PART V | INPUT TAX AND PARTIAL EXEMPTION |
| Definitions and longer periods |
25.—(1) In this Part —| “business trust” has the same meaning as in section 2 of Business Trusts Act 2004; [S 620/2022 wef 31/12/2021] |
“chauffeured private hire car” means a motor car that —| (a) | does not ply for hire on any road; | | (b) | is hired, or made available for hire, under a contract (express or implied) for use as a whole with a driver for the purpose of conveying the hirer, and one or more passengers (if any), in that car; and | | (c) | in respect of which a licence is issued under Part 5 of the Road Traffic Act 1961 for its use as a chauffeured private hire car; [S 963/2022 wef 01/01/2023] |
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“chauffeur service” means —| (a) | the carriage of one or more passengers; or | | (b) | the collection, conveyance and delivery, for reward, of any cargo not incidental to the carriage of any passenger in a chauffeured private hire car, and any goods, article, food or baggage which is unaccompanied by any passenger travelling in the chauffeured private hire car must be treated as cargo, but only if such collection, conveyance and delivery is approved by the Registrar, as defined under section 2(1) of the Road Traffic Act 1961, pursuant to rules made under that Act; [S 963/2022 wef 01/01/2023] |
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| “club subscription fee” means any joining fee, subscription fee, membership fee, transfer fee or other consideration charged by any club, association, society or organisation established principally for recreational or sporting purposes or by the transferor of the membership or such club, association, society or organisation, as the case may be; |
| “COVID-19” means the infectious disease known as Coronavirus Disease 2019; [S 739/2021 wef 01/10/2021] |
| “debt security” and “equity security” have the same meanings as in paragraph 1 of Part 3 of the Fourth Schedule to the Act; [S 495/2012 wef 01/10/2012] [S 620/2022 wef 31/12/2021] |
| “exempt input tax” means input tax, or a proportion of input tax, which is attributable to exempt supplies in accordance with the method used under regulation 29 or approved or directed to be used under regulation 30, as the case may be; |
| “family benefits” means any benefits (including hospitality of any kind) provided by the taxable person for the benefit of any person who is the wife, husband, child or relative of any person employed by the taxable person for the purposes of any business carried on or to be carried on by the taxable person; |
“medical and accident insurance premium” means any payment or contribution towards any of the following insurance contracts: | (a) | a contract for the provision of insurance for indemnifying the taxable person against the cost of medical treatment to any person; | | (b) | a contract for the provision of insurance against the cost of medical treatment in which the insured is any person employed by the taxable person; | | (c) | a contract for the provision of insurance against any personal accident in which the insured is any person employed by the taxable person, |
| but does not include any insurance contract against any liability which the taxable person may incur to any person employed by him — |
| (i) | under the provisions of the Work Injury Compensation Act (Cap. 354) as in force before 1 September 2020 or the Work Injury Compensation Act 2019 where —| (A) | such insurance is obligatory under either of the Acts; or | | (B) | the payment of compensation is obligatory under either of the Acts; or [S 739/2021 wef 01/09/2020] [S 620/2022 wef 31/12/2021] |
| | (ii) | under any collective agreement within the meaning of the Industrial Relations Act 1960; [S 566/2010 wef 01/10/2010] [S 620/2022 wef 31/12/2021] |
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“medical expenses” means any of the following medical expenses incurred in connection with the provision of medical treatment to any person employed by a taxable person:| (a) | expenses incurred in or in connection with the provision of maternity health care, natal care, and preventive and therapeutic treatment; | | (b) | expenses incurred in or in connection with the provision of any medical facility by the taxable person, |
| but does not include any of the following: |
| (c) | expenses incurred under the provisions of the Work Injury Compensation Act as in force before 1 September 2020 or the Work Injury Compensation Act 2019 to any workman employed by the taxable person where such expenses are obligatory under either of the Acts or any collective agreement within the meaning of the Industrial Relations Act 1960; [S 620/2022 wef 31/12/2021] | | (d) | expenses incurred in or in connection with the provision of medical treatment to any person employed by the taxable person, or the provision of any medical facility or medical practitioner, where —| (i) | the person undergoes the medical treatment, or the medical facility or medical practitioner is provided, pursuant to or in connection with any written law concerning the medical treatment or the provision of the medical facility or medical practitioner, as the case may be; and | | (ii) | the Comptroller is satisfied that the medical treatment is required, or the medical facility or medical practitioner is provided, on account of the nature of the person’s work or work environment; |
| | (e) | expenses incurred in or in connection with the provision of medical treatment to any person employed by the taxable person, where —| (i) | the medical treatment relates to COVID‑19; | | (ii) | the person undergoes such medical treatment pursuant to or in connection with any written advisory (including any industry circular) issued by, or posted on a website of, the Government or a public authority; and | | (iii) | the Comptroller is satisfied that such medical treatment is required on account of the nature of the person’s work or work environment; [S 739/2021 wef 01/10/2021] |
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| “medical facility” means any premises set aside for use as a facility at which any medical treatment is available or may be provided; [S 739/2021 wef 01/10/2021] |
| “medical treatment” includes all forms of treatment for, and procedures for diagnosing or preventing, any physical or mental ailment, infirmity or defect; [S 739/2021 wef 01/10/2021] |
