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Government Grant: PSG for Laptops

Government Grant: PSG for Laptops

Productivity Solutions Grant (PSG) includes Laptops for SMEs

The Productivity Solutions Grant (PSG) is a strategic program implemented by the government to simplify processes and enhance productivity and operational efficiencies of SMEs (small and medium enterprises) in Singapore. Under the Resilience Budget, the PSG was expanded to boost business transformation by addressing the needs of Singapore businesses caused by the COVID-19 pandemic.

What’s new in PSG?

  1. The scope of pre-approved digital solutions was widened to include those which help in implementing Covid-19’s safety measures, such as online collaboration, virtual meetings, queue management, and temperature screening. Each eligible SME can receive support for up to 3 laptops bundled with online collaboration tools (such as Zoom and Microsoft Office 365) within each package. The 2 laptop-bundled remote working solutions, pre-approved by the Infocomm Media Development Authority (IMDA) and Enterprise Singapore (ESG), are offered by M1 and Singtel.
  2. Government support increases from 70% to 80%
  3. Valid until 31 December 2020

Who are eligible for the PSG?

The business can apply for PSG if:

  1. It is registered and operating in Singapore.
  2. The purchase, lease or subscription of the IT solutions and equipment are to be used in Singapore.
  3. At least 30% of its shares are held by Singapore Citizens or Permanent Residents (for selected solutions only).
  4. The company’s group annual sales turnover is not more than S$100 million, or the company’s group employment size is not more than 200.

Grant application will not be accepted if the business has:

  1. Made any payment to any party in relation to the purchase, lease or subscription of the IT solution or equipment.
  2. Signed any contract with any party in relation to the purchase, lease or subscription of the IT solution or equipment.

What are the laptop models and pre-approved solutions? Please complete this form and within 1 working day, we shall send you the current laptop model available as well as the latest list of other pre-approved solutions, which are regularly reviewed by the government bodies.

Check out the details on Singtel’s laptop packages while here are also the details for M1’s laptop bundles.

FAQ

1. What are the laptop brands?

Due to the lack of guaranteed supply, laptop brands cannot be promised. Subject to the stock availability, the brand and model are subjected to change without prior notice. However, the minimum laptop specifications required by IMDA are guaranteed.

2. Can I purchase the laptop first without PSG approval and apply for the grant later?

No, the PSG approval number Singtel and M1 will require a grant number upon purchase. Thus, any laptop purchased before the application is not valid for the grant.

3. Can the equipment or IT solution be used for the company’s subsidiary or related party?

No. the equipment or IT solution should only be used by the applicant entity and not by a related party.

4. How to apply for the PSG laptop grant?

We can provide you with a step-by-step guide. Whatsapp us and we shall send you within 1 working day.

5. What is the processing time for applications?

Applications are processed within 4 to 6 weeks from the submission of all required information.

6. What is the annual grant cap for PSG?

Each company supported by Enterprise Singapore, ESG is subjected to an annual grant cap of S$30,000 for the solutions pre-approved by ESG, starting on 1 April and ending on 31 March of the subsequent year.

7. What happens when the grant cap is fully utilised?

Companies that have fully utilised their grant caps will not be eligible for further support within the validity period. They may apply for new solutions in the next period when the grant caps are refreshed.

Above the other existing schemes, the company can also bear the out-of-pocket expenses (up to 90%) with the one-off S$10,000 credit, under the SkillsFuture Enterprise Credit, SFEC.

SFEC scheme encourages employers to invest in enterprise transformation and the capabilities of their employees.

Seven Tips on Efficient Bookkeeping for SMEs in Singapore

Seven Tips on Efficient Bookkeeping for SMEs in Singapore

As you establish your business, you need to consider a lot of aspects – from doing extensive research on your target market, creating a positive work environment, managing your staff in keeping financial records. All these factors are essential in having a successful business venture.   

More importantly, you must understand that sound financial management is the key to sustaining any business. For it to be financially sound, you should implement a proper bookkeeping process. But how? Well, most organisations struggle to keep their own financial records. And when negligent financial reporting happens, they suffer. 

