Prepare Singapore GST bad-debt relief and later recovery records

A Singapore GST bad-debt relief file begins with the supply on which output tax was accounted for and paid. Retrieve the invoice, original GST return reference, customer balance and write-off entry. Reconcile payments and credits before proposing relief; the current receivables report may already exclude amounts written off in an earlier period.

IRAS requires the relevant consideration to be written off as a bad debt and sets other conditions. Normally 12 months must have elapsed from the supply, although qualifying debtor insolvency can permit an earlier claim. The claim must be made within five years of the supply date. Have the reviewer test the actual dates and conditions before selecting the return period.

IRAS provides a self-review checklist that must be completed and retained for the claim. Assemble evidence for each relevant answer, including the original tax, write-off, collection efforts and other eligibility conditions. For goods, preserve support for the transfer of ownership; the supply-value condition also requires review.

Record collection attempts with dates, amounts discussed and outcomes. Appropriate recovery efforts depend on the circumstances, including the size of the debt and resources available. Keep correspondence or formal recovery records that explain why the outstanding amount is considered uncollectible. A generic note saying the customer did not pay gives the reviewer little to assess.

If early insolvency is the basis for the claim, obtain the relevant formal evidence and have the reviewer confirm that it meets the IRAS criteria. A missed payment, a rumor about closure or a salesperson's concern should remain a collection fact rather than being relabeled as legal insolvency.

Keep the gross outstanding consideration and the tax element distinguishable. Check the original supply's rate, partial receipts and credits. Ask the reviewer to assess unusual arrangements, including debts involving several supplies or settlements covering more than one invoice, before applying a simple fraction to an account total.

IRAS directs an eligible claim into Box 7 and requires the bad-debt claim information in Box 11. Save the amount approved, the completed checklist, return period and posting reference. If several debts are claimed together, retain the invoice-level schedule behind the aggregate return amount.

Give the collections team a marker showing that relief was claimed without deleting the original debt history. Later receipts may arrive with an old invoice number or be allocated to a customer account after the finance team has stopped reviewing the written-off item.

A recovery after relief creates a repayment review. IRAS calculates the repayable GST by relating the payment received to the outstanding consideration and the relief previously claimed, using GST-inclusive amounts. The repayment belongs in output tax for the relevant return.

Match each later receipt to the original claim schedule and record the approved repayment. Retain the remaining debt and relief balances after partial recoveries. Where a settlement covers several invoices, preserve the allocation agreed for the tax calculation. The file should let another preparer determine what relief remains outstanding without assuming that every recovered dollar is new sales revenue.