An Ultimate Guide to GST Filing Singapore in 2023
Goods and Services Tax (GST) is one of the liabilities of Singapore businesses. They must pay the Inland Revenue Authority of Singapore (IRAS) within due dates. And they must be careful in GST filing Singapore so that their GST returns are accurate and timely.
If you are a new business owner, here is a detailed guide to GST filing for your small business in Singapore.
Singapore GST Rate in 2023 and 2024
Today (in 2022), the GST rate is 7%. However, you need to know that Singapore Budget 2022 announced an increase in the GST rate from 7% to 9%. It will come into effect in 2 steps:
- From 1 Jan 2023, the GST rate will be 8%; and
- From 1 Jan 2024, the GST rate will be 9%
What is Singapore GST?
GST or VAT (Value-Added Tax) is an compulsory indirect tax levied on consumption of goods and services in Singapore. As per the GST Act Singapore, it is charged on all local and international sales. It is also levied on imported goods on top of customs and charges.
The introduction of GST enabled IRAS to go from administering multiple tax rates on different commodities to a standard tax rate for all commodities.
Importance of Singapore GST
Singaporean income taxes were high and touched 40%. GST was introduced in April 1994 to reduce the pressure on payers of these direct taxes. GST helped lower corporate and personal income taxes to 17% and 22%, respectively.
How does GST work in Singapore?
A GST-registered company needs to collect GST from its customers. Its invoices to them must show the tax amount. Most pay their GST returns to IRAS monthly or quarterly using an online portal.
When must I register my company for GST?
As per the GST Act , you can compulsorily or voluntarily register your company for Singapore GST. And GST registration depends on the company’s turnover.
I. Compulsory GST registration
You must register for and pay GST if the company’s yearly taxable turnover is above $1 million in a calendar year or is expected to be more than $1 million by the accounting year’s end.
II. Voluntary GST registration
If you suspect your taxable turnover for the year will be more than $1 million, you should register your company for a GST return.
You need the documents listed below:
- Company’s signed contracts/agreements
- Confirmed purchase orders/accepted quotations
- Vendor invoices with fixed monthly chargeable fees
- Income statements details confirming your taxable turnover of over $1 million for the past 12 month
However, file GST returns within the due date or the grace period of one month. After that, you will have to pay the penalty.
Why would you opt for voluntary GST registration
- You may choose voluntary GST registration to earn input tax credits
- You need to stay registered for at least two years
- You must maintain your business records for at least five years for your running or closed business
Exceptions of Compulsory registration
- You can apply for exemption from GST registration if your yearly taxable turnover is generated mainly from zero-rated supplies.
- Your forecast shows the turnover for the next 12 months will be below $1 million. You need supporting documentation.
What is the process of Singapore GST registration?
Before you apply for GST registration, know your:
- Annual taxable turnover
- Compulsory or Voluntary registration
- Business type: Sole proprietorship, partnerships, joint ventures
- Relevant records and documents
Step2#: Overview of GST
You can also take an e-Learning course named ‘Overview of GST’ to know the guidelines and regime. It explains your tax obligations and tax treatment for commodities.
However, you can skip this step if you have managed other GST-registered businesses or are an Accredited Tax Adviser/Practitioner.
Step3#: Online GST application to IRAS
You must apply online for a GST registration number using the MyTax portal by IRAS.
Instructions are as follows:
- Use CorpPass to login on IRAS’ MyTax Portal
- Company’s UEN
- GIRO application form
- GST F3 form for Partnerships and Joint Ventures
- For voluntary registration, submit the GIRO form for GST payment and tax credit
Step4#: Timeline for GST Application Processing
IRAS checks the GST number application form and processes applications for:
- The GIRO form is sent to your bank & takes two to four weeks to process
- Compulsory registration in a week
- Voluntary registration within two weeks
Step5#: Notification for approval
If your documents stand scrutiny, your bank notifies you about the successful registration.
On successful GST registration, IRAS sends a letter to the company’s registered address. It shows:
- Your GST registration numbers
- Your effective date of GST registration
- Voluntary registration within two weeks
Then, you can display the GST number on the company’s invoices, credit notes, and receipts.
