Effective 1 January 2021, the Comptroller of GST (CGST) is authorised to deny input tax claims made by a GST-registered business (GRB) if the business knew or should have known that the purchases were a part of an Missing Trader Fraud (MTF) arrangement.
The biggest challenge faced by businesses is being caught unawares on their involvement in MTF, by IRAS. Hence, on 10 February 2021, IRAS released a new e-tax guide on “Due diligence checks to avoid being involved in Missing Trader Fraud” to provide GRBs a structured guide on the implementation of due diligence checks to protect their input tax claims, whilst avoiding the risk of MTF involvement. As this new law affects all businesses, it is crucial to be updated on this latest development and be compliant with IRAS requirements.
This timely and imperative GST workshop is led by expert speakers Liu Hern Kuan and Catherine Chiang. Liu Hern Kuan, who currently represents clients affected by MTF, will outline legal and practical issues surrounding MTF and carousal fraud, including when a supplier knew or should have known that a supply was part of a fraudulent arrangement under the current law and under the new framework. Relevant case law will be discussed. Catherine will speak from a GST operations perspective and will provide insights on the reasonable steps and risk controls required to be put in place by GRBs to protect their input tax claims, and from potential MTF exposure.
A Highlight of Key Areas:
Introduction to Missing Trader Fraud ("MTF") and Carousal Fraud
- What is MTF and Carousal Fraud?
- Illustrations of the different arrangements
- Two Parts of the Chain: Input Tax and Zero-Rating
- The Legislative Amendments
The new IRAS e-tax guide on Due Diligence Checks to Avoid being involved in an MTF
- The “Knowledge Principle”
- Three-pillar approach for applying the “Knowledge Principle”
- Supporting documents
Denial of Input Tax Claim: Law Applicable
- The Pre-Amendment Position
- The UK/ EU Position
- The New Legislation
- Appeal process to the GST Board of Review
Criminal Prosecution Liabilities
- GST offences applicable
- Criminal prosecution process
- Sharing of Legal cases on MTF
Q&A