Can i claim GST?

Conditions for Input GST Recovery

To recover input GST from IRAS, all the following conditions must be fulfilled:

1. The business must be GST-registered.

2. Goods or services must be supplied to the business under contract, or goods must be imported by the business.

3. Goods or services should be used or intended for use in the business. Providing fringe benefits to employees qualifies as a business purpose if it meets the "close nexus test" (refer to section 8.3 below).

4. Input tax must be directly related to taxable supplies (standard-rated or zero-rated) or out-of-scope supplies (e.g., third country sales) that would be taxable if made in Singapore. Input tax is not recoverable if it relates to exempt supplies.

5. Imports must be accompanied by import permits that identify the claimant as the importer.

6. Local purchases should be supported by valid tax invoices or simplified tax invoices addressed to the claimant.

7. Input GST should not be blocked under the GST Act (see section 8.2 below).

8. Businesses must take reasonable steps to ensure that the goods and services are not part of a missing trader fraud arrangement, with a conclusion that a reasonable person would reach.

When to Claim Input GST

• Input tax should be claimed in the accounting period that corresponds to the date on the tax invoice or import permit.

• Input tax may also be claimed based on the date when the taxpayer processes the tax invoice or import permit in their accounting system, provided they meet certain requirements.

Blocked Input GST

Input tax for the following items cannot be recovered from IRAS:

(a) Club subscription fees (including transfer fees) charged by recreational or sporting clubs.
(b) Medical and accident insurance premiums incurred for staff, except for:

• Insurance required under the Workmen Injury Act or collective agreements within the Industrial Relations Act.

• Public liability insurance.
  (c) Medical expenses incurred by staff, except for:

• Expenses under the Work Injury Compensation Act or collective agreements within the Industrial Relations Act.

• Medical examinations for candidates as part of pre-employment assessments.
  (d) Benefits provided to an employee’s spouse, child, or relative, e.g., input GST on school fees for employee’s children.
  (e) Costs and running expenses for S-plate cars (commercial vehicles like lorries, vans, or motorcycles are exempt).
  (f) Expenses related to car rentals.

Fringe Benefits

When employers provide fringe benefits to employees, they should consider:

a) Whether the input GST on fringe benefits is recoverable; and
b) Whether output GST needs to be deemed when fringe benefits are given free to employees (refer to paragraph 3.3.1 on deemed supply for fringe benefits).

Input GST for fringe benefits is recoverable if:

a) The benefits are contractually supplied to the employer or if the employees act as agents of the employer; and
b) The benefits are provided for business purposes, meaning they must have a close nexus to business activities, satisfying the "close nexus test."

IRAS typically considers the "close nexus test" met if any of the following six criteria are fulfilled:

1. Necessary for the proper functioning of the business (e.g., protective clothing).

2. Directly supports or enhances business operations (e.g., meals during business meetings).

3. Primarily fosters staff interaction (e.g., company dinners, outings, team-building activities).

4. Encourages employee skill and knowledge enhancement relevant to the business (e.g., training, professional membership fees).

5. Recognizes employees' contributions to the business (e.g., awards for meeting targets, long service).

6. Promotes corporate identity (e.g., uniforms).

Additionally, goods and services must not be provided exclusively to specific individuals such as business owners, sole proprietors, partners, or directors.

Yes, you can claim GST on purchases from overseas sellers on platforms like Amazon, provided certain conditions are met. First, your business must be GST-registered. The goods you purchase should be used or intended for business purposes, and you need to retain valid tax invoices or receipts that show the GST paid. Additionally, ensure that any import duties and GST on the goods are properly accounted for upon entry into Singapore. If the goods are exempt from GST or not used for business purposes, you won't be able to claim the GST. It's important to keep detailed records for your claims.