MOF Invites Feedback On Proposed Changes To The Goods And Services Tax (GST) ACT

1. The Ministry of Finance is inviting interested parties to provide feedback on the draft GST (Amendment) Bill 2017 from 12 May to 4 June 2017.

Proposed Amendments

2. The draft GST (Amendment) Bill 2017 provides for six changes to ease business compliance, clarify existing legislation or improve tax administration. The changes are:

a) Extend customer accounting for GST-registered Real Estate Investment Trusts (REITs) and their Special Purpose Vehicles (SPVs) to movable assets bought together with a non-residential property from the same seller. Currently, to ease cash flow, customer accounting applies to a GST-registered supplier’s sale of non-residential property to a REIT or its SPV. It does not apply to movable assets sold together with the non-residential property. A GST-registered supplier who sells a furnished non-residential property to the REIT or its SPV will have to apportion the selling price into the value of the unfurnished property and that of the movable assets. The change will ease business compliance by dispensing with the need for apportionment.

b) Provide for basis to implement an “opt-out” approach for digital tax notices. The wide availability of technology allows taxpayers to receive digital instead of hardcopy tax notices. The use of digital notices gives taxpayers greater convenience, security and timeliness of alert. To enable more taxpayers to benefit from digital channels, the Act will be amended so that taxpayers who wish to continue receiving hardcopies can opt out while others will receive digital tax notices. (The current provisions of the Act require taxpayers to provide specific consent before the Comptroller can issue them with digital tax notices instead of hardcopy notices.) Taxpayers will have the flexibility to manage their preference for hardcopy or e-copy at any time.

c) Provide for the GST treatment for the sale of Government land with existing buildings to be demolished to follow the approved use of the land, rather than the approved use of the building. Currently, when Government land is sold with an existing building to be demolished, the GST treatment on whether the supply is exempt or taxable depends on the approved use of the building, which might not reflect the approved use of the land. The change will provide more consistency in tax treatment for this category. In addition, reference to the land zone “Rural Centre and Settlement” is removed as the land zone is no longer in use.

d) Extend customer accounting to prescribed supplies commonly used in fraud schemes. Under customer accounting, GST-registered sellers will not charge GST on the sale of prescribed supplies to GST-registered customers. Instead, their GST-registered customers will be required to account to the Comptroller of GST for the GST chargeable. This will deter fraud schemes where the seller absconds with the GST collected, and businesses further along the supply chain continue to claim input tax. Customer accounting will be applicable for supplies of mobile phones, memory cards and off-the-shelf software, which are commonly used in fraud schemes. These supplies will be prescribed in subsidiary legislation.

e) Provide for electronic record keeping requirements and additional requirement for invoice details for selected businesses. The change is intended for strengthening tax administration, and will assist the Comptroller in verifying that GST transactions are properly accounted for.

f) Provide for the monthly penalty of $200 for late submission of GST returns to commence immediately after the filing due date. Currently, a monthly penalty of $200 is imposed on outstanding returns starting from one month after the filing due date. The change will help to deter the late filing of tax returns.

Consultation Details

3. The public can access the detailed consultation documents for the draft GST (Amendment) Bill 2017 on the Ministry of Finance's website (www.mof.gov.sg) and the REACH consultation portal (www.reach.gov.sg).

4. Written comments can be submitted to:

Ministry of Finance

Tax Policy Directorate

100 High Street #10-01

The Treasury

Singapore 179464

Fax: 6337 4134

Email: pc_gstabill@mof.gov.sg (preferred mode)

Issued by Ministry of Finance Singapore
12 May 2017

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Last Updated on February 13, 2017
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