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:

  1. taxable for GST purpose; and
  2. 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:    

  1. receipts from business activities taxable exceeded or is expected to exceed S$1 million; or
  2. 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 ma-chine 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

For more information, get in touch with our GST professionals:

Richard Ong
Partner & Head of Goods & Services Tax