:- General Ledgers/ Debtors and Creditors Ledgers- Purchase Orders and Delivery Notes- Purchase and Sales Books/ Cash Books and other account books- Records of daily takings- Stock records- Bank Statements and Bank-in Slips - Relevant Business Correspondences- GST Accounts- Financial Statements - Statement of accounts such as Balance sheet and Profit and Loss

Statements etc.

5. Price Display, Invoicing and Record-keeping

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Sales and purchase listings• Recommended format as follows:

Sales Listing

Purchases Listing

Invoice date

Invoice number

Name of customer

Description of supply

Invoice amount

excluding GST ($)

GST ($)

(if applicable)

Destination of goods

(if applicable)

Invoice date

Invoice number

Name of supplier

Supplier’s GST

registration number

Description of purchase

Invoice amount excluding GST

($)

GST ($)

5. Price Display, Invoicing and Record-keeping

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How long do I keep records and accounts?

Accounting records pertaining to prescribed accountingperiod ending:

• On or after 1 January 2007 – to keep for at least 5 years

• Before 1 January 2007 – to keep for at least 7 years

5. Price Display, Invoicing and Record-keeping

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BREAKBREAK(Please note that no refreshments will be provided)

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Overview of e-Filing

Completing GST F5

Important Things to Note on e-Filing

Correcting Mistakes in GST Return

Relevant e-Tax Guide/ User Guide:

“How Do I Prepare My GST Returns?”“GST e-Filing User Guide”“GST: A Guide on Exports”

6. e-Filing GST Returns and Correcting Mistakes

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Overview of e-Filing

Step 1

Authorise Staff/Third Party to act for your organisation’s GST

matters online

•You need your organisation’s e-Services Access Code to log in•This step is required only if you are e-Filing GST return for the first time or if you need to edit an earlier authorisation

via e-Services Authorisation System (EASY)

http://mytax.iras.gov.sg/easy

Step 2 Retrieve and Complete GST F5via myTax Portal

http://mytax.iras.gov.sg

For detailed instructions, you may download the “GST e-Filing User Guide” at www.iras.gov.sg> Quick links> e-Services> GST.

6. e-Filing GST Returns and Correcting Mistakes

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Box 1: Total value of standard-rated supplies

The amount to report in Box 1 is the value of supplies which are subject to GST. This value should exclude the GST amount.

Example: If you sell goods for $100 with $7 of GST, you should include $100 in Box 1. 

Completing GST F5

What to include

• Supplies of goods made in the course of your businessE.g. Inter-company sale of goods (if not under Group/ Divisional

Registration), lease of machinery• Supplies of services made in the course of your business • Sale of business assets • Deemed supplies E.g. Gifts > $200 or forms a series of gifts OR Business assets put to

non-business use

What to deduct

• Reduction in the value of standard-rated supplies for which a credit note has been issued or a debit note has been received

6. e-Filing GST Returns and Correcting Mistakes

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Box 2: Total value of zero-rated supplies

What to include

• Supplies of goods which are exported• Supplies of international services as listed in

section 21(3) of the GST Act

What to deduct

• Reduction in the value of zero-rated supplies for which a credit note has been issued or a debit note has been received

What to include

• Sales and leases of residential properties• Supplies of financial services under the Fourth Schedule to

the GST Act E.g. Interest from local banks, sale of equity, absolute value (i.e.

to ignore any negative sign) of net realised exchange gain/loss for each prescribed accounting period

Box 3: Total value of exempt supplies

6. e-Filing GST Returns and Correcting Mistakes

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Box 3: Total value of exempt supplies (continue)

Illustration: For the quarterly return ending Dec 2010

Month Oct NovDec

Exchange gain/(loss) (150) 100 (200)

• The net realized foreign exchange loss for the quarter is $250

• Interest received from fixed deposit is $400

• You need to report $250 + $400 = $650 in Box 3

Box 4: Total value of Box (1) + Box (2) + Box (3) 

The value in this box will be automatically computed after you have filled in the amounts in Box 1, Box 2 and Box 3.

6. e-Filing GST Returns and Correcting Mistakes

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Box 5: Total value of taxable purchases 

The amount to report in Box 5 is the value of purchases and imports where the GST incurred can be claimed, and zero-rated purchases. This value should exclude the GST amount.  

