Claiming input tax incurred to make exempt supplies

Key requirements

Exempt supplies must average no more than S$40,000 per month and be no more than 5% of relevant taxable plus exempt supplies. Exclude the specified customer-accounting, reverse-charge and OVR marketplace amounts from the test. Passing permits provisional recovery subject to other blocked-tax rules and a longer-period adjustment. Failing prevents recovery of directly exempt-related input tax and requires apportionment of residual costs. Use attribution first, then the prescribed calculation; a low exempt-income amount alone does not satisfy both limits. Retain the period and longer-period workings so a later mix change can be reflected.