Claiming input tax in Singapore
GST was implemented in countries to eliminate repetitive taxes that are paid multiple time, both on the time of their purchase and sales, by the taxpayers. The facility of ‘Input Credit claim’ was provided by the government of many countries, including Singapore, to claim back their money.
Conditions To Claim Input Tax In Singapore
1. Have invoice in Singapore Dollars:
In order to claim the input credit, your invoice must be in Singapore Dollars (SGD). Invoice in any other currency will not help you grant any claim.
2. Have words as a tax invoice:
Tax invoices are documents that a seller provides to its customer including all the taxes. Under the GST Act, a seller is bound to create and give invoices that carry all the necessary information, to its customers. Having detailed invoice records will help you with all the necessary data you will need for claiming a return.
3. Have GST rates:
In Singapore, the GST is charged at the rate of 7. All the invoices must be covered with the charge of GST and its conditions. Providing valid tax invoices must be addressed to the customers. The business should also receive tax invoices from all its suppliers.
4. Have total account payable:
All the due goods and services, that have been received but yet to be paid cannot be claimed under the return conditions. So, you are bind to maintain all the account payable records and disclose them at the time of claiming returns.
5. Have customer names and addresses:
In order to claim input tax return, all your supplier must be GST compliant and should already pay the taxes you paid to them while making purchases, to get your returns. Then, in that case, you need to have maintained all the records of your suppliers as well as the customers.
Things where you cannot claim input tax
Section 26 and 27 chalks out certain provisions for non-claimable input taxes that incur in a business. The rules are laid out by the Inland Revenue Authority of Singapore(IRAS). It exempts the Singapore companies and its owners from claiming the following deduction. These expenses are not considered for deductions as they do not actively participate in business processes.
1. Cost For Running Car:
The expenditure on purchasing any private car that is used for personal or even for business purpose is non-claimable. Moreover, expenses incurred in maintaining and repairing, servicing and its overhead charges like petrol and driver’s salary is also exempted.
2. Injury Compensation:
Injury compensation is provided by the company to the employees who are met with an accident or any kind of occupational disease while on work. The employee can claim their medical expenses. The business can claim input tax on work injury compensation given, but up to some extent only.
3. Benefits Provided To Any Staff Family Member:
Medical expenses and insurance, education, accommodation, these kinds of benefits are non-refundable under input tax claim. These kinds of expenses are allotted a certain amount of money. Also, the expenses incurring on the staff like salaries, bonuses, increment are non-refundable.
4. Club Fees:
Joining clubs are great. It improves your social reputation. However, GST is not going to motivate you to do clubs. You will need to spend from your own pocket if you want to enrol in them. GST will not return any kind of expense you incur whether be it for registration or collection or charity.
5. Transactions Including Betting:
Any kind of transaction earned by chance is not be entertained under the input claims returns. Betting, lotteries, these kinds of income are not, in any form, related to the business neither they are directly benefiting nor making any loss the business. Moreover, claims can only be generated through GST invoices. So, there is no chance that you will get any kind of claim by losing in a bet.