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. In other countries, it is known as VAT (Value Added Tax).
GST Singapore stands for Goods and Services Tax Singapore. It is charged on the supply of goods and offered services in Singapore. This tax is also charged on goods imported in Singapore. It is known as VAT (Value Added Tax) in many other countries. The current rate of Goods and Service Tax Singapore is fixed at 7% for GST filing.
The aim behind introducing GST Registration Singapore was to enable country to shift the focus from direct taxes to indirect taxes. Because of lower GST rates in Singapore the income tax rates are also lower. GST quarterly filing is necessary for traders having turnover more than S$1 million. It is not a tax levied on income but a tax on consumption.
What type of Goods are subjected to GST Singapore?
All types of goods and services are taxable supplies and are subjected to GST. However, Singapore taxation law exempts certain types of goods and services from it such as offering financial services, importation and local supply of investment precious metals and selling or leasing out residential property.
Is registration compulsory for GST Singapore?
If you are in the business of selling taxable goods and services, and the turnover for past 12 months has exceeded S$1 million, or you can reasonably expect the turnover of your business in the next 12 months to be more than S$1 million, then registration of Singapore GST and Singapore tax filing is compulsory for your business. However, there is a term of ‘zero-rated supplies’ in which the requirement of registering for it is waived off, if most of the goods and services are supplied or exported in the international markets.
Voluntary GST registration
You may also 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. You must have to be registered for a period of two years, once you have got the approval.
If you don’t have GST registered business, you are not eligible to claim GST Singapore incurred on your business purchases.
Who are eligible for GST registration for Singapore Tax filing?
- Sole Proprietors
- Limited Liability partnerships
- Company owners
- Clubs and associations
- Statutory bodies
- Government bodies
- Nonprofit organizations
- Management institutes, corporations, and organizations
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.
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.
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 the small and medium enterprises (SME) who register their business for voluntary GST for singapore tax filing. The set ups may 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.