Example: If you buy or import goods for $100 with $7 of GST, you should include $100 in Box 5.

6. e-Filing GST Returns and Correcting Mistakes

What to include

• Standard-rated purchases• Imports• Zero-rated purchases from GST-registered suppliers (e.g. purchase of air

tickets, international freight charges, international call charges)• Business purchases made before your date of GST registration which

satisfy pre-registration input tax claim conditions (in first GST F5 only)

What to deduct

• Reduction in the value of taxable purchases for which a credit note has been received or a debit note has been issued

• Value of taxable purchases corresponding to repayment of input tax

What to exclude

• Wages and salaries• Expenses where input tax is specifically disallowed

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Box 6: Output tax due In general, the amount to report in Box 6 is the GST charged on your standard-rated supplies. 

Example: If you sell goods for $100 with $7 of GST, you should include the $7 of GST in Box 6.

6. e-Filing GST Returns and Correcting Mistakes

What to include

• GST charged on the items included in Box 1• GST on debts that are recovered after you have claimed for your bad

debt relief• Claim of a refund made to a tourist if it was previously allowed to you and

you are no longer entitled to it

What to deduct

• Reduction in GST to be accounted for where a credit note has been issued or a debit note received

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Box 7: Input tax and refunds claimed In general, the amount to report in Box 7 is the GST incurred on your business purchases, and other GST refunds to claim. Example: If you buy or import goods for $100 with $7 of GST, you should include $7 in Box 7.

6. e-Filing GST Returns and Correcting Mistakes

What to include

• GST incurred on the standard-rated purchases included in Box 5• GST incurred on imports included in Box 5 • Tourist refunds made to your customers (Applicable to businesses that

operate the Tourist Refund Scheme only)• Bad debt relief claim in which all the bad debt relief claim conditions can

be satisfied• Input tax claim for business purchases made before your date of GST

registration which satisfy pre-registration input tax claim conditions (in first GST F5 only)

What to deduct

• Reduction in GST to be claimed where a credit note has been received or a debit note issued

• Repayment of input tax claimed from IRAS but not paid to your supplier

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Box 8: Net GST to be paid to/claimed from IRAS 

The value in this box will be automatically computed after you have filled in the amounts in Box 6 and Box 7. Box 9: Total value of goods imported under this scheme 

This box is only applicable to businesses under the:• Major Exporter Scheme; or • Approved Third Party Logistics Company Scheme; or • Other Approved Schemes

  Box 10: Did you claim for GST you had refunded to tourists?  

If you have claimed any GST refunds made to tourist under the Tourist Refund Scheme in Box 7 (Input tax and refunds claimed), please indicate ‘Yes’ and state the amount claimed in this box.

Box 11: Did you make any bad debt relief claims?  

If you have made bad debt relief claims in Box 7 (Input tax and refunds claimed), please indicate ‘Yes’ and state the amount that you have claimed in this box.

6. e-Filing GST Returns and Correcting Mistakes

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Box 12: Did you make any pre-registration claims?  This box is applicable to your first GST return only and will not be available in your subsequent GST returns. If you have made pre-registration input tax claims in Box 7 (Input tax and refunds claimed), please indicate ‘Yes’ and state the amount that you have claimed in this box.  Box 13: Revenue  In general, ‘revenue’ refers to income derived from your main income sources such as from the provision of services, sale of goods and any other operating income (i.e. gross sales/ gross income/ turnover). This value should be extracted from the revenue items (e.g. sales) in your profit & loss accounts, whether they have been audited or not.  As this value is based on your accounting treatment, it may be different from the amount declared in Box 4 which is your total supplies based on GST requirements.

6. e-Filing GST Returns and Correcting Mistakes

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Important Things to Note on e-Filing

Due Dates for Submission of GST Return and GST Payment

• Filing and payment due date is 1 month after the end of each prescribed accounting period (E.g. due date for GST F5 return covering 1 Jan12 - 31 Mar 12 is 30 Apr 12)

• Penalties will be imposed for late submission of return and payment of tax

• Payment can be made via GIRO (deduction will be made on the 15th day of the following month after the filing due date), cheque or AXS. For details, refer to www.iras.gov.sg > Quick links > Payments > GST

• If net GST amount to be paid or claim is < $5, no payment or refund will be made

6. e-Filing GST Returns and Correcting Mistakes

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Important Things to Note on e-Filing