The absence of an excellent financial bookkeeping process may lead to low cash flow margins, significant financial problems, audit risks, and missed growth opportunities. As a business owner, what should you do if you are faced with these situations? Start by getting to the root of the problem. If you’re not number savvy, it’s best to avail of bookkeeping services in Singapore rather than running the risk of non-compliance.   

However, if you want to do your own book, consider these tips for efficient bookkeeping for SMEs. We’ve made a list to help you out!


1. Know compliance guidelines and statutory laws.

As a business owner, you need to know the ins-and-outs of your business. You need to understand the compliance regulations set by Singapore Financial Reporting Standards (SFRS.)

It’s also good to have extensive knowledge of the Inland Revenue Authority of Singapore (IRAS) regulations. It can significantly help businesses in claiming tax credits. For example, both local and foreign companies can be eligible for tax incentives.

2. Develop a detailed and streamlined bookkeeping system.

Other than understanding the principles behind bookkeeping for small businesses, the company should streamline its processes. You can even purchase accounting software for convenience and seamless bookkeeping.

Every software program has its own unique features. But more than anything, it can help you achieve your goals and comply with your bookkeeping requirements. So, whether you want to invest in a sophisticated accounting software program or manually manage your books, you must develop a detailed system that addresses your needs.

3. Be consistent in doing your books.

Are you tired of working on piles of source documents? The best thing to do to avoid this situation from happening is by consistently updating your books. Record your business’ daily transactions. When you do it on a monthly basis, it will become a more tedious task than you thought.  

Imagine bookkeeping a year’s worth of financial records. Doing this task will take your time and other valuable resources. So, practice dedicating at least ten minutes of your time for bookkeeping.

4. Record ALL your transactions.

One of the most common problems finance managers experience is that businesses don’t have all the necessary records to address financial discrepancies. And when this happens, they are faced with compliance violations and penalties.   

Be sure to keep the records properly to avoid any financial complications. You can create your own system for the receipts, invoices, purchase, and business expense records, income records, statements, and accounting records to identify each from the other.  

In some instances, it may seem impossible for a bookkeeper to record every single transaction. However, it’s the bookkeeper’s responsibility to comply with the SFRS.

5. Go cashless.

Going cashless is one of the most efficient ways to keep track of your transactionsIf you are wondering why, well, most cash payments give you receipts. And it can be overwhelming to keep track of all them.   

For you to avoid losing a copy of your financial transactions, you can either pay via credit or debit card. This method ensures that you have created records of your purchases because they will be reflected in your bank statements.

These alternative forms of payment will significantly help you to check and trace your business’ expenses.

6. Separate personal and business finances.

Having trouble with your books? It’s likely that you didn’t keep personal finances separate to your business. To avoid recording private expenses in your books, you can do the following:     

  • Pay yourself a salary.
  • Start a bank account solely dedicated to your business.  
  • List all the things you’ve paid for your business and transfer the money to your personal account.   

By doing these things, you can accurately track your finances, both for your personal and business account.   

7. Hire professional bookkeeping services in Singapore.

Starting a business can be an overwhelming and tedious journey. While you’re at it, you need to focus on what really matters for your business. That’s why it is best to outsource your bookkeeping needs.   

If you don’t have the time and skills to manage your business’ booksyou can consider outsourced bookkeeping services in Singapore. Most service providers consist of a team of experts that can take the load off your hands. Whenever you have no idea where to start, seek the help of professionals like Mighty Glory Corporate Solutions.   

Mighty Glory Corporate Solutions is a virtual accounting practise that offers bookkeeping and accounting services for small businesses in Singapore.   

Our team is proficient in different accounting software and platforms to help you with your requirements. Want to know more about our services? Let’s arrange a meeting to discuss more. Call us at (+65) 6677 4258 today!

How To Improve The Company’s Cash Flow?

How To Improve The Company’s Cash Flow?

