If you’re GST-registered in Singapore, the general idea is simple: you can claim the GST you’ve paid on business purchases — that’s your input tax. But there’s a catch. Some expenses, no matter how much you might think they’re business-related, are specifically blocked from claims.
The logic? IRAS wants to make sure GST relief only applies to expenses tied directly to making taxable supplies, not to perks, personal benefits, or loosely connected costs. It sounds fair enough, but the tricky part is knowing exactly where the line is.
Get it wrong and you could end up overclaiming, facing adjustments, or dealing with an audit you really didn’t need.
Commonly Blocked Expenses
There’s a short but important list of expenses where GST claims are automatically off the table. They include things like:
- Fees for club memberships at sports or recreation clubs.
- Perks for employees’ family members or relatives.
- Buying, renting, or running most motor cars.
- Medical expenses for employees — except in specific allowed situations.
- Transactions linked to betting, lotteries, or games of chance.
- Medical or accident insurance premiums for staff, unless they’re compulsory under law or a valid industrial agreement.
Medical Expenses
For a long time, medical costs were claimable only if they were legally required — say, under the Work Injury Compensation Act (WICA) or an employment agreement covered by the Industrial Relations Act (IRA). Anything else? Blocked.
Then came 2021 and the Amendment Regulations, partly in response to COVID-19. The rules widened, but still with conditions.
If the expense relates to COVID-19, it’s claimable if the employee is told — in writing — by the Government or a public authority to get that treatment.
If it’s not related to COVID-19, it’s claimable only if the law requires the treatment or mandates that the medical facility or practitioner be provided.
There’s also a third situation: when the nature of the employee’s work genuinely requires it — think of roles with particular health risks or exposure to certain environments.
A real-world scenario always makes the rules easier to digest.
Mr. XYZ sends his existing staff for medical exams to renew work permits and buys them medical insurance. He also sends potential hires for pre-employment checks.
Here’s how that plays out for GST claims:
- The work permit renewal medical exam? Disallowed. It’s considered medical treatment for employees and doesn’t meet the exceptions.
- The medical insurance? Also disallowed — unless it’s compulsory under WICA, IRA, or a collective agreement under IRA.
- The pre-employment medical exam? Allowed, because it’s before the person officially becomes an employee.
It’s a good reminder: the timing and legal obligation behind the expense matter as much as the nature of the expense itself.
Costs and Running Expenses on Vehicles
Vehicles are a common source of GST confusion. The rule for motor cars is straightforward: GST on buying, renting, or running S-plated motor cars is blocked — even if you use them for work.
Commercial vehicles like vans and lorries are a different story — those costs are claimable.
Mrs. ABC, for example, runs a wholesale business. She uses vans for deliveries (full GST claimable) and rents S-plated cars for her sales team (GST blocked). Petrol, repairs, parking — the same split applies: vans, yes; S-plated cars, no.
Benefits Provided to Relatives of Employees
Employee perks can sometimes be claimable, but once you extend them to family members or relatives, the GST claim stops.
Imagine Mr. PQR organises a company family day at the zoo. He gives each employee two tickets — one for themselves, one for a family member. The employee’s ticket? GST claimable. The family member’s ticket? Blocked.
It’s not about the event itself; it’s about who the benefit is for.
Club Subscription Fees
Club memberships might be useful for networking — golf courses, country clubs, that sort of thing — but the GST on joining, subscription, or transfer fees is blocked.
That doesn’t mean you can’t claim anything connected to the club. If you pay for specific use — green fees for a client round, buggy hire, or even dining — and it meets the normal GST rules, you can claim that.
The membership is seen as a personal or non-business asset. The specific expenses? Those can be business-related.
Why These Restrictions Exist
The blocked credit rules aren’t there to make life harder — they’re about drawing a clear line between private spending and genuine business costs.
If claims were allowed on personal perks, luxury expenses, or benefits with only a loose connection to making taxable supplies, it would distort the fairness of GST and reduce tax revenue unnecessarily.
Final Thoughts
Blocked input tax rules can feel a bit like red tape, especially if your business mixes client hospitality, staff benefits, and operational needs. But these rules also protect the system. They stop GST relief from drifting into personal territory and keep the playing field level for businesses.
The safest habit is to check yourself before claiming: Is this legally required? Is it directly connected to making taxable supplies? Is it purely for business use? If you hesitate, it’s a sign to dig deeper — or to leave it out of your GST claims.
Training your finance team to spot these boundaries is worth the effort. It keeps claims clean, reduces the risk of disputes, and makes audits far less stressful. In the end, staying on the right side of the rules means you keep more than compliance — you keep your credibility.
