Singapore

GST pain points for shipping

Goods and Services Tax (GST) in Singapore is a transaction-based tax applicable to the supply and purchase of goods and services. Considering the voluminous transactions, varying shipping arrangements, counterparties involved and continuously evolving business climate, GST-registered shipping businesses (GSBs) that manage GST risk on a broad level could face a mismatch in expectations against that of the GST authorities.

It is important for GSBs to manage GST risks and shield themselves from sizeable GST errors and consequent penalties that could potentially impact their free cash flow position. GSBs should therefore consider the common GST issues in their industry as follows:

  1. Tagging rebills to customers appropriately as reimbursement (subject to GST) or disbursement (not subject to GST);
  2. Ability to track imports on ship owners’ behalf and subsequent movement on board vessels that travel internationally;
  3. Identifying the value of their supplies for GST reporting purposes (e.g. commission or full cost);
  4. Deemed supplies (e.g. gifts of goods to customers and / or employees) not considered for GST reporting;
  5. Exempt supplies (e.g. realised foreign exchange gain / loss from purchase and sales transaction, hedging activities) excluded from GST reporting;
  6. Incorrect GST claims on vendor’s invoice(s) to ship owners and vessels;
  7. Not tracking accounts payable aging report for payments due to GST-registered vendors exceeding 12 months; and
  8. Documents maintained for petty cash expenses with GST not meeting IRAS requirements.

 

YOUR GST COMPLIANCE PARTNER
By tapping into our in-house GST Analytics, the GST Assisted Self-help Kit (ASK) and GST Assisted Compliance Assurance Programme (ACAP) initiatives, we assess GSBs’ GST compliance frameworks and shed light on gaps that may lead to penalties. We help businesses to take advantage of the Voluntary Disclosure Programme (VDP), allowing them to disclose incorrect classifications confidently with lower or no penalties. Our team of GST professionals also offers advisory and compliance support to minimise GST risks.

For more information, contact our team of GST professionals:

Richard Ong, Partner & Head, GST Services
Accredited Tax Advisor (GST), SIATP
T +65 6594 7821 
richardong@RSMSingapore.sg

Huang Yanlin, Director
Accredited Tax Advisor (GST), SIATP
T +65 6715 1142
huangyanlin@RSMSingapore.sg

Lee Meow Ling, Senior Manager
Accredited Tax Advisor (GST), SIATP
T +65 6715 1143
leemeowling@RSMSingapore.sg