Under Singaporean law, expenses related to the termination of business activities are considered business expenses. If a GST-registered business was making only taxable sales before winding-up its business, it would be allowed to claim full GST credits on termination expenses since these expenses are attributable
to that fully taxable business. If the business made both taxable and exempt sales before its winding-up, and there is no taxable sale in the prescribed accounting period when the termination expenses are incurred, the business is able to claim such GST as residual credit based on its GST credit recovery formula. GST incurred on non-termination expenses is not claimable unless the expenses are directly attributable to the making of taxable sales.
Source KPMG