Type of supplies in Singapore
Singapore government does not tax all goods and services. And different GST tax rates are applied to various commodities.
1. Standard rate supplies cover
- The regular sale of goods and services
- Imported goods and services
- The GST rate is 7%
2. Zero-rated supplies cover
- Exports of goods
- International services to foreign clients
- Lease of specific aircraft, machinery and tools
- The GST rate for zero-rated supplies is 0%
3. Exempt supplies cover
- Exempt supplies are listed in the Fourth Schedule of the GST Act
- Sale and purchase of unfurnished residential properties
- Import and local consumption of valuable metals
- Certain financial services
- GST applied to these supplies and services is 0%
4. Out-of-scope supplies cover
- Goods imported from one & later exported to another country
- Private transactions carried out outside of Singapore
- GST rate applied to out-of-scope supplies is 0%
GST Assisted Self-help Kit
GST ASK is an IRAS’ program to help companies in self-assessment of their final GST filing Singapore.
With this self-help kit, you can identify and correct errors before the final submission. The benefit is accurate GST filing and a chance to get concessions under the Voluntary Disclosure Program (VDP).
Key elements of GST Assisted Self-help Kit (ASK)
The GST ASK helps you to determine if there are any flaws in the filing.
Step1#: GST practices
If you are a new business:
- Understand the purpose of GST filing, standard internal GST procedures, general guidelines and rules
- Check, if your internal GST processes cover people, record-keeping, systems, and internal controls
Step2#: Pre-filing checklist
- Pre-filing checklist has questions that enable you to discover errors in submissions
- The checklist lays open GST requirements for the companies registering for GST for the first time
Step3#: ASK Annual Review
- ASK Annual Review enables companies to find errors in their past GST returns
- Search for duplicate or omitted transactions
- Report errors to IRAS
- Correct errors as under IRAS’ guidance
Benefits of GST Registration Singapore
It is wise to apply and get a GST registration number for your company. The benefits are as follows:
Singapore is home to numerous companies. And establishing your identity has become crucial. Your customers can search and locate your business using your GST registration number.
They can also go through your GST certificate and verify what you do. This legal document can help build trust in your business.
Increased Cash Inflow
Being a GST-registered company means passing a threshold. Your company starts to be known as a brand. It attracts more customers and profit. Your cash flow rises, giving you opportunities to expand.
Lower the cost of doing business
You have to pay input GST on purchasing raw materials, services, or products for your company. It allows you to lower the cost of doing your business. Only GST-registered companies can claim it.
Tips for Filing GST Returns
It would be best if you were consistent with your GST filing Singapore. Here are some tips for filing GST returns to the IRAS.
- File your GST returns as per your monthly or quarterly schedule
- The deadline for GST filing Singapore is one month from the end of your accounting cycle
- Login to the MyTax portal and file your GST return online
- Disclose details about the company’s sales/purchases and imports/exports on the GST return form
- Keep supporting documents handy
- Calculate your Net GST by deducting the input tax from the output tax.
- File your GST return even if it is ‘NIL’
Penalties for violating GST rules?
- You will need to pay the penalty if you fail to pay GST within the due date. It will be 5% of your Net GST
- If you fail to pay even after 60 days, you will have to pay an additional 2% over the existing penalty
- If you fail to file GST returns, you get a ‘Notice of Assessment’ from IRAS. There is a 5% penalty on the estimated tax
- IRAS penalises you $200 every month for non-clearance of dues
- You may have to pay $10,000 in penalty
7 GST schemes in Singapore
Singapore has many GST schemes to assist businesses. They enable manufacturing companies and new SMEs to increase productivity and market their products.
- Gross Margin Scheme
- Major Exporter Scheme
- Hand-Carried Exports Scheme
- Zero GST Warehouse Scheme
- Licensed Warehouse Scheme
- Cash Accounting Scheme
- Discounted Sale Price Scheme
A detailed guide to GST filing such as this can simplify your task. If you still are struggling with your GST filing Singapore, you can outsource it to a third party. A GST filing services firm like SBS Consulting Pte Ltd can prepare ready-made and accurate GST reports for you to file with IRAS.