The Inland Revenue Authority of Singapore (IRAS) has updated its administrative concession governing input tax claims on fringe benefits, specifically addressing scenarios involving overseas suppliers. The changes, effective 1 July 2025, are detailed in the revised e-Tax Guide “GST: Fringe Benefits”.
Key Change: Inclusion of Overseas Vendors under OVR
Previously, the administrative concession allowed employers to claim input tax on supplies of fringe benefits contracted directly in an employee’s name (e.g., mobile phone plans, club memberships), provided:
- The employee was fully reimbursed by the employer, and
- The expenses were recorded as business expenses in the employer’s accounts.
Effective 1 July 2025, this concession is explicitly extended to cover fringe benefits supplied by overseas vendors registered under Singapore’s Overseas Vendor Registration (OVR) regime. This applies when the employee contracts directly with such an OVR-registered supplier.
Critical New Documentation Requirement
To claim input tax under this concession for benefits supplied by OVR-registered overseas vendors, employers must now obtain and maintain supporting documentation. This documentation must clearly evidence that Goods and Services Tax (GST) was charged by the overseas supplier on the supply.
Summary of Conditions for Input Tax Claim
Employers can claim input tax on fringe benefits contracted in an employee’s name if:
- The employee is fully reimbursed.
- The expense is treated as a business expense in the employer’s accounts.
- For supplies from OVR-registered overseas vendors (from 1 July 2025): Valid documentation proving GST was charged by the supplier is maintained.
Purpose and Impact
This update provides clarity and streamlines compliance for businesses procuring fringe benefits for employees directly from overseas suppliers who are registered for GST under the OVR regime. It ensures consistent administrative treatment for similar fringe benefits regardless of whether the supplier is domestic or overseas (OVR-registered), while reinforcing the need for proper GST documentation from overseas vendors.
Next Steps for Businesses: Employers procuring fringe benefits via employees from overseas vendors should review their processes to ensure they obtain proof of GST charged (e.g., tax invoices meeting OVR requirements) for supplies occurring on or after 1 July 2025 to support input tax claims.
Source: IRAS, 2 July 2025