You may sell goods to your customers and invoice them in a foreign currency (e.g. US dollars).
When your customers make payment in foreign currency and you exchange the foreign currency for Singapore dollars, an exchange gain or loss may arise and it is a supply for GST purpose.
Your prescribed accounting period is from Oct to Dec 2014.
| Realised exchange gain/ (loss) |
---|
Oct 2014 | ($150) |
Nov 2014 | $100 |
Dec 2014 | ($200) |
Net realised foreign exchange loss for the period = ($250)
Absolute value of net realised foreign exchange loss for the period = $250
In addition, you received $400 interest from fixed deposit in December 2014.
Total value of exempt supplies (Box 3) = $250 + $400 = $650
Unrealised Exchange Gains/Losses
Unrealised exchange gains/ losses (e.g. from sales which payment is still outstanding) and translation gains differences (i.e. year-end conversion from foreign currency to local currency for statutory reporting purposes) should be excluded from GST reporting as they do not give rise to any supply.
If it is administratively difficult for you to separately track realised and unrealised exchange gains/losses, you may report the total value of realised and unrealised gains/losses if you fulfil the following conditions:
- Your accounting practices conform to proper accounting and reporting standards; and
- You adopt the same basis of reporting value of exempt supplies from foreign currency and derivative transactions consistently.
Reporting unrealised gains/losses may affect your input tax claims when applying the De Minimis Rule. You are advised to consider the reduction in tracking efforts against the impact on input tax claims.