Introduction

Cash flow is the amount of money coming in and out of the business. It is a great indication of an entity’s liquidity or its ability to short term obligations. Positive cash flow in the form of cash sales and collections means that the incoming cash is higher than what is going out like purchases and payments. A shorter cash flow cycle or the amount of time needed for a business to convert assets to profits indicates robust profitability. Accounting services in Singapore include cash flow audit and design to improve liquidity and profitability.

The goal is to sustain a positive cash flow at a shorter cash flow cycle. However, the cycle is also dependent on one’s business model and operations. The time between spending cash in making the purchases of raw materials to collections on sales is not totally controllable. But, there are ways we can liven up sustained positive cash flow.

1. Improve collection processes

A significant amount of your cash inflow could be stuck in cash receivables. These liquid assets can easily turn bad and hold up your access to cash. Take a closer look at your Accounts Receivables (commonly known as Trade Debtors). How long is the average collection? Do you see a lot of overdue accounts? Give incentives to good clients and early payors and apply more aggressive collection efforts to delinquent accounts. You may also have to cancel the bad accounts.

2. Keep a closer eye on expenditures

Review your expenses. Check on the items that take a chuck of your expenditures. You might want to find more affordable alternatives or shift to better suppliers. Also, take a look into the smaller items, many of these are avoidable like the interest expenses and penalties.

3. Improve sales campaigns

Call on your sales team to boost their marketing efforts. Are your marketing campaigns still relevant and effective? Is your packaging outdated? Discounted sales and promotions are great at driving up sales, but could negatively affect profitability. Review your customers’ buying patterns and behavior. Do you have more repeat customers or complaints?

4. Open new markets

Widening your customer range will bring in more buyers and improved sales. There are plenty of ways to open new markets – branch out to a new market segment with different products, develop new products relevant to your existing ones, open stores in new locations, or open an online store to capture the online market.

5. Manage inventory

Inventory is ready-to-sell items that are kept in the warehouse. They are liquid assets stuck in storage. Furthermore, keeping your inventory safe costs money, which adds your expenses. Good forecasting and inventory management will ensure enough goods at hand while keeping the warehousing expenses at a minimum.

What Affect Company’s Cash Flow

A business, economic, or environmental crisis can throw off even the most careful and intensive business planning. Natural disasters and unforeseen events are unpredictable and immeasurable. Although we can set aside funds and prepare procedures in preparation for it happening, we cannot fully assess its effects on the business.

In any business crisis, there are several ways we can quickly implement in order to sustain positive cash flow and save the business.

1. Injecting fresh capital

Find new investors who can bring in new capital to the company. Owners can also add in new financing to ensure liquidity and continued business operations.

2. Emergency loans

You can secure term loans to carry the business over the rough patch. Your business bank can offer quick business loans at reasonable interest rates.

3. Discounted Sales

Converting liquid assets to cash through discounted sales is a good way of bringing in badly needed cash. It will also eliminate old stocks and slow-moving items.

4. Government Aids

Governments often provide a helping hand during economic disasters and business crises. In Budget 2020, Singapore Government has announced relief measures to help businesses tide over the trying times. Any business entity can claim for government help, provided that they fulfill the key eligibility criteria. Here are the few statutory bodies and organizations in Singapore that help companies to cope with the company cashflow during this coronavirus crisis:

a. “Helping Our Promising Enterprises” (HOPE) Fund

S$5-million was launched through the partnership between Singapore Business Federation Young Business Leaders Network (SBF-YBLN) and Goldbell Evolution Network (GEN) to provide an accessible short-term working capital loans for local SMEs. Each company can take a fixed quantum of S$50,000 with a tenure of 12 months, at a minimal administrative fee. The affordable interest rates range from 0.5% to 0.75% per month. Funding is secured over the personal guarantee of the company’s directors or shareholders. The allowance to defer the first loan repayment to start from the third month onwards is the HOPE Fund’s attractive feature.

b. Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL) by Enterprise Singapore