Things to look out for when completing the GST Return

• To drop off cents for Boxes 1 to 5 & 9

• Declare figures in S$, not in foreign currencies

• All boxes must be completed

• If no business is done, a ‘Nil’ return is still required

6. e-Filing GST Returns and Correcting Mistakes

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APPLICATION EXERCISE

ABC company has the following business transactions for one accounting period:

Transaction Value Fill in Box

1) Imports $20,000 5

2) Local sale $50,000 1

3) Local sale of fixed asset $5,500.50 1

4) Local purchase $8,100.40 5

5) Export sales* $50,070.80 2

*Please note that export sales qualify for zero-rating only if all the relevant export documents can be maintained within 60 days from the time of supply. You can refer to the e-Tax Guide “GST: A Guide on Exports” for the relevant documents to be maintained.

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What figures to fill for Box 6 (output tax) and Box 7 (input tax) ?

Transaction Value Fill in Box

GST Value

Box 6 or 7?

1) Imports $20,000 5 $1,400 7

2) Local sale $50,000 1 $3,500 6

3) Local sale of fixed asset $5,500.50 1 $385.04 6

4) Local purchase $8,100.40 5 $567.03 7

5) Export sales $50,070.80 2 $0 NA

APPLICATION EXERCISE

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55,500

50,070

0

105,570

28,100

3,885.04

1,967.03

1,918.01

APPLICATION EXERCISE

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Correcting Mistakes in GST Return

•Mistakes made in your GST F5/F7/F8 return submitted can be corrected by filing a GST F7 “Disclosure of errors on GST return”•To fill in the total revised figures inclusive of error adjustments (i.e. treat the GST F7 as a new GST return for the accounting period)•GST F7 filed will supersede the F5/F7/F8 that was submitted previously for the same accounting period

6. e-Filing GST Returns and Correcting Mistakes

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Correcting Mistakes in GST Return

•GST F7 can be requested and submitted electronically via myTax Portal.

•For detailed instructions on requesting for GST F7, you may refer to the “GST e-Filing User Guide”.

•As a concession, you may correct the errors in your next GST F5 return, subject to certain conditions as shown in the following flowchart.

6. e-Filing GST Returns and Correcting Mistakes

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ERRORS

Do the errors involve GST?

Is the sum of non-GST errors** for each prescribed

accounting period > 5% of total

supplies?

Include the errors in the next GST

F5/F8 return

File F7

YES

NO

NO

NO

YES

YES

6. e-Filing GST Returns and Correcting Mistakes

*GST error refers to a mistake made to the value declared in Box 6 and/or Box 7 of your submitted GST return.

**Non-GST errors refer to all other mistakes made that are not GST errors.

Is the net GST error* for all affected accounting

period(s) > $1,500?

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Scenario Errors Net GST error Adjustments

1. Errors involve GST amount only (value of supplies and purchases are correct)

Qtr 1: Under-declared output GST by $300

Qtr 1: Under-declared input GST by $200

+$300 - $200 = +$100

Net GST error < $1,500; Non-GST error < 5% of total supplies.

Correct mistake in next GST F5/F8 return.

2. Errors do not involve GST amount (GST values are correct)

Qtr 1: Standard-rated supplies over-declared by $200

Qtr 1: Zero-rated supplies under-declared by $10,000

Qtr 1: Taxable purchases under-declared by $500

$200 + $10,000 + $500

= $10,700

$10,700 / $105,570 * 100 = 10.1%

Non-GST errors > 5% of total supplies.

Need to file GST F7.

APPLICATION EXERCISE

1. Increase Box 6 by $300 &

2. Increase Box 7 by $200in next GST F5/F8 return.

You will need torevise all thefigures (as if youare filing for the1st time) in the GST F7 for Qtr1.

