IRAS clarifies on GST treatment on discount vouchers

This clarification by IRAS was in response to the recent letter “Query on taxes on a discounted meal” (ST Forum, 14 Oct 2014) by Mr Chiok Beng Piow.

“Mr. Chiok had purchased a Groupon deal for lunch at a restaurant. He asked if the Goods and Services Tax (GST) should be charged on the original price of the lunch of $71 or the discounted price of $38.80.

For discount vouchers that specify the goods or services to be redeemed, GST is charged at the discounted price since this represents the actual value of the goods or services sold. Hence, in Mr. Chiok’s case, the GST should have been charged at the discounted price.

IRAS has contacted the restaurant to clarify the correct GST treatment. Mr. Chiok can also check with the restaurant on how he can seek a refund for the excess GST paid.”

This goes to show that incorrect application of GST treatment by businesses is still prevalent despite it has been 20 years since GST was first implemented in Singapore. Businesses should seek IRAS or professional advice if they are not sure of the correct treatment as the penalties for incorrect application will be very punitive.


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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