“motor car” means a motor car which is constructed or adapted for the carriage of not more than 7 passengers exclusive of the driver and the weight of which unladen does not exceed 3,000 kilograms but does not include —| (a) | a motor car registered before 1st April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act 1961; [S 620/2022 wef 31/12/2021] | | (b) | a taxi; | | (c) | a motor car registered as a private car (school transport); | | (d) | an unused motor car which has not been previously registered under the Road Traffic Act 1961 supplied or imported for the purpose of being let on hire or sold; [S 620/2022 wef 31/12/2021] | | (e) | a motor car supplied to a financial institution for the purposes of making a supply of that motor car by the financial institution under a hire purchase contract; | | (f) | a motor car supplied to or imported by a taxable person for the purposes of being let on hire or sold by that taxable person who is a dealer of motor cars; [S 672/2022 wef 31/08/2022] | | (fa) | a used motor car supplied or imported for the purpose of being let on hire; and [S 672/2022 wef 31/08/2022] | | (g) | a motor car used for instructional purposes for reward and registered under paragraph 9(1) of the Second Schedule to the Road Traffic (Motor Vehicles, Registration and Licensing) Rules (R 5) by a person who holds a driving school licence issued under the Road Traffic Act 1961; [S 620/2022 wef 31/12/2021] |
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| “public authority” means a body established or constituted by or under a public Act to perform or discharge a public function; [S 739/2021 wef 01/10/2021] |
| “real estate investment trust” has the same meaning as in section 43(10) of the Income Tax Act 1947; [S 620/2022 wef 31/12/2021] |
| “registration period”, in relation to a taxable person, means the period commencing on his effective date of registration determined in accordance with the First Schedule to the Act and ending on the day before the commencement of his first tax year; |
| “relative” means brother, sister, ancestor or linear descendant; |
“special purpose vehicle” means —| (a) | in relation to a real estate investment trust, a trust that is established solely in order for its trustee to hold, directly or indirectly, any immovable property or immovable property-related asset in which the real estate investment trust invests or proposes to invest; or | | (b) | in relation to a business trust, a trust that is established solely in order for its trustee to hold, directly or indirectly, any property (or part thereof) in respect of which the business trust is established; |
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“tax year”, in relation to a taxable person, means —| (a) | the first period of 12 calendar months commencing on the 1st day of April, May or June, according to the prescribed accounting periods allocated to him, next following his effective date of registration determined in accordance with the First Schedule to the Act; or | | (b) | any subsequent period of 12 calendar months commencing on the day following the end of his first, or any subsequent, tax year, |
| except that the Comptroller may approve or direct that a tax year shall be a period of other than 12 calendar months or that it shall commence on a date other than that determined in accordance with sub-paragraph (a) or (b); |
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| “unit” has the same meaning as in paragraph 1 of Part 3 of the Fourth Schedule to the Act. [S 495/2012 wef 01/10/2012] [S 620/2022 wef 31/12/2021] |
| (2) Any reference to goods or services shall be construed as including a reference to anything which is supplied by way of a supply of goods or a supply of services, respectively. |
(3) For the purposes of the definitions of “family benefits”, “medical and accident insurance premium” and “medical expenses” in paragraph (1) —| (a) | directors and officers of a company; | | (b) | persons engaged in the management of a company; | | (c) | the directors, officers or employees of a related corporation as defined in section 4 of the Companies Act 1967, |
| shall be construed as persons employed by the company. |
[S 620/2022 wef 31/12/2021] |
| (4) Paragraphs (5), (6), (7) and (8) shall be used for determining the longer period applicable to taxable persons under the Act. |
(5) A taxable person who incurs exempt input tax during any tax year shall have applied to him a longer period which shall correspond with that tax year unless he did not incur exempt input tax during his immediately preceding tax year or registration period, in which case his longer period shall —| (a) | begin on the first day of the first prescribed accounting period in which he incurs exempt input tax; and | | (b) | end on the last day of that tax year, except where he only incurs exempt input tax in the last prescribed accounting period of his tax year, in which case no longer period shall be applied to him in respect of that tax year. |
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| (6) A taxable person who incurs exempt input tax during his registration period shall have applied to him a longer period which shall begin on the first day on which he incurs exempt input tax and end on the day before the commencement of his first tax year. |
| (7) In the case of a taxable person ceasing to be taxable during a longer period applicable to him, that longer period shall end on the day when he ceases to be taxable. |
| (8) The Comptroller may approve in the case of a taxable person who incurs exempt input tax, or a class of such persons, that a longer period shall apply which need not correspond with a tax year. |
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| Disallowance of input tax |
26. Input tax incurred by a taxable person in respect of any of the following:| (a) | club subscription fee; | | (b) | medical and accident insurance premium; | | (c) | medical expenses; | | (d) | family benefits; | | (e) | any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance, |
| shall be excluded from any credit under sections 19 and 20 of the Act. |
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| Disallowance of input tax relating to motor car |
27.—(1) Subject to paragraphs (2) to (8), input tax incurred by a taxable person on any of the following is excluded from any credit under sections 19 and 20 of the Act:| (a) | the supply or importation of a motor car; | | (b) | the supply of goods or services to, or importation of goods by, the taxable person directly in connection with a motor car. |
(2) Where —| (a) | input tax is incurred by a taxable person on a supply or importation of a motor car; | | (b) | the motor car is used or to be used by a connected person of the taxable person; | | (c) | the provision of the use of the motor car by the taxable person to the connected person is not ancillary to any other supply made by the taxable person to the connected person; and | | (d) | the connected person has reimbursed the taxable person for a part or the whole of the sum of —| (i) | the value of the supply or importation of the motor car; and | | (ii) | the input tax incurred by the taxable person in respect of that supply or importation, |
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| paragraph (1)(a) does not apply to the amount of input tax that is reimbursed by the connected person. |