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807. Penalties and Recovery Actions

Late Registration

Non/Late Submission of GST Return

Non/Late Payment of Tax

Submission of Incorrect GST Return

Failure to Keep Proper Records

Relevant e-Tax Guides:

“Do I Need to Register?”“How Do I Prepare My GST Return”“Basic Record Keeping Guide for GST-registered Businesses”“Keeping of Records in Imaging Systems”“Keeping Machine-sensible Records and Electronic Invoicing”

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If a business fails to apply for GST registration within 30 days of the date its registration liability arises, the Comptroller has the power to:

•Back-date the GST-registration- Business must account for GST on standard-rated supplies

made from their effective date of GST registration. This is regardless of whether GST can be recovered from its customers

•Impose penalties- 5% late payment penalty will be imposed on the tax that should

have been paid earlier

•On conviction, the following shall be imposed:- 10% penalty on tax due; and - Fine not exceeding $10,000

Late Registration

7. Penalties and Recovery Actions

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Non/Late Submission of GST Return

If a business fails to submit GST return by the due date, the Comptroller can:

•Impose late submission penalty- $200 late submission penalty for every completed month

that GST F5/F8 remains outstanding (not exceeding $10,000 in penalty for each GST F5/F8)

•Raise estimated tax assessment and impose late payment penalty (LPP)

- Tax unpaid 60 days after the imposition of 5% LPP may be subject to an additional 2% penalty for each completed month (not exceeding 50% of tax outstanding)

7. Penalties and Recovery Actions

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Non/Late Submission of GST Return• Raise estimated tax assessment and impose late payment penalty (LPP)

- The estimated tax assessment and LPP will be adjusted upon receipt and finalisation of GST F5/F8.

•On conviction, the following will be imposed:- Person responsible for the submission liable to a fine not

exceeding $5,000 for each offence, and- Imprisonment not exceeding 6 months for non-payment

7. Penalties and Recovery Actions

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Non/Late Payment of Tax

If a business fails to make GST payment by due date, the Comptroller can:

•Impose late payment penalty and issue a demand note- 5% penalty on tax payable; and- Tax unpaid 60 days after the imposition of 5% LPP may be

subject to an additional 2% penalty for each completed month (not exceeding 50% of tax outstanding)

•Appoint agent (e.g. banks, tenants) for payment of tax

•Stop individual from leaving the country

•Take legal action

7. Penalties and Recovery Actions

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Submission of Incorrect GST Return

If a business submits an incorrect GST return, the Comptroller can:

•Raise additional tax assessment- IRAS conducts random audits on GST-registered

businesses

- Additional tax assessment will be raised to recover the taxes under-accounted/over-claimed

•On conviction, the following shall be imposed:- Penalty up to 2 times the amount of tax under-

accounted/over-claimed; and - Fine up to $5,000 and/or imprisonment up to 3 years

7. Penalties and Recovery Actions

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Failure to Keep Proper Records

•On conviction of failure to keep proper records, the following shall be imposed:

- Fine not exceeding $5,000; and/or

- Imprisonment not exceeding 6 months

•Repeated offence: Business will face fine not exceeding $10,000 and/or imprisonment not exceeding 3 years

7. Penalties and Recovery Actions

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APPLICATION EXERCISE

ScenarioLate

submission?Penalty?

Late payment?

Penalty?

a) F5 for 01 Oct 11 – 31 Dec 11 e-filed on 20 Jan 12.Sufficient funds were maintained for a successful GIRO deduction on 15 Feb 12.

No NA NANo

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APPLICATION EXERCISE

ScenariosLate

Submission?Penalty?

Late Payment?

Penalty?

b) F5 for 01 Oct 11 – 31 Dec 11 e-filed on 28 Jan 12 with net tax payable of $1,000 which was paid to IRAS on 01 Apr 12.

c) F5 for 01 Oct 11 – 31 Dec 11 e-filed on 15 Mar 12 with net tax payable of $1,000 which was paid to IRAS on 15 Mar 12.

5% x $1,000+

2% x $1,000+

2% x $1,000

5% x $1,000

Previous penalty on

assessment raised would be

adjusted accordingly

No NA Yes

Yes $200 Yes

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How to Avoid Late Submission Penalty

How to Avoid Late Payment Penalty

How to Ensure Accurate GST Reporting – The Four Building Blocks

GST Assisted Self-help Kit (ASK)

Relevant e-Tax Guides:

“GST: General Guide for Businesses” “How Do I Prepare My GST Return”“Basic Record Keeping Guide for GST-registered Businesses”“Keeping of Records in Imaging Systems”“Keeping Machine-sensible Records and Electronic Invoicing”“IRAS Voluntary Disclosure Programme”

8. Tips on Compliance

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How to Avoid Late Submission Penalty

• Ensure necessary resources are available for prompt filing of GST F5/F8 returns