The loan quantum capping is increased to S$600,000 from the previous S$300,000 and the life-span’s extension to March 2021 enhance the previous scheme to help in financing a company’s daily operational cashflow needs for the unexpected COVID-19 challenge. Despite that the risk-share is also increased, the standard loan recovery procedure remains. If the company has an on-going overseas project, the management may also consider the Project Loan scheme.

c. Singapore Budget 2020

Generous provisions in the Budget 2020 were set to provide for the different needs of households, workers, and businesses affected by the pandemic COVID-19. The obligations to pay are reduced through these useful schemes such as the popular Corporate Income Tax Rebate, Property Tax Rebate (up to 30% of the property tax payable) and one-time offset for 3 months of staff wages under Jobs Support Scheme. The enhanced Wage Credit Scheme gives 20% of co-funding for salary increments in 2019, which is higher than the rate for 2020. This is a valuable benefit as a result of a past event. Additional support is also available to help the industries affected by the coronavirus – tourism, aviation, food and beverage, retail, and point-to-point transport services.

d. Temporary Bridging Loan Programme (TBLP) for Tourism Sector

TBLP, an additional cashflow support for local SMEs in the tourism industry, is a newly-introduced measure. Eligible enterprises can obtain loans, from participating financial institutions, of up to $1-million, with the interest rate capped at 5% per annum. It is open for application till March 2021 and the maximum loan tenure is 5 years.

e. DBS Relief Measures and Support

DBS Bank Limited understands that managing the cash flow needs is the top priority of every company. Besides being one of the participating financial institutions under TBLP, the other short-term liquidity relief measures and initiatives offered by DBS include but not limited to:

• DBS customers with existing secured property loans would only need to service the loan interest for the next 6 months, upon effect.
• The due dates for import facilities will be extended up to 60 days.
• Rebates are offered for certain bank services.
• Small business loans (up to S$50,000) can be obtained within 1 working day upon loan acceptance, without the need to submit any financial report.

Singapore Finance Minister will deliver the supplementary Budget on the coming Thursday, March 26. The supplementary measures are additional support to assist households, workers and businesses in surviving through the coronavirus outbreak. We will share the business-related measures in our Facebook and LinkedIn pages. Stay tune!

Do you have other questions or want to know more on how to improve your company’s cash flow? Get the right advice coming from the experts on accounting and corporate secretarial solutions.

Contact Mighty Glory Corporate Solutions today and let us discuss your business needs.

How To Choose The Right Accountant For Your Business?

How To Choose The Right Accountant For Your Business?

Introduction

The accountant is a vital team member of your business. Accountants are the people to call for your financial reporting, analysis and taxation as part of your company’s compliance requirements in Singapore. The ideal accountant should have the expertise and knowledge of diversified business industries, law and regulations which are important, invaluable and inevitable in business.

Partnering with the right accountant is in the best interest of your business. An experienced, skilled, and capable person to handle your company’s financial reporting, business analysis, and taxation will bring in immeasurable advantage to your organization. While engaging someone who doesn’t have a full grasp of the position and its importance can be disastrous to your company. Thus, the importance of engaging the right person to handle the job is high.

Here are five major considerations when choosing the right accountant for your business:

The Accountant’s Location

Are you looking to hire an internal accountant or looking to outsource your accounting needs? If you need an internal accountant, your candidate pool is limited to those near you. With cloud accounting, connectivity, and availability of safe and reliable accounting software, outsourcing your accounting needs is a viable option. If a virtual office is compatible with your needs, your accountant can be anywhere in the world, then the location wouldn’t matter. For best work arrangements, we recommend engaging an accountant who is cognizant of your local business taxation, regulations, and accounting laws. This is why accounting firms in Singapore are the best option for Singapore businesses.

The Accountant’s Expertise, Credentials and Specialization

Knowing the accountant’s level of expertise, skills, credentials, and prior experiences are vital to find a good fit. Do you need an experienced accountant who can bring in expertise, lead a team, and make decisions? Or are you looking for someone you can train to handle the bookkeeping? Are you looking to hire a team of accountants or just one person? Do you need an expert in taxation or one who is adept in cost accounting?