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(3) Paragraph (1)(a) does not apply to any input tax incurred by a taxable person on a supply or importation of a chauffeured private hire car, if —| (a) | the taxable person uses or intends to use the chauffeured private hire car to provide any chauffeur service in the course of a business of providing any chauffeur service carried on by the taxable person; and | | (b) | where the taxable person is an individual — the taxable person also satisfies all the following conditions:| (i) | the taxable person is a sole proprietor of a sole proprietorship that is registered under the Business Names Registration Act 2014 to carry on a business of providing any chauffeur service; | | (ii) | the taxable person maintains a fleet of at least 3 chauffeured private hire cars; | | (iii) | where —| (A) | the taxable person personally provides any chauffeur service using any of the chauffeured private hire cars mentioned in sub‑paragraph (ii) — the taxable person employs at least 2 other individuals to provide any chauffeur service using any of those chauffeured private hire cars; or | | (B) | the taxable person does not personally provide any chauffeur service using any of the chauffeured private hire cars mentioned in sub‑paragraph (ii) — the individual employs at least 3 other individuals to provide any chauffeur service using any of those chauffeured private hire cars. |
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| (4) Paragraph (1)(b) does not apply to any supply of goods or services to, or importation of goods by, an insurer directly in connection with a motor car of a person who contracted with the insurer for the insurance cover on that motor car, where the insurance cover commences on or after 1 January 2007. |
(5) Where —| (a) | an amount of input tax is incurred by a taxable person on a supply of goods or services to, or importation of goods by, the taxable person directly in connection with a motor car; | | (b) | the goods or services that are supplied or imported are used by a connected person of the taxable person; | | (c) | the provision of the use of the goods or services that are supplied to, or imported by, the taxable person to the connected person is not ancillary to any other supply made by the taxable person to the connected person; and | | (d) | the connected person has reimbursed the taxable person for a part or the whole of the sum of —| (i) | the value of the supply of the goods or services or importation of goods; and | | (ii) | the input tax incurred on the value of that supply or importation, |
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| paragraph (1)(b) does not apply to the amount of input tax that is reimbursed by the connected person. |
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| (6) Paragraph (1)(b) does not apply to any input tax incurred by a taxable person on a supply of goods or services to, or importation of goods by, the taxable person directly in connection with a chauffeured private hire car, if the taxable person uses or intends to use the chauffeured private hire car to provide any chauffeur service in the course of a business of providing any chauffeur service carried on by the taxable person. |
| (7) Paragraph (1)(b) does not apply to any input tax incurred by a taxable person (X) on a supply of any chauffeur service that is provided to X by another taxable person (Y) using a chauffeured private hire car, if Y carries on a business of providing any chauffeur service. |
| (8) In this regulation, a person (A) is a connected person of another person (B) if A is determined to be connected to B in accordance with paragraph 3, read with paragraph 4, of the Third Schedule to the Act. [S 963/2022 wef 01/01/2023] |
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28. Where in any prescribed accounting period or in any longer period, the total value of all exempt supplies made by a taxable person does not exceed both —| (a) | the average of $40,000 per month; and | | (b) | an amount equal to 5% of the total value of all non-specified taxable supplies and exempt supplies made in that period, [S 875/2019 wef 01/01/2020] |
| then all exempt input tax in that period shall be treated as attributable to taxable supplies. |
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| Attribution of input tax to taxable supplies |
29.—(1) Subject to regulation 30, the amount of input tax which a taxable person shall be entitled to deduct provisionally shall be that amount which is attributable to taxable supplies in accordance with this regulation.(2) In respect of each prescribed accounting period —| (a) | goods imported by and goods or services supplied to the taxable person in the period shall be identified; | | (b) | there shall be attributed to taxable supplies the whole of the input tax on such of those goods or services as are used or to be used by him exclusively in making non-specified taxable supplies; [S 875/2019 wef 01/01/2020] | | (c) | no part of the input tax on such of those goods or services as are used or to be used by him exclusively in making exempt supplies, or in carrying on any activity other than the making of non-specified taxable supplies, shall be attributed to taxable supplies; and [S 875/2019 wef 01/01/2020] | | (d) | | (i) | subject to sub-paragraph (ii), there shall be attributed to taxable supplies such proportion of the input tax on such of those goods or services as are used or to be used by him in making both non-specified taxable supplies and exempt supplies as bears the same ratio to the total of such input tax as the value of non-specified taxable supplies made by him bears to the value of all supplies (other than specified supplies) made by him in the period; and [S 875/2019 wef 01/01/2020] | | (ii) | where input tax is incurred on goods or services in the development of land and construction of a building as is used or to be used by him in making both taxable and exempt supplies, there shall be attributed to taxable supplies such proportion of the input tax as bears the same ratio determined in accordance with the formula: |
| | is the floor area of the part of that building under development or construction for which the competent authority under the Planning Act 1998 has granted provisional or written planning permission for a purpose other than a residential purpose; |
| | | is the fixed rate for the time being specified in Part 1 of the Second Schedule to the Land Betterment Charge (Table of Rates and Valuation Method) Regulations 2022 (G.N. No. S 569/2022) corresponding to the appropriate geographical sector of the building and the use group within which such purpose falls; |
| | | is the floor area of the part of that building under development or construction for which the competent authority under the Planning Act 1998 has granted provisional or written planning permission for residential purposes; |
| | | is the rate for use group B1 or B2 for the time being specified in Part 1 of the Second Schedule to the Land Betterment Charge (Table of Rates and Valuation Method) Regulations 2022, corresponding to the purpose of the building under development or construction. |
