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Singapore GST Compliance Common Errors

2026-01-21
Inland Revenue Authority of Singapore (IRAS) released key common GST compliance errors.

  1. SALE AND DISPOSAL OF BUSINESS ASSETS

    Generally, a GST-registered business is required to account for output tax based on the consideration it receives when selling its business assets (including disposal of or transfer of asset to another party with consideration received). The business must account for GST at the earliest of the following events:  
    (1)
    		 When it issues the invoice;  
    (2)
    		 When it receives the payment;
    (3)
    		 For the sale of land or immovable property only when title of the property is transferred upon legal completion/made available to the buyer for occupation

    Similarly, the GST-registered business is also required to account for output tax when it disposes of, transfers or gives away its business assets for free and these assets still have market value, unless the cost of the asset is not more than $200 or no credit for input tax was allowed on the purchase/import of the assets. When assets are disposed of for free, the business must account for GST on the date when it disposes of, transfers, or gives away the assets.

    In practice, businesses often overlook their GST compliance requirements and fail to account for output tax when they sell, dispose of, transfer or give away their business assets. Even if the business remembers to account for output tax, it may sometimes overlook the correct taxing point and account for GST late.

  2. INPUT TAX CLAIMS ON PURCHASES NOT FOR OWN BUSINESS PURPOSES

    Another common error is claiming input tax on purchases not made for business purposes or not attributable to the making of taxable supplies.  

    Consider the following example, where Company B’s related entity made some purchases from a GST-registered supplier, but the tax invoice is addressed to Company B. As the purchase was not contractually made by Company B and not attributable to Company B’s taxable supplies, Company B cannot claim the input tax even though the tax invoice was addressed to it. At the same time, Company B’s related entity cannot claim the input tax as well due to the lack of a valid tax invoice. Consequently, Company B should request for the supplier to reissue the tax invoice to its related entity.

  3. BUSINESSES MAKING LOW-VALUE GST REFUND CLAIMS

    Recent GST audits by IRAS on businesses with low-value GST refund claims have highlighted several common errors. Businesses should avoid the following errors:  

    (1)
    		 Claiming input tax despite not making any taxable supplies.
    (2)
    		 Claiming input tax without holding valid tax invoices or import permits.
    (3)
    		 Claiming input tax on disallowed expenses (such as motor car expenses and medical expenses)
    (4)
    		 Claiming input tax on personal expenses
    (5)
    		 Having insufficient documentation to support zero-rated export transactions.

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

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