Workload Allocation

Which areas of the accounting process are you going to delegate and which are you going to keep in-house? As external accountants can be expensive and charge by hours, it is customary for small businesses to outsource the more complex tasks of reviewing the results produced by the bookkeeper, generating financial reports or working on bank reconciliation and taxation while keeping the laborious bookkeeping in. You can resolve this issue and work seamlessly with your accountant by using a user-friendly cloud accounting software, which is compliant with IRAS’s technical requirements, like Xero, QuickBooks, and Financio.

Accounting Software

Most, if not all, accounting firms in Singapore use one or more accounting software to facilitate work, sharing and collaboration with their clients. They would have several names for you to choose an accounting software that will fit your business needs, budget and usage. Some software can be integrated with most of your business processes and financial aspects like banks, invoicing, inventory and collections. The most popular online accounting platforms include Xero, QuickBooks and Financio. Each has its benefits and drawbacks. To choose the best software, it is best to discuss with your accountant.

Check out this article Five Advantages of Million Accounting System

Costs

The cost of hiring an accountant should not exceed the savings you get from the services rendered. If the cost of outsourcing your accounting department to an accounting firm is less than what you are spending to maintain the said department, or if it frees you time to work on other tasks, then outsourcing is a good option for your business. The cheapest accountants are not always the best deal. Expertise, experience and industry knowledge come with a premium. Shop around outsourcing firms in Singapore for comparable rates, consider the inputs that come with the price, and compare the fees and the service scope.

Steps in Hiring an Accountant for your Business

The process of finding, choosing, and hiring an accountant for your business should not be rushed. Careful considerations of the five basic aspects of engaging an accountant mentioned above have to be observed. Sharing your company’s most sensitive data with the wrong person might have serious repercussions. Extra precaution must always be exercised in hiring the right person for any accounting position, regardless junior or senior. Here are the steps in finding and choosing the right accountant for your business and its considerations;

1. Evaluate your company’s needs

Assess the accounting and bookkeeping tasks you need to delegate > volume, complexity and types of data. Can you afford to outsource, or would you rather keep it internal? For small business needs, we recommend engaging an external accountant to provide all your accounting needs. An external accountant can perform all your accounting needs without the need to hire, train and provide workspace.

2. Profile the right accountant

Based on your company’s needs, create a profile of your accountant. This should include his / her experience, prior industry exposure, certifications, location, preferred software used, skills, and expertise.

3. Shortlist the best candidates

Start looking for your accountant. You can do this by posting a job ad, asking for referrals, or going online to search for accounting firms in Singapore. Compile a list of no more than ten possible candidates. Reach out and schedule a face-to-face interview or meeting.

4. Conduct interviews

The goal of the interview or initial meeting with the accountant candidate is to verify the initial information you have gathered about the accountant and his / her firm. Ask the more important details such as the software they are using, price ranges, service coverage and their work processes. Let them share with you as much as they would like.

5. Do background checks

After meeting them for the first time, you will have fewer candidates on your shortlist. Filter further by conducting background checks. Call company partners and affiliations to check out if their claims match. Check for their online profiles and social media presence. Cross out any candidate with any misrepresentations and false claims.

6. Conduct final interviews

You should have no more than three candidates now. Before you make the final selection, ask for a final interview. This time discuss with the candidates as many details of the job as you can and ask how they are going to go about it.

Conclusion

After the final interview, you should have a very good idea of who to pick. If all final interviewees are qualified and ideal for the position, go for the one whom you think can contribute the most to the company in terms of expertise, savings and teamwork.

We offer quality accounting services in Singapore. Connect with us to discuss more of your staffing needs and company compliance requirements in Singapore. We look forward to helping you identify your business needs and providing you with efficient and holistic solutions.

Let’s discuss your business needs today.

Overview of GST Reverse Charge

Overview of GST Reverse Charge

In Budget 2018, two regimes to levy GST on imported services, are announced to be implemented from 1 January 2020 onwards, namely Reverse Charge regime for Business-to-Business (“B2B”) supplies and Overseas Vendor Registration regime for Business-to-Consumer (“B2C”) supplies.

