It is common that not-for-profit organisations (“NPO”) in Singapore tend to evaluate, determine, and tag their GST registration requirement/non-requirement to their IPC status. As a representative of an NPO, if your thought process is along this line, the salient points below will help you have a clearer picture so that your analysis can be calibrated to align with local GST legislation.
Based on our partnership with NPOs in a similar context, we understand that these are common (but not exhaustive) channels which NPOs receive considerations to fund their proposed mission and vision:
- Outright donation
- Grant
- Sponsorship
- Government subvention
- Investment income (e.g. shares, bonds, properties)
- Rental income
- Programme fee (subsidised rate)
Current GST registration guidelines and determining factors do not differentiate an NPO from a business that operates for profit. It is, therefore, essential to analyse, determine, and segregate the above-mentioned categories of funding and income received into:
- taxable for GST purpose; and
- not taxable for GST purpose.
Tagging to the above, funding and income classified under category (1) need to be evaluated in totality for a period of 12 months (with calendar year as focal point) to see whether:
- receipts from business activities taxable exceeded or is expected to exceed S$1 million; or
- services procured from overseas vendors (i.e. imported services) exceeded or is expected to exceed S$1 million.
To help you with your GST registration analysis and assessment, we summarised and debunked common myths in the table below:
|
Myth |
Fact |
Fall in GST registration basket? |
|
|
1 |
Solicited donations and fund-raising income from coupons/tickets sold for events, such as charity dinner and musical event, are wholly not subject to GST. |
Considering the proposed benefits conferred to the donor(s) in return for something of value (e.g. goods and services on the day of the charity event), such solicited donations and fund-raising income might be taxable for GST purpose. |
Yes |
|
2 |
Sale of donated goods or handicrafts (e.g. books, figurines, flowers, handicrafts, etc.) or services provided (e.g. advertisement, etc.) generally are not subject to GST. |
Sale of goods and provision of services in return for consideration (no matter the value) are taxable for GST purpose. |
Yes |
|
3 |
Considering we have IPC status and are tax-exempt, nominal fees received for services provided fee (e.g. nursing home services, kidney dialysis, TCM medical services) similarly does not attract GST. |
Provision of services in return for a fee (even if it’s nominal) are taxable supplies for GST purpose. IPC status does not mirror that one can be exempted from GST registration. |
Yes |
|
4
|
As an NPO and not a business aiming for profit, my sundry Income/miscellaneous Income/other Income (e.g. training room rental, office, vending machine rental, granting of a right to operate carpark) are not considered as for business purpose and hence are not subject to GST. |
From GST’s perspective, sale of goods and/or provision of services in return for a fee/consideration are taxable. |
Yes |
Besides the above information that helps with your GST registration analysis, there might be scenarios and areas specific to your situation(s) where our GST specialists are glad to assist you:
|
Richard Ong, Partner & Head |
Huang Yanlin, Director |
|
|
|
|
Lee Meow Ling, Senior Manager Accredited Tax Advisor (GST) |