If a director’s other business invoices the company, check the supplier identity and actual supply before claiming input tax. Common ownership does not make the two businesses interchangeable. The invoice should reflect who supplied what to whom.
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IRAS’s input tax conditions require appropriate supporting documents and satisfaction of the applicable claiming requirements. A line labelled “GST” is not sufficient by itself.
Identify the supplier’s legal business
Compare the contract, quotation, invoice and payment instructions. Establish whether the supplier is a company, sole proprietorship or another structure, and confirm the relevant registration details. A trading name may differ from the legal party.
Where the director has several businesses, ask which one undertook the work. Do not accept a different entity’s GST registration number simply because the director controls both.
Example: the contract and invoice name different suppliers
The company agrees to buy services from the director’s consultancy company, but receives an invoice bearing the director’s unrelated trading business details. Investigate the discrepancy and obtain accurate documentation. Do not edit the supplier’s PDF internally to make the names agree.
Verify the actual supply
- The agreed goods or services.
- Who performed or supplied them.
- The recipient and business purpose.
- The price and relevant related-party arrangement.
- The invoice and supplier GST details.
- Delivery or completion evidence and payment.
If another entity performed the work, establish the subcontract or other arrangement. A payment to a director-controlled business without a clear supply needs more explanation than a standard expense code.
Check the invoice and registration position
Review the invoice details against IRAS’s requirements and confirm the supplier’s applicable GST status. If material information is missing or wrong, ask the actual supplier for a valid correction. Preserve the original and corrected versions so the change remains traceable.
Do not assume the company can claim input tax solely because it paid a gross amount containing GST. Review the business-use and other conditions that apply to the purchase.
Review governance and income tax separately
The director’s interest in the supplier can raise approval and disclosure questions. Give the company secretary and legal advisers the actual relationship and transaction terms. A valid tax invoice does not automatically resolve those governance issues.
Review the company’s expense deduction and relevant related-party pricing separately from GST. Keep an explanation of the business need, work performed and price rather than relying only on the parties’ relationship.
Build a repeatable check for future invoices
Maintain an approved supplier record with the correct entity details and evidence. When staff receive an invoice from a related business, compare it with that record and the actual contract. Escalate changes instead of copying last month’s tax code automatically.
Reconcile any corrected invoice or credit to the ledger and relevant return. If a prior claim was wrong, review the proper correction process rather than merely changing the supplier name for future purchases.
Does common ownership allow invoices to move between businesses?
No. Establish the actual supply and parties; ownership alone does not answer that question.
Should staff amend an incorrect supplier invoice themselves?
Request an accurate document from the supplier and retain the correction trail.
Further company tax and accounting resources
Explore our corporate tax filing guide, bookkeeping error checks and related-party transaction guidance.
Get help reviewing the tax file
For company accounting or tax advice, email Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Our accounting team and tax advisers can review your circumstances. Where contractual or other legal advice is needed, advisers from our associated law firms can assist.