4 Tips to Avoid Common GST Errors

Are you a Singapore business looking to file Goods and Services Tax (GST) returns? If you are not sure how to file GST returns without any mistakes, you are at the right place. In this blog, you will learn about some of the most common GST errors companies make when filing their GST returns.

GST contributes a major portion of tax incomes in Singapore. This is why the Singapore government takes collection of GST returns very seriously. On top of that, the government imposes strict penalties for companies that make GST filing errors. Also read the penalties involved for late submission of GST returns.

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Tip 1: Valid Documents to Submit in Support of Your Tax Claims

Read the conditions and make sure you are eligible to make input tax claims. Additionally, support the claim with valid and relevant supporting documents. You may have to make alterations to your returns and notify Singapore customs if any of your imported items were over-declared or under-declared.

💡 Know the GST on customer accounting for prescribed goods.

Tip 2: Know When Your Input Tax can be Apportioned

GST-registered companies that provide exempt supplies such as financial services, residential properties sales and lease, etc. must have the extent of exempt supplies as suggested by the De Minimis Rule. You may claim input tax as usual if the De Minimis Rule is satisfied. Otherwise, you cannot claim input tax attributable to the production of exempt supplies.

❓ Do you need to register GST for your business in Singapore? Find out here: Sole-Proprietorship | Company

When filing input tax that cannot be considered as directly attributable to either exempt or taxable supplies, the tax amount that you can claim must be apportioned accordingly.

Tip 3: Do Not Claim Disallowed Input Tax

Regulations 26 and 27 of GST Regulations do not allow business to claim the below expenditures as Input Tax:

Benefits offered to the family members and relative of company staff
Running expenses and cost induced on vehicles that are registered under either business name or an individual, or hired for business or private use.
Subscription fee payments made to different sports and recreation clubs
Medical expenses for the staff unless mandated under Work Injury Compensation Act
Any promotional deals including lotteries, sweepstakes, betting, fruit machines, or games of chance

Tip 4: Claim Input Tax at the Right Time

Make your input tax claim in a period that matches the required date. That is, it should be submitted on the accounting date that corresponds to the period stated in the tax invoice or import permit. Businesses often make GST errors unintentionally.