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[S 620/2022 wef 31/12/2021] [S 620/2022 wef 01/08/2022] |
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| (3) In calculating the proportion under paragraph (2)(d), there shall be excluded any sum receivable by the taxable person in respect of any exempt supply referred to in paragraph 1 of Part 1 of the Fourth Schedule to the Act that is made by him, where such supply is incidental to one or more of his business activities. [S 495/2012 wef 01/10/2012] [S 620/2022 wef 31/12/2021] |
| (3A) In calculating the proportion under paragraph (2)(d), there must be excluded from the taxable supplies made by the taxable person mentioned in that provision, any prescribed supply or relevant supply of goods or services that the taxable person is required under section 38 or 38A of the Act to account for and pay tax on as customer. [S 895/2018 wef 01/01/2019] |
| (4) The ratio calculated for the purpose of paragraph (2)(d) shall be expressed as a percentage and, if that percentage is not a whole number, it shall be rounded off to the nearest whole number. |
| (5) For the purpose of this regulation, “appropriate geographical sector” and “floor area” have the same meanings as in the Land Betterment Charge (Table of Rates and Valuation Method) Regulations 2022. [S 620/2022 wef 01/08/2022] |
| (6) Where the development of land or construction of building involves more than one use group specified in the First Schedule to the Land Betterment Charge (Table of Rates and Valuation Method) Regulations 2022, the Comptroller may determine the method for the application of the formula referred to in paragraph (2)(d)(ii) to the appropriate use group. [S 620/2022 wef 01/08/2022] |
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30.—(1) The Comptroller may approve or direct the use by a taxable person of a method other than that specified in regulation 29.| (2) The Comptroller may in special circumstances approve or direct the use by a taxable person of a method, other than that specified in regulation 29, which may treat supplies made by that taxable person to another taxable person for the purpose of any business carried on by the last-mentioned taxable person as taxable supplies; but the Comptroller may if he thinks it necessary for the protection of the revenue refuse to allow the use of such method. |
| (3) A taxable person using a method as approved or directed by the Comptroller under paragraph (1) or (2) shall continue to use that method unless the Comptroller approves or directs the termination of its use. |
| (4) Any approval or direction under paragraph (1) or (2) shall take effect from the date upon which the Comptroller gives such approval or direction or from such date as he may specify. |
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| Attribution of input tax to foreign and bonded warehouse supplies |
31.—(1) Input tax incurred by a taxable person in any prescribed accounting period on importations by or supplies to him which are used or to be used by him in whole or in part in making —| (a) | supplies outside Singapore which would be taxable supplies if made in Singapore; | | (b) | supplies referred to in regulation 1(b) or (g) of Part 1 of the Fourth Schedule to the Act outside Singapore; or [S 495/2012 wef 01/10/2012] [S 620/2022 wef 31/12/2021] | | (c) | supplies which are to be disregarded under section 37 of the Act for the purposes of the Act and which would otherwise be taxable supplies, |
| may be attributed to taxable supplies to the extent that the importations or supplies are separately identified as so used or to be used. |
| (2) Every taxable person shall keep such documents in such form as the Comptroller may require for the purposes of supporting any attribution of input tax to taxable supplies under this regulation. |
| (3) Nothing in this regulation shall be construed as treating the supplies referred to in paragraph (1)(a) to (c) as taxable supplies for the purposes of these Regulations. |
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| Attribution of input tax on self-supplies |
| 32. Where under or by virtue of any provision of the Act a person makes a supply to himself, the input tax on that supply shall not be allowable as attributable to that supply. |
| Treatment of input tax attributable to exempt supplies as being attributable to taxable supplies |
33. Subject to regulations 34, 35 and 46A, there shall be treated as attributable to taxable supplies any exempt input tax attributable to supplies of any of the following descriptions:| (a) | the deposit of money; | | (b) | the exchange of currency (whether effected by the exchange of currency, bank notes or coin, by crediting or debiting accounts, or otherwise) other than the supply of a note or a coin as a collector’s item, investment article or item of numismatic interest; | | (c) | the issue, allotment or transfer of ownership of a debt security by the person who makes the first issue of such security; | | (d) | the issue, allotment or transfer of ownership of an equity security by the person who makes the first issue of such security; | | (e) | the provision by a taxable person of any loan, advance or credit to his employee; | | (f) | the assignment of a trade receivable; | | (g) | the issue of a unit under any unit trust or business trust; [S 674/2008 wef 01/01/2009] | | (h) | the hedging of any interest rate risk that arises or is likely to arise from —| (i) | the making of any supply specified in paragraph (a) or (c); or | | (ii) | any loan obtained by a taxable person in the making of any supply specified in section 20(2) of the Act; |
| | (ha) | the hedging of any currency risk that arises or is likely to arise from —| (i) | the making of any supply specified in paragraph (a), (c), (d) or (g) or section 20(2) of the Act; or | | (ii) | any loan obtained by a taxable person in the making of any supply specified in section 20(2) of the Act; |
| | (hb) | the hedging of any utility price risk, freight price risk or commodity price risk that arises or is likely to arise from the making of any supply specified in section 20(2) of the Act; | | (i) | the receipt of interest on a bond by a bondholder, arising from the provision of credit by the bondholder to the issuer of the bond (whether or not the bond was originally issued to the bondholder); | | (j) | the receipt of interest in respect of the provision of credit for any trade receivable; | | (k) | the issue or transfer of ownership of Islamic debt securities under an Islamic debt securities arrangement; [S 566/2010 wef 01/10/2010] | | (l) | the provision of financing under an Islamic debt securities arrangement for which the provider of the financing derives an effective return. [S 566/2010 wef 01/10/2010] [S 495/2012 wef 01/10/2012] |
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| Non-applicability to certain businesses |
