GST Singapore – Goods and Services Tax Guide
Goods and Services Tax is an indirect tax that enables Singapore to lessen its dependence on the revenues from the direct taxes. Singaporeans pay this tax on the import of goods and on the purchase of goods and services in Singapore. The current rate of GST Singapore is 9%. GIRO is a preferred facility for electronic cashless GST tax payments in Singapore.
GST Singapore, the abbreviated form of Goods and Services Tax Singapore, is an indirect tax levied on the supply of goods and services in Singapore and import of goods into Singapore. Value Added Tax (VAT) is the terminology used in many other countries, which actually has a similar tax structure as that of GST, but with a different name. April 1, 1994, marked the beginning of a new era in Singapore taxation system by introducing Goods and Services Tax. As of now, GST Filing rate is fixed at 9%.
With an aim to shift the focus from direct taxes to indirect taxes, the Singapore government introduced the concept of GST Registration Singapore. Having one of the most attractive and flexible tax systems in the world; in all these years, Singapore has been successful in keeping GST as well as income tax rates low and stable. Remember, GST is levied on consumption and not on income. Therefore, it becomes necessary for traders to initiate GST Quarterly Filing on a regular basis, if their turnover is more than S$1 million.
Types of GST Registration in Singapore
Remember, GST is levied on consumption and not on income. Therefore, it becomes necessary for traders to initiate GST Registration process and GST Filing on a regular basis, if their turnover is more than S$1 million.
Compulsory Registration: GST registration is compulsory
- When you are selling taxable goods and services with an annual turnover exceeding S$ 1 million in past 12 months
- You reasonably expect, your business turnover will exceed S$ 1 million SGD in the next 12 months.
Voluntary Registration: You may apply the voluntary GST registration when
- You are not liable to register GST compulsorily and your annual business turnover is less than 1 million SGD
- Your businesses are involved in selling or offering “Zero-Rated Supplies”, i.e. supplying goods and services in the international markets
Please Note: You may voluntarily register for Goods and Services Tax collection with the Comptroller of GST. However, the comptroller holds the authority of approval of voluntary GST registration. Upon approval by the Comptroller of GST, you will have to register for a period of two years.
If you do not have GST registered business, you are not eligible to claim GST Singapore incurred on your business purchases.
Procedure of GST Registration
We assist our clients in GST registration in 2 ways. We use IRAS’ myTax portal or submit paper form(s) to authorities on their behalf.
The compulsory GST registration process takes 2-3 days. The voluntary process needs up to 10 days. Upon successful registration, IRAS sends an approval letter stating the GST registration number, its effective date, GST filing due dates, etc.
When to File GST Return?
It is mandatory to e-file your GST return and pay the tax due within prescribed due dates. GST return and payment should be made within one month after the end of the accounting period. If you have no business activity during the accounting period, you must file ‘Nil’ GST return. Depending on the needs, we at SBS Consulting offer monthly, quarterly and annual GST filing services at affordable rates to the local and foreign clients.
Advantages of registering for GST
- When you own a GST registered business, you can claim the GST incurred on your business purchases.
- If your paid tax exceeds the collection amount, you can claim the difference from the Inland Revenue Authority of Singapore (IRAS) for GST refund.
Work methodology
GST is a broad-based tax that is levied on the import of goods and almost all supplies of goods and offering of services in Singapore.
The exempted services are related to finance sector and sale or lease of residential property. GST which is also known as Value Added Tax in many country is zero-rated on the export of goods and services internationally.
How to determine the liability for GST registration
The GST registration liability is determined using two views Retrospective and Prospective.
| (A) Retrospective View | (B) Prospective View | |
| Your liability will arise if: | At the end of any quarter*,where the total value of all your taxable supplies made in Singapore in that quarter and the previous 3 quarters is more than S$1m. If you expect that the value of your taxable supplies in the next 4 quarters will not be more than S$1m, you are not required to be registered. However, please note that if the value of your taxable supplies for the next 4 quarters subsequently is more than S$1 million, the Comptroller will backdate your GST registration. | At any time, if there are reasonable grounds for believing that the total value of your taxable supplies in the next 12 months will be more than S$1m. You must be currently making taxable supplies to come under this basis. Otherwise, you should apply for voluntary registration. |
| You are required to apply for GST registration: | Within 30 days of the end of that relevant quarter*. | Within 30 days from the date on which you made a forecast that your taxable turnover for the next 12 months will be more than S$1m. |
| Your date of registration and singapore tax filing will be from: | End of the month following the month in which the 30th day falls. | End of 30 days from the date of your forecast. |
Table credit: IRAS
*Quarter is a period of 3 months which ends on the last day of the months of March, June, September, and December.
What types of Goods are subjected to GST Singapore?
Almost all the types of goods and services are taxable supplies, thus are liable for GST Filing. However, the Singapore taxation law exempts certain types of goods and services from GST. Examples include financial services, importation and local supply of investment precious metals and selling or leasing out residential property.
GST Related Scheme
There are several GST related schemes to assist businesses in order to ease the cash-flow for them. Such as, GST Assistance Scheme, Major Exporter Scheme (MES), Licensed Warehouse Scheme, and Zero GST Warehouse Scheme (ZGS).
Goods & Services Tax Assistance Scheme
This scheme targets small and medium enterprises (SME) that choose to register voluntarily for GST Singapore. The companies must improve their accounting system in compliance with GST rules and regulations.
Major Exporter Scheme (MES)
This scheme is for those businesses who have a substantial amount of import and export of goods. The MES eases the cash flow of businesses. If you are under the MES, GST Singapore is suspended on the import of non-dutiable goods.
Licensed Warehouse Scheme
You have the flexibility of storing your dutiable goods in a licensed warehouse, if you are under the Licensed warehouse scheme. Until and unless the goods are released for sale in Singapore, you are not liable for duty or GST.
Zero GST Warehouse Scheme (ZGS)
Your business can have the transition into zero GST warehouses wherein there would be not involvement of red-tapism.
