IRAS’s GST ACAP Renewal, Seventh Edition (1 September 2026): What Changed for Partial Exemption and Technical Clarification Requests

On 1 September 2026, the Inland Revenue Authority of Singapore (IRAS) published the seventh edition of its e-Tax guide, GST: Renewal of Assisted Compliance Assurance Programme (ACAP) Status. For GST-registered businesses holding ACAP status, or preparing for their next renewal review, this update matters more than most routine e-Tax guide revisions. It rewrites Appendix 1 of the guide, the ACAP Renewal Review Guidance, and touches three areas that go to the heart of how an ACAP-status company demonstrates continued control over its GST reporting: the application of partial exemption rules to input tax recovery, the information a business must now include in its ACAP Renewal Report, and the procedure for seeking technical clarification specifically of an ACAP Reviewer’s findings.

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This article looks closely at what changed, why it matters for partially exempt businesses in particular, and what an ACAP-status company (or one weighing whether to apply) should do differently from now on. It goes beyond the general update on IRAS’s revised GST technical clarification guidelines effective from 1 September 2026, which covers economy-wide clarification requests. The seventh edition ACAP renewal guide is narrower and more technical: it is about how an ACAP Reviewer’s own findings get challenged or clarified during a renewal review, and about the specific input tax recovery mechanics that come up when a partially exempt business is under ACAP.

A quick refresher: what ACAP is and why renewal matters

ACAP is IRAS’s voluntary compliance initiative, described on the IRAS Assisted Compliance Assurance Programme (ACAP) webpage, under which a GST-registered business commissions an independent, comprehensive self-review of its GST controls, covering entity-level controls, transaction-level controls, and reporting-level controls, using IRAS’s ACAP methodology. A business that passes the review and meets IRAS’s benchmarks is awarded ACAP status, which typically comes with tangible benefits: reduced IRAS audit intervention, faster GST refunds, and streamlined treatment for certain scheme renewals. ACAP status is not permanent. It is awarded for a fixed period and must be renewed, which means going through a further review, known as the ACAP Renewal Review, before the existing status lapses.

Because ACAP status is a control-based certification rather than a one-off compliance check, the renewal review looks not just at whether errors occurred, but at whether the underlying GST control framework has remained robust as the business’s transactions, systems, and personnel have changed since the last review. Businesses that first registered for GST voluntarily, whether under the standard compulsory versus voluntary registration rules or after weighing the pros and cons of voluntary GST registration, often reach ACAP maturity only after several years of stable, well-documented GST processes. The seventh edition changes what “well-documented” now means for partially exempt businesses at renewal.

What actually changed in the seventh edition

Based on the updated Appendix 1 of the GST: Renewal of Assisted Compliance Assurance Programme (ACAP) Status (Seventh Edition) e-Tax guide, published on the IRAS voluntary compliance initiatives page, three changes stand out.

1. Clarified application of partial exemption rules to input tax recovery

Partially exempt businesses, those making a mix of taxable and exempt supplies (most commonly financial institutions, holding companies with exempt interest income, or real estate entities with exempt sales), cannot recover all of their input tax. They must apportion input tax between what is directly attributable to taxable supplies (recoverable), what is directly attributable to exempt supplies (not recoverable), and a residual pool that must be apportioned using an approved formula, typically the standard input tax recovery formula, or a special input tax recovery formula approved by IRAS.

The seventh edition sets out more explicitly how the ACAP Renewal Reviewer is expected to test this apportionment during a renewal review. Rather than simply confirming that a partial exemption calculation exists, the Reviewer must now be satisfied that the controls generating the apportionment, the tagging of input tax at transaction level, the treatment of de minimis exemptions, and the basis for any residual input tax formula, have themselves remained sound and consistently applied across the review period. In practice, this means an ACAP-status business with exempt supplies should expect the renewal review to probe deeper into how its accounting system codes input tax by supply type, not just whether the final recovery percentage looks reasonable.

