Implications of GST registration for Joint Ventures
A GST-registered joint venture (JV) should take note of the following GST implications:
- The GST registration number issued to identify the JV will remain unchanged even if there is a change in the member or representative member;
- Any supply by a member to another member in the course of the JV business shall be disregarded for GST purposes;
- Any business carried on by a member in the course of the JV business shall be treated as carried on by the GST-registered JV;
- Any other supply by or to a member in the course of the JV business shall be treated as a supply by or to the GST-registered JV;
- Any tax paid or payable by a member on the importation of any goods for the purpose of the JV business shall be treated as paid or payable by the GST-registered JV and the goods to be treated for the purposes of sections 26 and 45(6) and (6A) as imported by the GST-registered JV;
- All members shall be jointly and severally liable for any tax due from the GST-registered JV; and
- All members are jointly and severally responsible for anything required to be done under the Act by the GST-registered JV. A business that has ceased to be a member of the JV remains liable for any tax due during its period of participation in the JV business.
Responsibilities of a GST-registered Joint Venture
The responsibilities of a GST-registered joint venture (JV) will include, but are not restricted to, the following:
- e-Filing the GST returns and making payments to IRAS by the due dates;
- Charging and accounting GST on all taxable supplies (7% for standard-rated supplies and 0% for zero-rated supplies) made by the JV with effect from the date of GST registration;
- Complying with the invoicing requirements for supplies made by the JV. The GST registration number of the
JV must be quoted on the invoices or receipts issued by the JV. The GST registration numbers of the JV members that are individually GST-registered should not be used;
- A separate book of accounts should be kept for the JV business. The business transactions pertaining to the JV must be separately identifiable from that of the individual members;
- The JV is required to notify the Comptroller in writing of any changes in the membership of the JV; and
- Upon completion of the JV project or dissolution of the JV, the JV will be required to apply for cancellation of GST registration and account for output tax on the assets held on hand, where applicable, including assets transferred to each member of the JV after the JV is dissolved.
The representative member or section 33(1) agent (where all members are not Singapore residents) is responsible for fulfilling the GST obligations of the GST-registered JV for and on behalf of the other members.
Input tax claims of Joint Ventures
A GST-registered joint venture (JV) is treated as a single taxable person for the purpose of claiming input tax. Input tax incurred for the purpose of the JV business should be claimed in the JV's GST return, subject to the input tax claiming conditions.
To support its input tax claims, the JV should have tax invoices and import permits in the name of JV. If input tax claims are made based on tax invoices or import permits in the name of the respective JV members, there must be sufficient controls in place to ensure that the input tax claims are incurred by the JV and there are no duplicate claims made by the members in their own GST returns.
For the purposes of claiming input tax incurred in the making of exempt supplies, the JV must not include supplies made by individual members that are not made in the course of the JV business.