Claiming input tax

To support employees who are affected by the COVID-19 pandemic, you may provide accommodation and other types of benefits to your employees during the COVID-19 period. Whether the GST incurred can be claimed depends on the circumstances:

Expense  Can input tax be claimed?
Accommodation, food, transport to and from accommodation to testing facility and thermometers provided to employees who need to serve a Stay-Home Notice (SHN) Employee who returns from a business trip overseas
Yes. Your employee incurred the expense to carry out the employment duties assigned by your company. However, input tax is not claimable if your company has been providing the same accommodation to your employee prior to 1 Feb 2020, unless the accommodation is allowed under the exceptions or administrative concession under paragraph 7 of the e-Tax Guide “GST: Fringe Benefits” (PDF, 485KB).

Employee who returns from a personal trip overseas
No. The expense is primarily incurred for the personal benefit of your employee. The expense need not have been incurred had your employee not travelled overseas for personal reasons.
COVID-19 tests and COVID-19 hospitalisation charges for employees

Input tax incurred on medical expenses is not claimable under Regulation 26 of the GST (General) Regulations, unless the expense is obligatory under the Work Injury Compensation Act (“WICA”).

For example, your employee contracted COVID-19 due to work-related exposure during a business trip overseas. Upon return to Singapore, he is hospitalised and the medical expenses are covered under WICA. Input tax incurred on the medical expenses is claimable.

For COVID-19 tests for employees required to undergo Rostered Routine Testing (“RRT”), the Government will fund the cost of the tests until end 2021.

With effect from 1 Oct 2021, input tax on expenses incurred on the provision of medical treatment is claimable where the medical treatment is provided in connection with any health risk or requirement arising on account of the nature of the work required of your employee or his work environment; and

  1. the medical expenses are incurred pursuant to any written law of Singapore concerning the medical treatment or the provision of a medical facility or medical practitioner; or
  2. the medical treatment is related to COVID-19 and the employee undergoes such medical treatment pursuant to any written advisory (including industry circular) issued by, or posted on the website of, the Government or a public authority.

For example, if your employee goes on a business trip overseas and you pay for his pre-departure COVID-19 swab tests done in Oct 2021, input tax incurred on the medical expenses is claimable. 

Antigen Rapid Test (ART) Self-Test Kits Yes. Self-administered test kits are not considered medical expenses that are disallowed under Regulation 26 of the GST (General) Regulations.
SHN expenses and accommodation provided to Malaysian workers on the Periodic Commuting Arrangement (PCA) scheme

No. The expense is primarily incurred for the personal benefit of your employee. For SHN expenses, the expenses need not have been incurred had your employee not returned to Malaysia for personal reasons.

Accommodation provided to Malaysian workers in light of the Movement Control Order (MCO)

Yes, you can claim the input tax incurred on accommodation provided to your Malaysian workers who normally reside overseas and are required to reside in Singapore to ensure continuity of your business during the MCO period. However, as accommodation expenses are essentially private consumption in nature, IRAS will allow the GST incurred on accommodation provided up to 31 Dec 2021, provided that your workers have remained in Singapore throughout the MCO period.  

Personal protective equipment (e.g. masks, thermometers, hand sanitiser, etc.) to employees Yes. The expense is incurred for the purpose of your business.
Utility bills, telephone bills, monthly subscription fees for mobile phone and monthly subscription fees for broadband incurred while the employee works from home (“WFH”) during the COVID-19 period Input tax is claimable on the business portion of the expense incurred during the COVID-19 period. The supply should be contracted in your employee’s name, and not any other person living in the same household.

Utilities and home telephone bills
If you have difficulties determining the business portion of the expenses, you may take the difference in the amount of expenses your employee incurred before and after working from home and apportion it equally among the working individuals in the same household. For example, if your employee’s utilities bill has increased by $107 (inclusive of $7 GST) and both your employee and another individual in his household work from home, you may claim $3.50 as your input tax.
 