• Ensure the person authorised for e-filing is able to log-in to myTax Portal much earlier than the due date of filing

• Ensure that the Acknowledgement Page is generated after each submission of GST F5/F7/F8 return online

8. Tips on Compliance

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How to Avoid Late Payment Penalty

• For payment through GIRO, ensure you have sufficient funds in your GIRO bank account by the 15th of the month when payment is to be deducted

• Follow payment instructions on the Acknowledgement page generated with each successful submission of GST return

• Submit your GST returns and pay the tax declared by the due date. If you have not submitted the GST F5/F8 return, pay the tax assessed and submit the return immediately so that tax assessed can be adjusted

8. Tips on Compliance

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How to Ensure Accurate GST Reporting – The 4 Building Blocks

1. People

Authorised staff doing the GST reporting

• Know the e-Filing and GST payment procedures

• Have adequate GST knowledge

• Ensure that GST treatment is correctly applied to transactions and clarify when unsure of GST treatment

• Keep abreast of GST developments by visiting IRAS’ website and attending relevant courses

Management

• Directors/Shareholders to take interest in accuracy of GST reporting

• Engage qualified people for GST reporting or provide adequate training to staff

• Ensure proper handover during staff turnover (e.g. authorise the new staff at EASY to e-File GST returns)

8. Tips on Compliance

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2. Systems

 For a list of accounting software that can produce IAF, please refer to www.iras.gov.sg > Businesses > IRAS Accounting Software Register.

Use of suitable computerised accounting system/ software

• Coded table to classify your sales (type of supply) and purchases (whether claimable) when they are recorded

• In-built logic to detect duplicate records, discrepancies in GST rate and GST value, etc

• Function to generate a GST report to assist you in completing your GST returns

• Function to generate sales and purchases listings in the format of an IRAS Audit File (IAF) and/or softcopy sales and purchases listings in Microsoft Excel file format

8. Tips on Compliance

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3. Record-keeping

To comply with the record-keeping requirements stated under Section 5.

 

Good record-keeping practices

• Set up a good filing system

• Keep clear records with cross-references (e.g. credit notes issued should make reference to the original tax invoice)

• Ensure all transactions are captured accurately and in a timely manner in your accounting system

• Keep all IRAS’ correspondences (e.g. Approval for GST registrations and schemes, updates on GST changes, GST clarifications sought from IRAS etc.)

8. Tips on Compliance

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4. Internal Controls

Good internal control

• Claiming input tax only upon receipt of tax invoice to avoid double claiming

• Ability to track all creation, amendment and approval of transactions

• GST return to undergo second level of review before submission

• Regular reviews to assess the accuracy of submitted GST returns

8. Tips on Compliance

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GST Assisted Self-help Kit (ASK)• ASK is a self-assessment package designed to help you enhance your GST

compliance• You can learn more about ASK at www.iras.gov.sg > For GST-registered

Businesses > GST Initiatives to Facilitate Voluntary Compliance > GST Assisted Self-help Kit (ASK)

GOOD GST COMPLIANCE

GST Practices

Pre-Filing Checklist

ASK Annual Review

SECTION 1 SECTION 2 SECTION 3GST Practices list down the essential requirements and good practices that you can include in the internal processes of your business.

Pre-Filing Checklist is a set of questions and answers for you to go through before you file your GST return, so that you can avoid errors.

ASK Annual Review guides you to do a self-review of your GST returns filed in the past financial year(s).

8. Tips on Compliance

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Voluntary disclosure of errors attracts lower penalties!

For a start, you can go through “List of Common Errors made by GST-Registered Businesses”

enclosed in this seminar package and the GST Assisted Self-help Kit

8. Tips on Compliance

For more information, refer to www.iras.gov.sg > About IRAS > Taxpayer Compliance > IRAS Voluntary Disclosure Program

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Notifying Changes to Business

Cancelling GST Registration

Relevant e-Tax Guide:

“Do I Need to Register?”“GST: General Guide for Businesses” “Transfer of Business as a Going Concern”

9. Notifying of Changes to Business and Cancelling GST Registration

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Notifying Changes to Business

Changes to Business Action Required

Change in business details (E.g. business name, address or GST GIRO bank account number)

Write in (post/fax/email) with supporting documents (e.g. ACRA Business Profile) to inform IRAS within 30 days of change.

