Download SUMMARY TABLE ON TAX CHANGES – BUDGET 2012 CHANGES

SUMMARY TABLE ON TAX CHANGES – BUDGET 2012 CHANGES
Note: You may download the summary table, as well as other relevant
documents here.
No. Tax Change
Description and Reason for Change
Amendment to
GST Act
1
To develop a new refining and trading cluster in
Singapore, the import and supply of investment-grade
precious metals [“IGPM”, specifically gold, silver and
platinum], will be treated as exempt supplies, similar to
the supply of financial services.
Sections 8, 20,
22, new 37B, 41
&
Fourth
Schedule
GST
exemption
for
investmentgrade gold &
precious
metals
The GST Act will be amended to:
(i) exempt the import and supply of investment-grade
gold and precious metals from GST; and
GST exemption applies to imports and local sale of
precious metal that satisfy the minimum purity content
and prescribed attributes of “investment-grade”,
namely:
(a) The exemption applies to bar, wafer, ingot, and
coins;
(b) The purity of gold, silver and platinum should be
99.5%, 99.9% and 99% respectively;
(c) The IGPM must be capable of being traded on the
international bullion market;
(d) The IGPM bears a mark or characteristic
internationally accepted as guaranteeing its quality;
and
(e) The IGPM trades at a price based on the spot
price of the metal it contains.
Investment-grade bars, wafers & ingots
To ensure that an investment-grade bar, wafer or ingot
can be traded readily in international markets as
specified in condition (c), we will exempt those
produced by:
(i) A refiner accredited in the ‘Good Delivery’ List of
the London Bullion Market Association (LBMA)
in the case of gold and silver; or
(ii) A refiner accredited in the ‘Good Delivery’ List of
the London Platinum & Palladium Market (LPPM)
in the case of platinum; or
(iii) A refiner in Singapore endorsed by IES and that
intends to be accredited under (i) or (ii).
The LBMA/LPPM accreditation is widely recognised as
the de facto industry standard for quality of precious
[Clauses 2, 3, 5,
8, 9 & 11]
metal bars and enables the refiner’s output to be readily
accepted for delivery on many commodities exchanges.
Investment-grade coins
For investment-grade coins, we will prescribe a list of
qualifying bullion coins for GST exemption to give
certainty. These coins are regarded by the industry as an
alternative investment to bullion bars and are selected
using the following criteria:
(i)
(ii)
Legal tender in their country of issuance;
Price is determined largely by spot market and not
for numismatic or collector’s value;
(iii) Have a liquid market for international trading.
(ii) introduce a new Approved
Consolidator Scheme.
Refiner
and
A new GST scheme will also be introduced to ease
cash flow of qualifying refiners and consolidators of
precious metals in the payment of input GST on
import and purchase of raw materials, as well as to
relieve input tax on precious metal refining. This will
allow approved persons to enjoy the following GST
benefits:
(i) allow input tax claims on expenses directly
incurred on refining of IGPM, even though the
subsequent supply of IGPM is an exempt supply;
(ii) allow full input tax claims to approved refiner to
ease compliance, recognising that he is
substantially in business of precious metals
refining; and
(iii) allow GST suspension on imports and local
purchases of approved refiners and on imports of
approved consolidators for inputs to refineries.
For more information on the new GST scheme, please
refer to the draft Goods and Services Tax (General)
(Amendment) Regulations 2012.
The above changes were announced in Budget 2012 and
will take effect from 1 Oct 2012. IRAS will publish a
circular to explain the changes and operational details by
1 September 2012.