34. Regulation 33 shall not apply where the supply is made by the taxable person in the course of carrying on a business of, or a business similar to, any of the following:| (a) | a bank required to be licensed under the Banking Act 1970; [S 620/2022 wef 31/12/2021] | | (b) | a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970; [S 474/2021 wef 01/07/2021] [S 620/2022 wef 31/12/2021] | | (ba) | a financial institution required to be approved under section 28 of the Monetary Authority of Singapore Act 1970 as in force immediately before 28 April 2023 or under section 4 of the Financial Services and Markets Act 2022; [S 474/2021 wef 01/07/2021] [S 620/2022 wef 31/12/2021] [S 212/2023 wef 28/04/2023] | | (c) | a company or society required to be registered under the Insurance Act 1966 for the carrying on of a life insurance business, a general or life reinsurance business, or the business of a reinsurance broker; [S 620/2022 wef 31/12/2021] | | (d) | a finance company required to be licensed under the Finance Companies Act 1967; [S 620/2022 wef 31/12/2021] | | (e) | a moneylender required to be licensed under the Moneylenders Act 2008 or a currency trader; [S 875/2019 wef 28/01/2020] [S 620/2022 wef 31/12/2021] | | (ea) | a person required to be licensed under the Payment Services Act 2019 to carry on a business of providing either or both of the following payment services:| (i) | cross-border money transfer service; | | (ii) | money-changing service; [S 875/2019 wef 28/01/2020] [S 620/2022 wef 31/12/2021] |
| | (f) | a pawnbroker as defined under the Pawnbrokers Act 2015; [S 161/2015 wef 01/04/2015] [S 620/2022 wef 31/12/2021] | | (g) | a debt factor; | | (h) | a credit card, charge card or other payment card company; | | (i) | a unit trust, not being a real estate investment trust (or its special purpose vehicle) or a business trust (or its special purpose vehicle); [S 875/2019 wef 01/01/2020] | | (j) | a trader of digital payment tokens. [S 875/2019 wef 01/01/2020] |
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| Non-applicability where other exempt supplies are made |
| 35. Regulation 33 shall not apply where the total value of all exempt supplies (excluding supplies of the descriptions specified in that regulation) made by the taxable person during any prescribed accounting period, or any longer period applicable to him, exceeds 5% of the total value of all non-specified taxable supplies and exempt supplies made by the taxable person during that period. [S 875/2019 wef 01/01/2020] |
| Adjustment of attribution |
36.—(1) Where a taxable person to whom a longer period is applicable has provisionally attributed an amount of input tax to taxable supplies in accordance with a method, and where all his exempt input tax in that longer period cannot be treated as attributable to taxable supplies under regulation 28 and except as the Comptroller may dispense with the following requirements to adjust, he shall —| (a) | determine for the longer period the amount of input tax which is attributable to taxable supplies (other than specified supplies) according to the method used in the prescribed accounting periods; [S 875/2019 wef 01/01/2020] | | (b) | ascertain whether there has been, overall, an over-deduction or an under-deduction of input tax, having regard to the determination mentioned in sub-paragraph (a) and to the sum of the amounts of input tax, if any, which were deducted in the returns for the prescribed accounting periods; and | | (c) | include any such amount of over-deduction or under-deduction in a return for the first prescribed accounting period next following the longer period, except where the Comptroller allows another return to be used for this purpose. |
(2) Where a taxable person to whom a longer period is applicable has provisionally attributed an amount of input tax to taxable supplies in accordance with a method, and where all his exempt input tax in that longer period can be treated as attributable to taxable supplies under regulation 28, he shall —| (a) | calculate the difference between the total amount of his input tax for that longer period and the sum of the amounts of input tax deducted in the returns for the prescribed accounting periods; and | | (b) | include any such amount of under-deduction in a return for the first prescribed accounting period next following the longer period, except where the Comptroller allows another return to be used for this purpose. |
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| Adjustment of input tax deducted |
37.—(1) This regulation applies where a taxable person has deducted an amount of input tax which has been attributed to taxable supplies because the taxable person intended to use the goods or services in making either —| (a) | non-specified taxable supplies; or | | (b) | both non-specified taxable supplies and exempt supplies, |
| and during the relevant period and before that intention is fulfilled, the taxable person uses or forms an intention to use the goods or services concerned — |
| (c) | in making exempt supplies or both non-specified taxable supplies and exempt supplies, instead of non-specified taxable supplies only; | | (d) | in making exempt supplies, instead of both non-specified taxable supplies and exempt supplies; or | | (e) | in continuing to make both non-specified taxable supplies and exempt supplies, but reducing the proportion of non-specified taxable supplies to exempt supplies. [S 875/2019 wef 01/01/2020] |
| (2) Except as the Comptroller otherwise allows, where this regulation applies, the taxable person shall on the return for the prescribed accounting period in which the use occurs or the intention is formed, as the case may be, account of an amount equal to the input tax which has ceased to be attributable to taxable supplies, in accordance with the method which he was required to use when the input tax was first attributed, and he shall repay the said amount to the Comptroller. |
| (3) For the purposes of this regulation, any question as to the nature of any supply shall be determined in accordance with the provisions of the Act and any regulations or orders made thereunder in force at the time when the input tax was first attributed. |
(4) Subject to paragraph (5), paragraph (2) does not apply where the input tax deducted in respect of a supply of land made to a taxable person has ceased to be attributable to a taxable supply of land which the taxable person intended to make, because the taxable person uses or forms an intention to use the land for making —| (a) | both taxable supplies, and exempt supplies referred to in paragraph 2(c) of Part 1 of the Fourth Schedule to the Act; or [S 620/2022 wef 31/12/2021] | | (b) | such exempt supplies. [S 709/2015 wef 18/11/2015] |
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| (5) Where any land is supplied to a taxable person with any building thereon which is used or to be used for making exempt supplies, the taxable person shall, for the purposes of paragraph (2), repay to the Comptroller input tax in respect of only the building in accordance with such method as the Comptroller may determine. |