Cessation of business • GST registration will not be automatically cancelled upon cessation of business

• To apply for cancellation of GST registration within 30 days of business cessation by submitting form GST F9 (Application for Cancellation of GST)

9. Notifying of Changes to Business and Cancelling GST Registration

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Changes to Business Action Required

Change in business constitution or ownership

•Transfer of business from one person to another (E.g. convert from sole-proprietorship to private limited company)

•Transferor: previous business constitution/owner

•Transferee: new business constitution/owner

Transferor

To apply for cancellation of GST registration within 30 days of the date of transfer by submitting GST F9 if transferor ceases to make taxable supplies after the transfer.

Transferee

•Assess if business is liable to be GST-registered

•Submit GST F1 (Application for GST Registration) and the latest ACRA Business Profile within 30 days of the date of transfer should taxable turnover exceed S$1 million

9. Notifying of Changes to Business and Cancelling GST Registration

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Cancelling GST Registration•Other than cessation of business, you may cancel your GST registration if your business turnover is below the compulsory registration threshold

•To notify the Comptroller by submitting GST F9 (Application for cancellation of GST)

•Once application is approved, you will be notified of the effective date of de-registration and will be required to submit a GST F8 (Final GST return)

•To account for output tax if value of assets on hand including stock, fixed assets and non-residential properties (for which input tax has been allowed previously) exceeds $10,000

9. Notifying of Changes to Business and Cancelling GST Registration

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- IRAS website (www.iras.gov.sg)

- Email enquiries (www.iras.gov.sg > Contact Info > Email Us)

- Fax enquiries (6351 3553)

- Letter enquiries (The Comptroller of Goods and Services TaxInland Revenue Authority of Singapore55 Newton Road Revenue House Singapore 307987)

- GST helpline (1800 356 8633)

-Counter service at Revenue House(Monday to Friday only: From 8am to 5pm)

10. Where To Get Help

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10. Where To Get Help

www.iras.gov.sg > GST e-Tax Guides

“Ask IRAS”

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24 Hours, 7 days a week

1. View Return StatusCheck the status (e.g. if GST return is successfully submitted to IRAS) of GST F5, F7 and F8

2. Update contact details and subscribe to Alert View or update your contact information online, such as your GST mailing address and to subscribe to GST alerts.

3. View Correspondence/ NoticesRetrieval of Acknowledgement page

4. View Account Summary/ PaymentsView tax account details; Request statement of accounts; View payment plan schedules; Make payment via internet banking; Request payment voucher to make payment via other payment modes

5. Apply for GST Registration/ Cancellation of GST Registration

6. Apply for Declaration of Agents Maintain list of authorised declaring agents for businesses approved under Major Exporter Scheme (MES)/Third Party Logistics Company Scheme (3PL)

Log onto myTax portal @https://mytax.iras.gov.sg

for all these and more ...

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iSPRINT (Packaged Solutions)

With effect from 1 Apr 2012, all businesses (GST-registered and non-GST-registered) can apply to IDA for a grant under IDA’s iSPRINT (Packaged Solutions) scheme to defray the costs of purchasing accounting software that are listed on IRAS’ Accounting Software Register.

Businesses can claim up to 50% of the qualifying costs for the purchase of the first packaged solution (listed) under each solution category. Formore details on the list of packaged solutions, please refer to IDAwebsite.

Please note that businesses must obtain IDA's grant approval before purchase can be made.

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Who is eligible?

How Do I Qualify?• You are a local SME with minimum 30% local shareholding and

• You do not already own/ use any other solutions that you are going to adopt (i.e. accounting, payroll or POS solution) and

• Company's Group annual sales turnover not more than S$100 million or

• Company's Group employment size not more than 200 workers.

For more details on the scheme, please visit IDA at www.ida.gov.sg.

iSPRINT (Packaged Solutions)

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GST Course by Tax Academy of Singapore

Course Title : Executive Tax Programme Level I (GST)Duration : 3.5 daysCourse fee : $802.50* (before subsidy)

(*IRAS is offering up to 50% subsidy on all the Executive Tax Programmes. )

For more details, visit: www.taxacademy.com.sg or contact Ms Toh Hui Bin Eunice at 6351 3061, [email protected]

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Answers to Application Exercises

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Q & AQ & A