IRAS | Sale and Disposal of Business Assets

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You must account for GST (i.e. output tax) when you sell or dispose of, transfer or give away business assets with market value, unless exceptions apply. Business assets include old furniture, office equipment, and non-residential property.

When you sell assets for a consideration

When you sell, dispose of, or transfer a business asset to another party for a consideration (e.g. money), you must charge and account for output tax based on the consideration received.

Company A sells its old photocopying machine to Company B. Company A must charge GST on the sale of the machine, and account for the output tax based on the selling price to Company B

When to account for output tax

Account for GST on the earliest of these dates:

When you issue the invoice
When you receive payment
When you deliver or hand over the business asset (this applies only to non-residential property)

When you dispose of assets for free

When you dispose of, transfer or give away assets for free and the assets still have market value, you must account for output tax based on the Open Market Value (OMV).

The OMV of an asset refers to the price (excluding GST) that the asset could fetch if sold to an unrelated party at the time of disposal or transfer.

When you do not need to account for output tax

You do not need to account for output tax when you dispose of assets for free if any of the following applies:

The asset has no market value;

You may treat disposed business assets as having no market value if all of the following conditions are met:

The assets were previously used by the business.
The assets have been written off from the business accounts.
The assets are disposed of by the business and are not given to third parties for further use.
You keep documentary evidence showing that the assets were disposed of and not given away (e.g. a certificate of destruction or disposal issued by licensed waste collectors, or sign-off by an authorised person of the company).

The cost of the asset is $200 or less; or
You did not claim input tax when you purchased or imported the asset.

When to account for output tax

If output tax is applicable, you must account for GST on the date you dispose of, transfer or give away the asset.

A retailer gives clothes from her business inventory to a friend. The clothes were purchased in 2023 at a cost of $300. The open market value (OMV) of the clothes at the time they were given away in 2025 is $400.

If she had claimed input tax on the purchase in 2023 (when the GST rate was 8%), she must account for output tax at the prevailing GST rate of 9% on the OMV of the clothes when they were given away (i.e. 9% × $400 = $36).

However, if she did not claim input tax on the purchase, she is not required to account for output tax.

A carpenter gives dented wood to a recycling centre. As the dented wood is obsolete and has no market value, the carpenter need not account for output tax