Reverse Charge Regime subjects the B2B procurement of imported services to input tax or GST. The current GST rule only requires input taxes to be applied on services procured from local GST-registered persons. The Reverse Charge (RC) regime stipulates the transfer of GST obligation to the buyers of imported services intended for business use.

The advent of technological advancements initiated the influx of virtual business solutions. This offered an option for Singapore businesses to procure service from outside of the country. The goal of the changes is to level the GST treatment for services procured locally and those obtained overseas.

Example

Company A obtains payroll services in Singapore from Payroll Company who is based in Singapore, and marketing services from an online marketing solutions provider.

In the current GST rule, Payroll Company has to report the GST on the payroll services in its GST return, while no GST is chargeable for the marketing services.

With the RC regime, Payroll Company will shoulder the GST for the payroll services, while Company A will be accountable for the GST on the marketing services.

Who are subjected to RC?

The following are covered by the changes in the RC regime;

  • A GST-registered entity who is
    1. A business not entitled to claim input tax in full;
    2. An organization who carries out non-business activities (such as charities or welfare groups who offer free or subsidised services, and investment holding companies which derive dividend income) and receives non-business receipts, is not entitled to claim input tax in full; or
    3. A fully taxable person who chooses to apply RC.
  • A Non-GST registered business
    1. Whose total value of imported services, procured within a 12-month period, exceeds the S$1 million threshold; and
    2. Who is not entitled to claim input tax in full even if it was GST-registered.

Exceptions to the Rule

By announcing these changes in the announcement in Budget 2018, this move gave the affected businesses about 22 months, providing ample time to prepare. Once the law takes into effect, no extension will be granted to anyone who might attempt to request for leniency. However, there are exceptions to the rule:

  1. Businesses that create and provide non-taxable goods and services may qualify for partial GST claims. Products and services include but not limited to:
    • Tax-exempt supplies under the 4th Schedule of the GST Act.
    • Zero-rating supplies under Section 21(3) of the GST Act.
    • Non-taxable government services under the Non-Taxable Government Supplies Order of the GST Act.
  2. Businesses that provide free or subsidized products and services.
  3. Regulations 28 of the GST General Regulations or the De Minimis Rule is not satisfied.
  4. RC is not applicable to supplies that have been previously taxed in Singapore.

Example

Singapore Corporation engages Foreign Services to conduct a market research for $20,000. Foreign Services will outsource the job to Local Research Firm for $15,000. After the completion of the project, GST computation is as follows;

Local Research Firm will bill Foreign Services $15,000 plus the 7% GST of $1,050 to get a total of $16,050.

Foreign Services will bill Singapore Corporation $20,000. Singapore Corporation will account for 7% GST on $5,000 as the $15,000 has already been taxed. GST charged to Singapore Corporation for this transaction is $350.

Which transactions are affected?

Although the law was announced as early as 2018, the blanket implementation of the rule is on 1 January 2020. RC will apply to all transactions of the affected services paid or delivered, whichever is earlier, on or after the implementation date.

  1. General Rule – The earlier of when the invoice in respect of the supply is issued and when the payment is made.
  2. Consistent Application – Businesses may also account for RC at the earlier of when the invoice in respect of the supply is posted and when the payment is made, if all GST returns are prepared on the same basis.
  3. RC Business Applying RC At The End of Longer Periods – The day immediately after the last day of the longer period. If the accounting period end on 30th June, the time of supply is 1st July.
  4. Special Rules
    • Intra-GST group and interbranch transactions – The earliest of when the invoice in respect of the supply is issued, when the payment is made, and 12 months after the basic tax point. This rule done not apply to continuous supply of services.
    • Transactions straddling the registration – Services performed before registration can be (a) excluded from RC or (b) the time of supply set to the service date or when the service was rendered.
    • Transactions straddling the de-registration – Services performed before de-registration are subject to RC, with the time of supply set to the day immediately before the de-registration takes effect.
    • As an administrative concession, GST-registered businesses who are unable to accurately determine if they will be partially exempted from year to year, they may elect to apply RC only at the end of the longer period.