Mobile phone or broadband subscription fees
If the mobile phone subscription or broadband subscription was used for both business and private purposes during the WFH period, you may claim input tax:
(i)     For full reimbursements, based on 4/7 of the GST incurred on the expenses.
(ii)    For partial reimbursements, based on 7/107 of the amount reimbursed or 4/7 of the GST incurred on the expenses, whichever is the lower.
Office equipment for home use (e.g. printer, toner, monitor, chair) to facilitate employees to WFH during the COVID-19 period Your company does not own the office equipment
No, input tax is not claimable. The purchase is primarily incurred for private purposes, as your employee can continue to use the asset at home after the WFH period or sell it off without having to obtain approval from your company.
 
If the company owns the office equipment
Yes, the company may claim the input tax on the purchase.

Exporting of goods

When exporting goods, you have up to 60 days from the time of supply to export the goods and collate the required export documents. Due to the COVID-19 situation, if your exports are delayed due to flight limitations or shipment delays, you are allowed up to 120 days to export the goods and collate the required documents. This extension will also apply to hand-carried exports. 

You do not need to write in for the extension to 120 days, but you must maintain supporting documents to show that the delays arose from the COVID-19 situation (e.g. correspondences with suppliers/ forwarders/ customers which show the delays are due to country lockdowns, lack of flight/ shipment slots, flights/ shipments affected due to COVID-19 cases).

Determining where a company belongs

Business establishment

Where a company is not able to hold its Board of Directors meetings (during which the strategic decisions of the company are made) in Singapore due to the travel restriction relating to COVID-19, IRAS will consider the company as having a business establishment in Singapore if it meets all the following conditions: 

  • The company has a business establishment in Singapore before COVID-19 (e.g. due to regular Board of Directors meetings held here);  
  • The directors of the company have to attend the Board of Directors meeting held outside Singapore or if the meeting is held via electronic means (e.g. via video-conferencing, tele-conferencing, etc.) due to the directors being temporarily restricted in their travel as a consequence of COVID-19; and  
  • There are no other changes to the economic circumstances* of the company.

Conversely, where a company does not have a business establishment in Singapore before COVID-19, IRAS will continue to consider the company as not having a business establishment in Singapore, provided it meets all the following conditions:

  • The company has to hold its Board of Directors meeting in Singapore due to the travel restrictions relating to COVID-19; and
  • There are no other changes to the economic circumstances* of the company.

To support the claim that the company has or does not have a business establishment in Singapore, the company should keep relevant documentations and records (e.g. board minutes stating why the directors were attending board meetings from their respective locations), and to provide the relevant information to IRAS upon request.

For information on how the belonging status of a company is determined, refer to the e-Tax Guide “GST: Guidelines on Determining the Belonging Status of Supplier and Customer”.

Fixed establishment

Where employees of a foreign company are deployed to Singapore (e.g. to work on a construction project) and the employees may have to remain in Singapore due to the effects of COVID-19 including travel restrictions or the project being delayed as a result of the circuit breaker measures introduced, such unplanned presence of the employees will not result in the creation of a fixed establishment in Singapore for the foreign company, provided it meets all the following conditions: 

  • The foreign company does not have a fixed establishment in Singapore before COVID-19;  
  • The unplanned presence of the employees in Singapore is due to the effects of COVID-19 and their physical presence in Singapore up to 31 Dec 2021 is temporary;  
  • The employees will leave Singapore as soon as they are able; and  
  •  There are no other changes to the economic circumstances* of the company. 

To support the claim that there is no fixed establishment in Singapore, the company should keep relevant documentations and records, and to provide the relevant information to IRAS upon request.

The above positions shall not affect how permanent establishment is to be determined for Corporate Income Tax purposes.  

*These include:

  1. The principal activities and business model of the company;
  2. The nature of the business operations and the conduct of the business in Singapore and elsewhere; and
  3. The usual locations in which the operations operates.

For property owners

Please refer to Covid-19 Support Measures for reliefs provided to property owners.