2. Additional information required in the ACAP Renewal Report

The guide also expands what must go into the ACAP Renewal Report itself. Businesses preparing for renewal should now expect to document, in more granular form, how partial exemption calculations were tested as part of the self-review, alongside the existing requirements covering entity, transaction, and reporting-level controls. Where a business’s exempt supplies are material, the Renewal Report needs to show its workings, not merely assert that the input tax recovery rate is correct.

3. New procedure for technical clarification of an ACAP Reviewer’s findings

Perhaps the most operationally significant change is procedural. Where a business or its ACAP Reviewer disagrees with, or is uncertain about, a finding raised during the renewal review, for example, a proposed adjustment to the partial exemption recovery rate, the seventh edition sets out what information must accompany a request to IRAS for technical clarification of that specific finding. This is a narrower, more targeted process than the general GST technical clarification request procedure, which was itself overhauled from 1 September 2026 to specify what any taxpayer must include when asking IRAS to confirm the GST treatment of a transaction. The ACAP-specific version applies only in the renewal review context, where the question is not “what is the correct GST treatment” in the abstract, but “is the Reviewer’s finding on our specific facts correct.”

Before and after: partial exemption treatment at renewal

The ACAP renewal cycle: where the seventh edition fits

What ACAP-status businesses should do now

For any GST-registered business with ACAP status, or one due for renewal in the next twelve months, the practical response to the seventh edition falls into three parts.

First, if the business is partially exempt, it should revisit how input tax is tagged at the point of transaction entry, well before the renewal review begins. Reviewers will now be testing this more closely, and retrofitting proper coding across a review period after the fact is far harder than building it into the accounting workflow from the outset. Businesses that are still working through GST registration decisions, whether they must register compulsorily or should register voluntarily, or that are weighing the compulsory versus voluntary registration thresholds, should factor future ACAP eligibility into how they design their GST control framework from day one, rather than treating it as a later add-on.

Second, the finance and tax team preparing the ACAP Renewal Report should build in time to document the partial exemption testing methodology in the detail IRAS now expects, rather than leaving this to the final drafting stage. A report that simply states a recovery rate without showing how it was tested is more likely to generate a finding that then needs clarification, which adds time to the renewal timeline.

Third, where a Reviewer’s finding is genuinely in dispute, the business should follow the new information requirements for a technical clarification request precisely, in the same way it would follow the broader requirements under IRAS’s revised GST technical clarification guidelines for any other GST query. Incomplete or informally framed clarification requests are more likely to be sent back for further information, which delays resolution of the renewal itself.

More broadly, this update is a reminder that ACAP status is not a badge that, once earned, can be left unattended. IRAS is visibly tightening how renewal reviews test the technical mechanics behind self-assessed compliance, starting with partial exemption, an area that has always been one of the more error-prone corners of GST for financial and property-holding businesses. Businesses that are also preparing for a routine IRAS tax audit will recognise the pattern: IRAS increasingly expects documented, testable controls rather than end-of-year assertions, whether the review in question is a tax audit or an ACAP renewal.

Getting the renewal right the first time

The seventh edition of the ACAP renewal e-Tax guide is a narrow but consequential update. For businesses without material exempt supplies, the practical impact may be limited to a slightly more detailed Renewal Report. For partially exempt businesses, financial institutions, holding companies, and real estate entities among them, it raises the bar on how input tax recovery is tested and documented, and it gives both the business and its Reviewer a clearer path when a finding needs to be clarified rather than simply accepted or disputed informally.

Businesses that hold ACAP status can consult IRAS’s ACAP guidance page directly for the latest e-Tax guide editions before their next renewal review is scheduled.

Raffles Corporate Services regularly assists Singapore companies with GST registration decisions, ongoing compliance, and ACAP readiness, including partial exemption reviews ahead of a renewal. If your business holds ACAP status, is due for renewal, or is assessing whether ACAP is worth pursuing given its mix of taxable and exempt supplies, get in touch with our team to discuss how the seventh edition changes apply to your specific position.

The Editorial Team, Raffles Corporate Services