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An ACAP renewal partial exemption review file should reconcile exempt supplies, residual input tax, De Minimis tests, errors and follow-up actions.
An ACAP renewal partial exemption review should reconcile exempt supplies, directly attributable input tax, residual input tax, the De Minimis Rule and any required longer-period adjustment. IRAS amended its ACAP renewal guidance on 1 September 2026 to clarify that renewal reviews should include the application of partial exemption rules for partially exempt businesses.
The review file should not be a fresh summary of the law. It should show how the business’s transactions, tax codes, calculations and controls produced the amounts reported in the selected review period.
Confirm whether the business is partially exempt
Identify exempt supplies made during the Review Year and the business activities that produced them. Common examples can involve financial services, residential property, investment precious metals or digital payment tokens, but the actual GST treatment depends on the transaction and current law.
Distinguish active exempt business activities from incidental or regulatory supplies where the rules treat them differently. Do not infer the classification from an accounting code alone.
Reconcile the exempt-supply population to the general ledger and GST returns. Explain exclusions, reversals and manual adjustments.
Map input tax by use
The IRAS input tax guidance for exempt supplies requires businesses to consider how costs are attributable. Divide input tax into costs used for taxable supplies, costs used for exempt supplies and residual costs used for both.
Document the tax code, account, supplier, nature of cost and attribution decision. A cost centre may help, but it does not by itself prove use. Interview the process owner where the invoice description is unclear.
Test recurring high-value costs and manual journals. Property costs, finance-system fees, professional services and shared overheads often require more explanation than ordinary purchases.
Reperform the partial exemption calculation
Recalculate the recoverable residual input tax using the method that applies to the business. Tie the numerator, denominator and input tax pool to source records. Preserve the formula and any approved special method.
Do not use a rounded management percentage where the GST calculation requires transaction data. Investigate negative values, large period-to-period movements and amounts posted outside the normal return process.
Compare the result with the GST return. Record every difference, whether it arises from timing, classification, a spreadsheet error or a return adjustment.
Test the De Minimis Rule separately
The existing Singapore GST De Minimis Rule guide explains the two-limb test. In the ACAP file, show the actual exempt input tax and relevant total input tax for each required period rather than stating that the business normally passes.
Check whether a large transaction or year-end entry changed the result. If the test is not met, confirm that the business restricted the affected input tax correctly.
Where an annual or longer-period adjustment applies, connect it to the provisional period calculations and the return in which the adjustment was made.
Review the control, not only the arithmetic
The IRAS ACAP page describes controls at entity, transaction and GST reporting levels. For partial exemption, identify who recognises exempt activity, assigns tax codes, maintains the calculation and reviews the return.
Walk through one transaction from contract to invoice, ledger, GST listing, calculation and return. Note any spreadsheet download, manual reclassification or system limitation that can change recovery.
If the business introduced new software, outsourcing or a shared service centre, explain the change and test the affected controls. IRAS identifies major process changes as a reason for control testing during renewal.
Build an exception and error record
| Review area | Evidence | Follow-up |
|---|---|---|
| Exempt supplies | Ledger and GST return reconciliation | Resolve missing or miscoded items |
| Attribution | Invoices, cost use and tax codes | Correct unsupported recovery |
| Residual pool | Calculation and method | Explain movements and differences |
| De Minimis | Period and annual tests | Record pass, failure or adjustment |
| Controls | Walk-through and reviewer evidence | Assign remediation owner |
Connect errors to the correct response
Quantify each error by accounting period and return. Determine whether it should be corrected by GST F7 or under an available administrative concession. Preserve the calculation, approval and filing acknowledgement.
The IRAS ACAP renewal guide explains the renewal process, Review Year, test period, deliverables and follow-up on findings. It also says businesses should maintain the relevant reports and appendices even where they are not submitted by default.
Where the treatment remains technically uncertain, prepare a focused request using IRAS’s current technical-clarification instructions. Do not hide an unresolved point inside a general controls observation.
Give the independent reviewer a traceable pack
Index the contracts, invoices, transaction listings, calculations, GST returns, control evidence and error schedules. Use stable references so the reviewer can move from a sample to the return without asking the business to rebuild the file.
Record management’s representation separately from independent evidence. A process owner’s explanation can clarify use, but it should not replace the invoice, system record or reconciliation.
Keep personal and commercially sensitive data to what the review needs. Apply access controls and retention rules to the working papers.
Close findings before the renewal declaration
Assign every gap an owner, action, due date and evidence of closure. Distinguish a corrected return from a fixed control. Both may be needed.
Have finance, tax and the independent reviewer agree the final population and outstanding matters. Management should understand any qualification, unresolved treatment or ongoing monitoring before approving the renewal submission.
The Singapore tax compliance workflow is the pillar cornerstone. The GST technical clarification guide covers uncertain treatments. The technical request evidence guide covers record retention. The Corporate and International Tax Consulting hub connects the library.
The strongest renewal file lets a reviewer reproduce the result. It shows the exempt supplies, every attribution decision, the residual calculation, the De Minimis tests, the reported amounts and the action taken when a control or return was wrong.