(6) In this regulation, “relevant period” means —| (a) | where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends before 1st January 2007, a period of 6 years commencing on the first day of that prescribed accounting period; or | | (b) | where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends on or after 1st January 2007, a period of 5 years commencing on the first day of that prescribed accounting period. |
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| Adjustment of input tax deemed deducted |
38.—(1) This regulation applies to a transferee mentioned in section 34A of the Act where the assets transferred to the transferee are to be used in carrying on the same kind of business as that carried on by the transferor of the assets in making either —| (a) | non-specified taxable supplies; or | | (b) | both non-specified taxable supplies and exempt supplies, |
| and during the relevant period, the transferee uses or forms an intention to use the assets — |
| (c) | in making exempt supplies or both non-specified taxable supplies and exempt supplies, instead of non-specified taxable supplies only; | | (d) | in making exempt supplies, instead of both non-specified taxable supplies and exempt supplies; or | | (e) | in continuing to make both non-specified taxable supplies and exempt supplies, but reducing the proportion of non-specified taxable supplies to exempt supplies. [S 875/2019 wef 01/01/2020] |
| (2) Except as the Comptroller otherwise allows, where this regulation applies, the transferee shall on the return for the prescribed accounting period in which the use occurs or the intention is formed, as the case may be, account of an amount of the input tax deemed to have been deducted in respect of the supplies which have ceased or are intended to cease to be non-specified taxable supplies, in accordance with such method as the Comptroller may determine, and he shall repay the said amount to the Comptroller. [S 875/2019 wef 01/01/2020] |
| (3) For the purposes of this regulation, any question as to the nature of any supply shall be determined in accordance with the provisions of the Act and any regulations or orders made thereunder in force at the time the input tax was deemed to have been deducted. |
(4) Subject to paragraph (5), paragraph (2) does not apply where the input tax was deemed to have been deducted in respect of land supplied to the transferee which is no longer to be used to make a taxable supply of land, because the transferee uses or forms an intention to use the land for making —| (a) | both taxable supplies, and exempt supplies referred to in paragraph 2(c) of Part 1 of the Fourth Schedule to the Act; or [S 620/2022 wef 31/12/2021] | | (b) | such exempt supplies. [S 709/2015 wef 18/11/2015] |
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| (5) Where any land is supplied to the transferee with any building thereon which is used or to be used for making exempt supplies, the transferee shall, for the purposes of paragraph (2), repay to the Comptroller input tax deemed to have been deducted in respect of only the building in accordance with such method as the Comptroller may determine. |
(6) In this regulation, “relevant period” means —| (a) | where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends before 1st January 2007, a period of 6 years commencing on the day the supply was made; or | | (b) | where the prescribed accounting period during which the supply referred to in paragraph (1) was made ends on or after 1st January 2007, a period of 5 years commencing on the day the supply was made. |
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| Adjustment of input tax incurred |
39.—(1) This regulation applies where a taxable person has incurred an amount of input tax which has not been attributed to taxable supplies because the taxable person intended to use the goods or services in making either —| (a) | exempt supplies; or | | (b) | both non-specified taxable supplies and exempt supplies, |
| and during the relevant period and before that intention is fulfilled, he uses or forms an intention to use the goods or services concerned — |
| (c) | in making non-specified taxable supplies or both non-specified taxable supplies and exempt supplies, instead of exempt supplies only; | | (d) | in making non-specified taxable supplies, instead of both non-specified taxable supplies and exempt supplies; or | | (e) | in continuing to make both non-specified taxable supplies and exempt supplies, but increasing the proportion of non-specified taxable supplies to exempt supplies. [S 875/2019 wef 01/01/2020] |
| (2) Where this regulation applies, the Comptroller shall, on receipt of an application made by the taxable person in such form and manner and containing such particulars as he may direct, pay to him an amount equal to the input tax which has become attributable to taxable supplies in accordance with the method he was required to use when the input tax was first attributed. |
| (3) For the purposes of this regulation, any question as to the nature of any supply shall be determined in accordance with the provisions of the Act and any regulations or orders made thereunder in force at the time when the input tax was first attributed. |
(4) In this regulation, “relevant period” means —| (a) | where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends before 1st January 2007, a period of 6 years commencing on the first day of that prescribed accounting period; or | | (b) | where the prescribed accounting period during which the attribution of input tax referred to in paragraph (1) was determined ends on or after 1st January 2007, a period of 5 years commencing on the first day of that prescribed accounting period. |
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| Exceptional claims for tax relief |
40.—(1) Subject to paragraphs (2), (2A), (2B), (2E), (2F) and (4), on a claim made in accordance with paragraph (3), the Comptroller may authorise a taxable person to treat as if it were input tax —| (a) | tax on the supply of goods or services to the taxable person before the date with effect from which he was, or was required to be registered, or paid by him on imported goods before that date, for the purpose of a business which either was carried on or was to be carried on by him at the time of such supply or payment; and | | (b) | in the case of a body corporate, tax on the supply or importation of goods acquired for it before its incorporation, or on the supply of services before that time for its benefit or in connection with its incorporation, provided that the person (X) to whom the supply was made or who paid tax on the importation —| (i) | became a member, officer or employee of the body and was reimbursed, or has received an undertaking to be reimbursed by the body for the whole amount of the price paid for the goods or services; | | (ii) | was not at the time of supply or importation a taxable person; and | | (iii) | acquired the goods or services for the purpose of a business to be carried on by the body and has not used them for any purpose other than such business. [S 1003/2021 wef 01/01/2022] [S 1003/2021 wef 01/01/2022] |
