Singapore legislation
Section 20
Section 20
Input tax allowable under section 19
(1)
The amount of input tax for which a taxable person is entitled to credit at the end of any prescribed accounting period is so much of the input tax for the period (that is input tax on supplies and importations in the period) as is allowable by or under regulations as being attributable to supplies within subsection (2).
(2)
The supplies within this subsection are the following supplies made or to be made by the taxable person in the course or furtherance of the taxable person’s business:
taxable supplies;
(aa)supplies permitted to be made under section 27 or regulations made under section 27 without payment of the tax chargeable on the supplies;
(ab)supplies of investment precious metals referred to in Part 1 of the Fourth Schedule, where any such supply —
is made by an approved person referred to in section 37B; and
is a supply that directly follows the refinement of goods (as defined in section 37B(2)) into such metals;
supplies outside Singapore which would be taxable supplies if made in Singapore;
such other supplies outside Singapore as the Minister may by regulations specify for the purposes of this subsection;
supplies which section 37 or regulations made under section 37A provide are to be disregarded for the purposes of this Act and which would otherwise be taxable supplies.
(2A)
Despite subsection (1), a taxable person is not entitled to credit for any input tax on any supply made to the taxable person which the taxable person knew or should have known was a part of any arrangement to cause loss of public revenue (whether or not the loss was in fact caused).
(2B)
For the purpose of subsection (2A), an arrangement to cause loss of public revenue is an arrangement comprising 2 or more supplies (whether or not the supplies are in the same chain of supply or in different chains of supply), the effect of which is that one or more persons evade or avoid paying any amount of tax, or is able to seek to obtain any credit for or refund of tax which the person or persons would not otherwise be able to obtain.
(2C)
Illustrations of an arrangement mentioned in subsection (2A) are set out in the Ninth Schedule, and the Minister may by order in the Gazette amend the Ninth Schedule.
(2D)
For the purposes of this Act, a taxable person should have known that a supply made to the taxable person was a part of an arrangement mentioned in subsection (2A) if —
the circumstances connected with the supply made to the taxable person or with a supply made by the taxable person, or both, carried a reasonable risk of the supply being a part of such arrangement; and
the taxable person, before making a claim for credit for the input tax on the supply to the person —
did not take reasonable steps to ascertain whether the supply was a part of such arrangement; or
took reasonable steps to ascertain whether the supply was a part of such arrangement and —
concluded that the supply was not a part of such arrangement and the conclusion is not one that a reasonable person would have made;
was unable to conclude that the supply was not a part of such arrangement; or
did not make any conclusion as to whether the supply was or was not a part of such arrangement.
(2E)
To avoid doubt —
subsection (2D) applies in a case mentioned in paragraph (b)(i) of that subsection even if a reasonable person, after having taken reasonable steps, would have concluded that the supply was not a part of an arrangement mentioned in subsection (2A); and
subsection (2D) applies in a case mentioned in paragraph (b)(ii)(B) or (C) of that subsection even if a reasonable person would have concluded that the supply was not a part of an arrangement mentioned in subsection (2A).
(2F)
To avoid doubt, where —
the taxable person took reasonable steps to ascertain whether the supply was a part of an arrangement mentioned in subsection (2A) and concluded that the supply was not a part of such arrangement; and
the conclusion is one that a reasonable person would have made,then, the person is not a person who should have known that the supply was a part of such arrangement, for the purposes of this Act.
(2G)
The circumstances for the purposes of subsection (2D) include the following:
any of the supplies in question is not a supply which the taxable person would ordinarily enter into, given the nature and extent of the taxable person’s business;
the value of any of the supplies in question is substantially in excess of the value of the assets of the business carried on by the taxable person or the risks required to be borne by the taxable person for the supply;
the reasonableness or commerciality of any of the supplies in question is questionable, for instance, where there is a ready supplier to the taxable person and a ready buyer from the taxable person for the same goods or services in circumstances where the need for the taxable person as an intervening supplier is unnecessary;
the consideration for the supply to the taxable person, or for any supply by the taxable person to a buyer, are pre‑determined, or the profit of the taxable person is guaranteed;
the arrangement for payment of the consideration for the supply to the taxable person does not accord with usual business practice;
the taxable person has little or no knowledge of or past dealing with the supplier to the taxable person or the buyer from the taxable person, or both.
(3)
Regulations may provide for treating some or all supplies of goods or services by any person as taxable supplies —
where the tax attributable to exempt supplies would be less than such amount, or less than such part of the whole of the input tax, as may be prescribed;
where such supplies are made to a taxable person for the purpose of any business carried on by the taxable person; or
in other prescribed circumstances.
(4)
The Minister may make regulations for securing a fair and reasonable attribution of input tax to supplies within subsection (2), and any such regulations may provide for —
determining a proportion by reference to which input tax for any prescribed accounting period is to be provisionally attributed to those supplies;
adjusting, in accordance with a proportion determined in like manner for any longer period comprising 2 or more prescribed accounting periods or parts thereof, the provisional attribution for any of those periods; and
the making of payments in respect of input tax, by the Comptroller to a taxable person (or a person who has been a taxable person) or by a taxable person (or a person who has been a taxable person) to the Comptroller, in cases where events prove inaccurate an estimate on the basis of which an attribution was made.
(5)
Without limiting subsection (4), regulations made under that subsection may —
make different provisions for different circumstances and, in particular, for different descriptions of goods or services; and
contain such incidental and supplementary provisions as appear to the Minister necessary or expedient.