What is GST bad debt relief?

A way to recover the GST you paid to the tax authority on an invoice the customer never paid.

When can I claim bad debt relief in Singapore?

Once the debt is written off in your accounts, 12 months have passed since the date of supply or the debtor is insolvent, and you have taken reasonable steps to recover it.

How long do I have to claim?

In Singapore, 5 years from the date of supply. In Malaysia, six years from paying the service tax.

Can I claim bad debt relief on the cash basis?

No in Australia, and in New Zealand not on the payments basis apart from limited cases. On a cash basis, tax follows the payments you receive, so an unpaid amount carries no tax to recover.

What counts as a bad debt for consumption tax in Japan?

One of the events the rules recognise, such as a court-approved plan that cuts off the claim or a debtor clearly unable to pay in full. Keep the documents that prove it.

What if the customer pays after I claimed relief?

You pay back the tax in proportion to what you recover.

Bad debt relief

Copy for AI

When you invoice on the accruals basis, you pay the tax on a sale before the customer pays you. If the customer never pays, bad debt relief lets you recover the tax you paid on the unpaid part, under conditions. This page compares those conditions. It is general information, not tax or legal advice: check the sources at the end or ask your accountant before you rely on it.

In short

Country	Main conditions	Time limit
Singapore	Written off in your accounts; 12 months from the date of supply, or the debtor insolvent sooner; reasonable steps taken to recover	Claim within 5 years of the date of supply
Australia	Written off as bad, or overdue for 12 months or more; not on the cash basis	—
New Zealand	Actually written off, not just provided for; not on the payments basis, with limited exceptions	—
Japan	One of the events the law lists, such as a court-approved cut-off or a debtor clearly unable to pay	—
Malaysia	Written off as a bad debt, and all reasonable efforts made to recover it	Within 6 years of paying the service tax

If the customer pays later, you pay back the tax you recovered. Hong Kong and Brunei have no sales tax; there a bad debt is an income-tax deduction instead.

Country by country

Singapore

A GST-registered supplier may claim bad debt relief to recover the output tax already paid to IRAS. The conditions include that you supplied goods or services for money and accounted for and paid GST on the supply, wrote off the whole or part of the debt in your accounts, 12 months have passed since the date of supply or the debtor became insolvent sooner, and you took reasonable steps to recover it. The value of the supply must not exceed its open market value and, for goods, ownership must have passed to the customer. You claim within 5 years of the date of supply, in Box 7 of the GST return with Box 11 marked “Yes”. When the customer pays you later, you repay the GST to IRAS.

Hong Kong

There is no sales tax. For profits tax, bad and doubtful debts are deductible, and any later recovery is income when received.

Australia

You have a decreasing adjustment of one eleventh of the debt when you write it off as bad, or when it has been overdue for 12 months or more. The adjustment is not available if you account on a cash basis. Recovering the debt later gives an increasing adjustment.

New Zealand

On the invoice or hybrid basis you may claim an adjustment of three twenty-thirds of the amount written off, in the period you write it off. The debt must actually be written off; a provision for bad debts is not enough. Keep a record of the steps you took to recover it. If you recover the debt later, you account for three twenty-thirds of what you recover.

Japan

Consumption tax on a bad debt is deducted in the period in which the bad debt occurs. The National Tax Agency gives as its main examples events such as a reorganisation or rehabilitation plan that cuts off the claim, a debtor clearly unable to pay in full, a cut-off agreed at a creditors’ meeting, or a written waiver after the debtor has been unable to pay for a long period. The deduction is available only when one of the events the rules recognise has occurred; keep the documents that prove it.

Malaysia and Brunei

For Malaysian service tax, you may claim a refund of the tax when the debt is written off in your accounts as a bad debt and the Director General is satisfied that you made all reasonable efforts to recover it. You claim within six years from the date you paid the service tax. If the customer pays later, you repay a proportion. Brunei has no GST or VAT; bad debts are deductible for income tax, and a later recovery is income.

In easySales

Select Write off as bad debt… in the invoice’s ··· menu, enter the amount, date and Reason, and describe the Steps taken to recover the debt. See Chase overdue invoices.
The Bad debt relief panel shows a Status (Eligible, Not yet, Not applicable or Not judged), Claimable from, Claim by and the Tax portion under your country’s rules, and keeps that judgement with the write-off.
When the customer pays after all, select Record recovery on the Bad debt tab; the relief claimed is repaid in proportion.
A write-off is not a credit note: the customer is not told and still owes the money.

Examples

Lim & Co invoiced Kopi Corner SGD 1,090.00 (SGD 1,000.00 plus GST of SGD 90.00) on 15 August 2025 and paid the GST to IRAS. The shop has ignored reminders and a letter of demand. On 29 September 2026, more than 12 months after the date of supply, Mei Tan writes off the full amount. Lim & Co claims SGD 90.00 of bad debt relief in its next GST return, well within 5 years of 15 August 2025.

If Kopi Corner later pays SGD 545.00, half of the debt, Lim & Co repays SGD 45.00 of GST to IRAS.

Common questions

What is GST bad debt relief? A way to recover the GST you paid to the tax authority on an invoice the customer never paid.
When can I claim bad debt relief in Singapore? Once the debt is written off in your accounts, 12 months have passed since the date of supply or the debtor is insolvent, and you have taken reasonable steps to recover it.
How long do I have to claim? In Singapore, 5 years from the date of supply. In Malaysia, six years from paying the service tax.
Can I claim bad debt relief on the cash basis? No in Australia, and in New Zealand not on the payments basis apart from limited cases. On a cash basis, tax follows the payments you receive, so an unpaid amount carries no tax to recover.
What counts as a bad debt for consumption tax in Japan? One of the events the rules recognise, such as a court-approved plan that cuts off the claim or a debtor clearly unable to pay in full. Keep the documents that prove it.
What if the customer pays after I claimed relief? You pay back the tax in proportion to what you recover.

Sources

Last checked: 21 October 2026.