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(2) Subject to paragraphs (2A) and (2D), where, 6 months or less before the registration date of the taxable person mentioned in paragraph (1) —| (a) | a supply of goods mentioned in paragraph (1)(a) was made to the taxable person or a supply of goods mentioned in paragraph (1)(b) was made to X (as the case may be) (called in this regulation the relevant person); or | | (b) | tax was paid by the relevant person on imported goods mentioned in paragraph (1)(a) or (b), |
| then the tax on the supply or the tax paid on the imported goods (as the case may be) must not be treated as input tax under paragraph (1) to the extent that, before the registration date — |
| (c) | the relevant person made a supply of the goods to any other person as follows:| (i) | a supply (not being one in sub-paragraph (iii)) by way of the transfer or disposal of the whole property in any of the goods (whether by gift, sale or otherwise); | | (ii) | a supply (not being one in sub-paragraph (iii)) by way of the transfer of possession of any of the goods under —| (A) | an agreement for the sale of the goods; or | | (B) | an agreement that expressly contemplates that property in the goods will pass at some time in the future that is determined by or ascertainable from the agreement, but in any case not later than when the goods are fully paid for; |
| | (iii) | where the supply to the relevant person was a grant, an assignment or a surrender of any interest in any land (other than the grant of a tenancy or lease) — a grant, an assignment or a surrender of any part of the interest in the land (other than the grant of a tenancy or lease); or |
| | (d) | except as the Comptroller may otherwise allow, the goods were consumed or used by the relevant person. [S 1003/2021 wef 01/01/2022] |
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(2A) Where —| (a) | the goods supplied or imported by the relevant person under paragraph (2) comprised utilities; or | | (b) | the supply of goods to the relevant person under paragraph (2) was a grant of a tenancy or lease, or a licence to occupy any land, |
| then the tax on the supply or the tax paid on the import (as the case may be) must not be treated as input tax under paragraph (1) to the extent that, before the registration date — |
| (c) | the relevant person used the goods to make a supply of goods or services to any other person; | | (d) | the goods formed any part of the overheads of the relevant person, and the consideration for the goods was paid by a person other than the relevant person (whether directly to the person who supplied the goods to the relevant person or indirectly through the relevant person); or | | (e) | without affecting the application of sub-paragraphs (c) and (d) to this case, where the supply to the relevant person was a grant of a tenancy or lease, or a licence to occupy any land — the premises to which the grant or licence relates was not used as premises from or at which the relevant person carried on the business to be carried on by the taxable person. [S 1003/2021 wef 01/01/2022] |
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(2B) Subject to paragraphs (2C) and (2D), where, more than 6 months before the registration date of the taxable person mentioned in paragraph (1) —| (a) | a supply of goods mentioned in paragraph (1)(a) or (b) was made to the relevant person; or | | (b) | tax was paid by the relevant person on imported goods mentioned in that provision, |
| then the tax on the supply or the tax paid on the imported goods (as the case may be) must not be treated as input tax under paragraph (1) — |
| (c) | to the extent that, before the registration date, the relevant person made a supply of those goods to any other person; | | (d) | where the supply to the relevant person was a grant of a tenancy or lease, or a licence to occupy any land — in respect of the period of the grant or licence ending immediately before the registration date; or | | (e) | to the extent that, before the registration date, the goods were consumed or used by the relevant person. [S 1003/2021 wef 01/01/2022] |
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| (2C) However, the Comptroller may allow tax in relation to any part of the period in paragraph (2B)(d), or any of the goods consumed or used as described in paragraph (2B)(e), to be treated as input tax under paragraph (1). [S 1003/2021 wef 01/01/2022] |
(2D) For the purposes of paragraphs (2) and (2B), where, before the registration date, the goods supplied to or imported by the relevant person were —| (a) | incorporated with or affixed to other goods; or | | (b) | used to make other goods, |
| then the references to the goods that were supplied by the relevant person to any other person are references to such other goods. |
[S 1003/2021 wef 01/01/2022] |
(2E) Where, 6 months or less before the registration date of the taxable person mentioned in paragraph (1), services mentioned in paragraph (1)(a) or (b) were supplied to the relevant person, the tax on the supply must not be treated as input tax under paragraph (1) to the extent that, before the registration date —| (a) | in a case where the services supplied to the relevant person form any part of the overheads of the relevant person — the consideration for the supply was paid by a person other than the relevant person (whether directly to the person who supplied the services to the relevant person or indirectly through the relevant person); and | | (b) | in any other case — the relevant person used the services to make a supply of goods or services to any other person. [S 1003/2021 wef 01/01/2022] |
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| (2F) Where, more than 6 months before the registration date of the taxable person mentioned in paragraph (1), services mentioned in paragraph (1)(a) or (b) were supplied to the relevant person, the tax on the supply must not be treated as input tax under paragraph (1). [S 1003/2021 wef 01/01/2022] |
| (3) A claim under paragraph (1) shall, except as the Comptroller may otherwise allow, be made on the first return the taxable person furnishes under regulation 52 and, as the Comptroller may require, be supported by invoices and other evidence. |
(4) A taxable person making a claim under paragraph (1) shall compile and preserve for such period as the Comptroller may require —| (a) | in respect of goods, a stock account showing separately quantities purchased, quantities used in the making of other goods, date of purchase and date and manner of subsequent disposals of both such quantities; and | | (b) | in respect of services, a list showing their description, date of purchase and date of use, if any. [S 1003/2021 wef 01/01/2022] |
