On or about 22 April 2019, the Inland Revenue Authority of Singapore (IRAS) has published the Third edition of GST: Transfer of Business as a Going Concern and other Excluded Transactions. It replaces the second edition which was published on 9 March 2018.
The e-Tax Guide aimed to explain and provide examples of transactions that are regarded as neither a supply of goods nor services and hence are not subject to GST.
Businesses should read this guide if they are:
- Transferring business as a going concern; or
- Transferring or assigning the title to the goods comprised in a hire purchase agreement when they assign their right to receive payments (as a financier) under the agreement to another financier; or
- Transferring qualifying income tax deductions to another company belonging to the same group of companies as them.
This revised guide inserted a new paragraph 13 on issue of carbon credits as follows:
“Under the Carbon Pricing Act which came into operation on 1 Jan 2019, a carbon tax will be imposed on a business whose emission of greenhouse gases (GHG) over a period of time has exceeded a stipulated emission threshold. The business will be required to purchase carbon credits from the National Environment Agency (NEA) to cover its carbon tax liability.
As the purpose of the carbon credits is to control emissions in Singapore by discouraging businesses from emitting GHG at their current levels, and to align the GST treatment with other non-taxable Government supplies, the issue of carbon credits by NEA has been treated as an excluded transaction for which GST is not chargeable.”
Source: IRAS, 23 April 2019