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Industry Guide:

Venture Capital

 
Please click here to download complete guide.

 

FREQUENTLY ASKED QUESTIONS 

Registration 

1. If a VCC makes only investment activities (exempt supplies), does the company need to be registered?

The Company is not required to be registered. 

2. I am a VCC which makes investment as well as management services to an investee company, should I be registered under GST?

Since investment activities are exempt supplies and management services are taxable supplies, the taxable turnover for the purpose of registration will only take into account the management services. You are required to be registered if the taxable turnover exceeds the threshold. However, if your taxable turnover is below the threshold, you may apply for voluntary registration. For further details, please refer to the General Guide. 


Group Registration 

3. Can a VCC apply to be a member in a group registration? 

Group registration is only allowed for companies making wholly taxable supplies. Since a VCC is normally a mixed supplier i.e. makes taxable and exempt supplies, VCC is not eligible for group registration. 


Input Tax Credit (ITC) 

4. I incurred legal expenses in arranging for an investment venture. Can I as a registered VCC claim GST incurred on the legal services?

You are only allowed to claim GST incurred on your inputs which are attributable to taxable supplies. Since the investment venture is an exempt supply, you are not eligible to claim input tax credits attributable to that supply. 

5. I am a registered VCC and incur entertainment expenses to secure some investment from potential investors. The bill was issued under my company’s name. Can I claim GST on the entertainment expenses incurred?

Since the expenses incurred are attributable to an exempt supply, you are not entitled to ITC.

6. I am a registered VCC and I incur charges on telephone, electricity, rental and other operational expenses that relates to both exempt and taxable supplies. Can I claim ITC on such expenses?

Such expenses are considered as residual charges. You are allowed to claim ITC on residual charges base on apportionment rules. For further details please refer to Guide on Input Tax Credit.

7. I as a registered VCC incurred medical expenses for my employees. Am I entitled to claim ITC on such expenses?   

You are not entitled to claim GST incurred on medical expenses for your employees because it is a block input. For further details please refer to Guide on Input Tax Credit.


Imported Services  

8. What is the GST implication on consultancy services acquired by the registered VCC when he acquires it from overseas and can the VCC claim ITC for this supply?

GST is incurred on imported services. As a recipient, he must account for GST on the imported services as output tax (known as the reverse charge mechanism) in his GST return (GST Form No.3) and pay the related taxes. He is also entitled to claim the output tax as his ITC if the imported consultancy services is attributable in the making a taxable supply, i.e. management services. However, if the imported services are attributable to an investment venture, the VCC is not entitled to claim ITC as it is an exempt supply.

9. Do I have to incur GST on the imported services if I am not a registered person?   

Yes, GST is incurred on the imported services even though you are not registered for GST. You are required to declare and pay output tax on the imported services in the GST Form No. 5. For further details, please refer to the General Guide on Imported Services. 
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L & Co Plt.

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