Updated e-tax guide for GST: Reverse Charge


3 Aug 2022

• Included changes relating to the implementation of LVG.

• New Paragraph 3.2, amended Paragraph 3.4 and new example 1 scenario (b) to include background of LVG.

• New Paragraph 4.3 on the scope of LVG.

• New Paragraph 4.4 on common scenarios in which imported services and LVG will fall into the scope of reverse charge.

• New Paragraph 4.6.3 on new rules where reverse charge supplies need not be accounted if the supply had been wrongly charged GST by the OVR supplier.

• Revised Paragraph 5.4.1 point 3 on situations where the 12-month rules does not apply.

• New Paragraph 6.1.7 on the inclusion of related services in the value of the supply of LVG.

• New Paragraph 9 on Payments made to overseas related parties.

• New Paragraph 11.3.3 on the alternative documents to maintain for RC transactions

• Amended Note in 7.3.1 to elaborate on the proxy to compute the portion of cost allocation that relates to salary, wages and interest (“SWI”)

• New footnote 41 to highlight that the exclusion of SWI does not apply to transactions between related companies that are not members of the same GST Group.

• New point in Paragraph 10.1.1 to highlight that the prospective basis should also be considered if the entity was found to be liable to register for GST on a retrospective basis.

• Amended 10.1.3 to reflect the rules relating to compulsory registration after taking into account LVG.

• New example 32 to illustrate the reporting requirements when the RC Business subsequently pays its supplier and repays the refund claimed previously.

• New Paragraph 13.4 on transitional rules for LVG supplies straddling 1 Jan 2023.

• New Paragraph 14.7 on qualifying funds claiming input tax based on the annual fixed recovery rate.

• New examples in Annex B on services provided by individual who belong overseas, recovery of insurance premiums and remittance and subscription fees for SWIFT.



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