Mighty Glory Corporate Solutions provides accounting and tax services, bookkeeping, payroll services, and more corporate solutions in SingaporeConnect with us today to know more about the Reverse Charge Regime and how it may affect your business. We look forward to helping you identify your business needs and provide customized, efficient and holistic solutions.

GST Implication From Customer Accounting

GST Implication From Customer Accounting

Starting from 1 January 2019, customer accounting for prescribed goods is mandatory required under the GST regulations. This is applicable to the supplies of certain prescribed goods acquired by a GST-registered customer intended for business use, provided that it is (a) a local sale of prescribed goods with a GST-exclusive value of over S$10,000 and (b) not an excepted supply.

Customer accounting transfers the responsibility of GST accounting from the seller (or supplier) to the buyer (or customer). The changes are aimed to counter non-reporting and other fraud schemes where the supplier or seller absconds with the collected GST.

Under the Customer Accounting (CA) scheme, the sellers are not allowed to charge and collect GST from their customers. They are, however, required to issue a customer tax invoice that reflects the customer’s GST registration number and a statement to inform the customer of his/her GST accountability, and the application of CA in that purchase. The seller will also have to report the transaction in his GST returns.

What are the Prescribed Goods?

The application of CA is limited to the prescribed goods, which include but are not limited to the following:

  • Mobile Phones – Examples include smartphones, Blackberry, or tablets that can transmit and receive calls and messages over a cellular network. The purchase of a mobile phone is, however, excluded from customer accounting if it comes with a post-paid mobile subscription plan by a local telecommunication service provider. Satellite phones, walkie-talkies, smartwatches, mobile landlines, phones over 17.5 cm in screen size, and smartphone accessories such as chargers, screen protectors, and batteries are not included in the CA scheme.
  • Memory Cards – This category includes memory sticks, Secure Digital (SD) cards and CompactFlash. The exclusions are solid state drive (SSD), thumb drive, dual in-line memory module (DIMM), random access memory (RAM), portable external hard disk, hard disk drive (HDD), and other smart cards with embedded chips such as ATMs, SIM cards, and credit cards.
  • Off-the-Shelf Software – The software included in this category are those that are not specifically customized for the customer. Such software is stored in a CD or similar storage device; or the product can be accessed through a product or license key, activating or other similar code which is provided as part of the purchase. Prescribed goods for CA include software sold in physical boxed packaging like anti-virus, accounting, gaming, design tools, etc. Pre-installed software is not prescribed for CA. Software back-ups stored in CD or similar storage device, Xbox Live, software downloadable from the internet (whose key or code for access is provided via email), and PlayStation Plus are examples of software not qualified for CA.

‘Excepted Goods’ which are not subject to CA, are the supplies of goods made under:

  • Gross Margin Scheme – The computation of GST is based on the gross margin, not the full value, of the goods supplied. This scheme is applicable if (1) the primary business activity is dealing with used goods and (2) the second-handed goods are purchased free of GST.
  • Approved Third Party Logistics (3PL) Company Scheme – Under certain conditions, no import duty or GST is applicable on the supplies of goods from the overseas customers of these approved logistics companies.
  • Approved Refiner and Consolidator Scheme – Either the approved refiner or consolidator can enjoy the certain GST benefits, which are specially designed to ease cash flow and relieve indirect taxability on refining activities for investment precious metals (IPM).
  • A deemed taxability arising from the transfer or disposal of goods at no cost.

When to Apply Customer Accounting

To apply CA, the following conditions must be met;

  • The customer must be a GST-registered person;
  • The purchase of prescribed goods is conducted in the ordinary course of a business; and
  • The value of the prescribed goods exceeds S$10,000.

Connect with us today to learn more about customer accounting and how this may affect and/or apply to your business. We look forward to helping you identify your business and personal needs, and providing you with efficient and holistic solutions.