Concession for Claiming GST Incurred
Currently, the Real Estate Investment Trusts and qualifying Registered Business Trusts listed on Singapore Exchange (i.e. S-REITs and qualifying S-RBTs) are granted a concession to claim GST on expenses incurred for their business and their Special Purpose Vehicles (SPVs). This GST concession applies regardless of whether S-REIT or S-RBT is eligible for GST registration.
The qualifying period of the concession is from 17 Feb 2006 to 31 Mar 2020 . Please refer to the e-Tax Guide GST: Concession for REITS and Qualifying Registered Business Trusts Listed in Singapore (PDF, 962KB) for details.
In Budget 2015, the Government announced a further enhancement on the GST concession to allow S-REITs and qualifying S-RBTs to claim GST on expenses incurred to set up SPVs used solely to raise funds for the S-REITs or qualifying S-RBTs, where the SPVs do not hold qualifying assets of the S-REITs or qualifying S-RBTs, directly or indirectly. These S-REITs and qualifying S-RBTs will also be allowed to claim GST on the business expenses of such SPVs. The enhancement is applicable to GST incurred from 1 Apr 2015 to 31 Mar 2020.
The enhanced concession is granted based on an additional condition that the funds raised by these SPVs must be on-lent to the S-REITs or qualifying S-RBTs and be used to finance the business activities of the S-REITs or qualifying S-RBTs, as the case may be. All other details and qualifying criteria outlined in the above e-Tax Guide will continue to apply.
In Budget 2019, the Government announced the extension of the above concession till 31 Dec 2025. All conditions for the concessions remain the same.
GST Registration by Way of Reverse Charge
From 1 Jan 2020, GST will be levied on Business-to-Business imported services by way of reverse charge. A S-REIT and qualifying S-RBT will become liable for GST registration under the reverse charge regime if:
- the total value of its imported services exceeds S$1 million for a 12-month period on retrospective or prospective basis; and
- the S-REIT or qualifying S-RBT is not entitled to full input tax credit even if it is GST-registered.
Once registered, the S-REIT or qualifying S-RBT will be required to report and account for GST on their imported services in the GST returns. For more information on GST registration under the reverse charge regime, you may refer to the e-Tax Guide, "GST: Reverse Charge" (PDF, 947KB).
The scope of reverse charge will be extended to include imported low-value goods (“LVG”) with effect from 1 Jan 2023. Hence, the value of LVG will count towards the registration threshold in determining if a S-REIT or qualifying S-RBT is liable for GST registration from 1 Jan 2023. GST registered S-REITs and qualifying S-RBTs will also be required to report and account for GST on their imported LVG in their GST returns with effect from 1 Jan 2023.
Self-Accounting of GST for Property Purchases
A GST-registered S-REIT or its GST-registered SPV (i.e. the buyer) can self-account the GST payable for the purchase of furnished or unfurnished non-residential properties from another GST-registered person (i.e. the seller).
Consequently, the seller need not charge and account for GST on the property sale. For more information, please refer to GST: Self-Accounting of GST by Listed REITS and their SPVs for Property Purchases (PDF, 533KB).
Reporting of Transaction in the GST Return
The buyer and seller should report the transaction in the prescribed accounting period in which it takes place.
The buyer should:
- Report the price (excluding GST) of the property including the movable assets therein as standard-rated supply and the corresponding GST amount as output tax; and
- Report the price (excluding GST) of the property including the movable assets therein as taxable purchase and the corresponding GST amount as input tax claim, subject to conditions for claiming input tax.
The seller should:
Report the price (excluding GST) of the property including the movable assets as part of the value of the standard-rated supplies.
Does a GST-registered S-REIT or qualifying S-RBT need to include the supplies made by its SPV in its GST return?
No, the GST-registered S-REIT or qualifying S-RBT does not need to include the supplies made by its SPV in its GST return. However, the supplies made by its SPV should be included when applying the apportion formula to compute the amount of input tax claimable.
I sell a non-residential property to a GST-registered S-REIT or its GST-registered SPV (i.e. buyer). The buyer self-accounts for the GST on the property purchase. Do I need to issue a tax invoice for the sale?
Yes, you need to issue a tax invoice to the buyer for the sale.
It must include a clause to the effect that the output tax shown on the invoice is payable to the Comptroller of GST by the buyer of the property (e.g. "The buyer will account for S$XXX output tax on this supply of property (and movable assets)").
You should issue tax invoices according to the Sale & Purchase agreement with the buyer but not later than 30 days of the earlier of date of payment or legal transfer.
The same invoicing requirement applies to all sale of property, regardless of whether the buyer is an S-REIT.