Interest Relating to Bank Deposit / Loan / Trade Debt

You must report interest from bank deposits, loans and trade debts when you file your GST returns whether received from a local or overseas entity.

Interest is Payment for a Supply

You may receive interest from a deposit with banks, from a loan to another company or for overdue trade debts. This interest is payment received in return for a supply of financial service to the bank or the company.

Interest Received from a Local Entity

Interest received from a local entity (e.g. local bank and local company) is payment for an exempt supply of financial service is under the 4th Schedule of GST Act. You do not need to account for GST on the interest received.

The value of the exempt supply should be reported in Box 3 (Total Value of Exempt Supplies) of your GST return.

Interest Received from an Overseas Entity

Interest received from an overseas entity (e.g. an overseas bank or overseas company) is payment for a supply of financial service that qualifies as an international service under Section 21(3) of the GST Act. It is a zero-rated supply (i.e. GST at 0%) instead of an exempt supply.

The value of zero-rated supply should be reported in Box 2 (Total Value of Zero-rated Supplies) of your GST return.

  • How do I declare interest expenses that I paid to others?

    Interest paid to others is not a taxable purchase. Hence, you are not required to report the figure in Box 5 of your GST F5 return.

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