Bill to amend Goods and Services Tax Act passed
28 November 2019
On 4 November 2019, the Goods and Services Tax (Amendment) Bill (“Bill”) was passed. This Bill seeks to amend the Goods and Services Tax Act for purposes including the following:
- Improve goods and services tax (“GST”) administration in relation to imported services: The Overseas Vendor Registration regime will be refined to allow GST group registration for overseas suppliers, as well as allow local electronic marketplace operators to account for GST on both business-to-business (“B2B”) and business-to-consumer (“B2C”) supplies of digital services, on behalf of their underlying suppliers. Changes will also be made to clarify the scope of the Reverse Charge mechanism. It applies to all businesses that are GST-registered or liable for GST registration, and are not allowed input tax claims in full. These changes ensure parity between local and overseas purchases.
- Introduce offences for misrepresentation of information: It will be an offence for a customer to provide false information in relation to purchases of imported services where such information may be used by overseas suppliers to determine whether GST is applicable. This measure is required for the Inland Revenue Authority of Singapore (“IRAS”) to enforce GST on imported services effectively as suppliers under the Overseas Vendor Registration regime operate overseas and rely on information provided by customers to determine if GST is applicable.
- Update GST treatment of digital payment tokens (also commonly known as cryptocurrencies): IRAS will exempt from GST the supply of digital payment tokens that are in exchange for fiat currency or other digital payment tokens. IRAS will also exempt from GST the loan of digital payment tokens. The changes also seek to not subject the supply of digital payment tokens to GST when they are used as a means of payment for goods and services. Hence, whether digital payment tokens or fiat currency are used to purchase goods and services, GST is chargeable only on the supply of goods and services, and not on the digital payment token itself.
- Make changes to the reporting of proceedings and decisions of tax cases by the High Court and Court of Appeal: To align with the principle of open justice and in keeping with international trends, tax proceedings in the High Court and Court of Appeal will no longer be heard in private by default. Similar changes will be made to the Income Tax Act. The changes relating to court proceedings, under the Goods and Services Tax Act and the Income Tax Act, will take effect on 1 January 2020.
- Introduce definitions of “accountant” and “advocate and solicitor” for purposes of appeals to the GST Board of Review: With this amendment, only a “public accountant” within the meaning of the Accountants Act, or an “advocate and solicitor” within the meaning of the Legal Profession Act, will be allowed to represent a taxpayer before the GST Board of Review. This is to ensure representatives handling taxpayers’ appeals to the Board meet certain professional qualifications.
The following reference materials are available from the Ministry of Finance website www.mof.gov.sg and the Singapore Parliament website www.parliament.gov.sg:
- Goods and Services Tax (Amendment) Bill
- Second Reading Speech by Lawrence Wong, Second Minister for Finance and Minister for National Development