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| (5) If a person who has been, but is no longer, a taxable person makes a claim in such manner and supported by such evidence as the Comptroller may require, the Comptroller may pay to that person the amount of any tax on the supply of services to him after the date with effect from which he ceased to be registered or ceased to be required to register and which was attributable to any non-specified taxable supply made by him in the course or furtherance of any business carried on by him when he was or was required to be registered. [S 875/2019 wef 01/01/2020] |
(6) In this regulation —| “grant of a tenancy or lease” means the grant of a tenancy or lease where the whole or part of the consideration for that grant is payable periodically and attributed to separate periods of the term of the tenancy or lease; |
| “registration date”, in relation to a taxable person, means the date with effect from which the person is a registered person; |
| “utilities” means any form of power (including electricity), gas, water, light, heat, refrigeration, air conditioning or ventilation. [S 1003/2021 wef 01/01/2022] |
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| Input tax for land to be used for making exempt supplies |
41.—(1) Where any land, being —| (a) | vacant land; or | | (b) | land on which any building is to be demolished, |
| is supplied to a taxable person, and it appears to the Comptroller that — |
| (i) | the land is to be developed (including by the construction of any building thereon); and | | (ii) | some part or the whole of the land so developed is to be used in the making of exempt supplies, |
| the Comptroller may allow to be attributable to taxable supplies such part of the input tax incurred by the taxable person in respect of the supply to him of the land as bears the same proportion to the whole of that input tax as the value of the area of the developed land to be used in the making of exempt supplies bears to the value of the total area of the developed land. |
| (2) Where any land is supplied to a taxable person with any building thereon which is used or to be used for making exempt supplies, the Comptroller may allow the input tax in respect of only the supply of land excluding the building to be attributable to taxable supplies in accordance with such method as the Comptroller may determine. |
| (3) Every taxable person shall keep such documents in such form as the Comptroller may require for the purposes of supporting any attribution of input tax to taxable supplies under this regulation. |
| (4) In this regulation, “exempt supplies” means the exempt supplies referred to in paragraph 2 of Part 1 of the Fourth Schedule to the Act (read with paragraph 3(3) of Part 3 of that Schedule). [S 495/2012 wef 01/10/2012] [S 620/2022 wef 31/12/2021] |
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| Input tax deemed incurred in relation to insurance cash payments |
41A.—(1) This regulation shall apply where the period of insurance cover under a contract of insurance commences on or after 1st January 2007.| (2) Subject to paragraph (3), where the premium payable under the contract of insurance is subject to the tax rate in force under section 16 of the Act, the insurer shall be deemed to have incurred input tax on any cash payment made by him upon the occurrence of an insured event and which is obligatory under that contract of insurance (referred to in this regulation as deemed input tax), except in such situation as the Minister may decide otherwise for the protection of revenue. |
(3) Paragraph (2) shall only apply where the contract of insurance is taken out by a person who, at the time the insurance cover commences under that contract —| (a) | is not registered under the First Schedule to the Act, or is a taxable (Seventh Schedule) person other than a registered (Seventh Schedule — full) person; [S 895/2018 wef 01/01/2019] | | (b) | is a sole proprietor who is registered under the First Schedule to the Act and who purchased the insurance cover other than in the course or furtherance of his business; | | (c) | where the contract is for medical and accident insurance, is registered under the First Schedule to the Act and is disallowed under regulation 26 from claiming any credit under sections 19 and 20 of the Act on any input tax incurred on the premium paid on that contract; or | | (d) | where the contract is for motor car insurance, is registered under the First Schedule to the Act and is disallowed under regulation 27 from claiming any credit under sections 19 and 20 of the Act on any input tax incurred on the premium paid on that contract. |
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(4) Where an insurer incurs deemed input tax under paragraph (2) —| (a) | the cash payment made by the insurer to which the deemed input tax relates shall not be treated as consideration for any supply made to the insurer; | | (b) | the amount of deemed input tax shall be an amount equal to the relevant tax fraction of the cash payment; and | | (c) | the deemed input tax shall be treated as having been incurred by the insurer in the prescribed accounting period in which the cash payment was made by him. |
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(5) Except as the Comptroller may otherwise allow, an insurer making a claim for the deduction of deemed input tax shall keep a record of that claim consisting of information showing that —| (a) | the period of insurance cover under the contract of insurance commenced on or after 1st January 2007; | | (b) | the premium payable under the contract of insurance was subject to the tax rate in force under section 16 of the Act; | | (c) | the cash payment was made by him upon the occurrence of an insured event; | | (d) | the payment was obligatory under the contract of insurance; and | | (e) | the person who entered into the contract for insurance with him was a person specified in paragraph (3). |
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(6) If an insurer recovers from any person (other than his re-insurer under a re-insurance contract) the cash payment referred to in paragraph (2) or any part thereof —| (a) | the deemed input tax on the cash payment shall be reduced by an amount equal to the relevant tax fraction of the sum recovered in the prescribed accounting period in which the sum was recovered; and | | (b) | where the insurer has claimed and deducted the deemed input tax, he shall account and repay to the Comptroller the amount of the adjustment in the prescribed accounting period referred to in sub-paragraph (a). |
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(7) In this regulation, “relevant tax fraction” means the fraction calculated in accordance with the following formula: | | is the rate of tax applicable to the insurance premium for the period of insurance cover giving rise to the cash payment. |
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