Filing and Registering for GST in Singapore

Photo by Clay Banks on Unsplash

Singapore consistently ranks as one of the best places in the world for ease of doing business – one of the major factors being the relatively low tax rates compared to the rest of the world, even with upcoming increases over the next two years. GST was first introduced to Singapore in 1994 to serve as a tax on consumer spending – something that everyone encounters going about their daily lives here, as all businesses set up in Singapore are required to include the 7% GST charge on the sale of all goods and products (set to increase to 8% on 1 January 2023).

Overview of GST

Let’s start by looking at the basics: what exactly is GST? As the full name (goods and services tax) suggests, GST is the fee charged on nearly all goods and services, to shift Singapore’s reliance from direct taxes to indirect taxes.  

·       Direct Taxes are taxes that are directly paid to the Government by the taxpayer. These are taxes on individuals and organisations applied directly by the Government, such as income tax, corporation tax, and wealth tax.

·      Indirect Taxes are applied on the manufacture or sale of goods and services. These are initially paid to the Government by an intermediary, who then adds the amount of the tax paid to the value of the goods or services and passes on the total amount to the end user.

So how does this impact you, if you own a business in Singapore? There are two key steps to be aware of: registering and filing.

Registering For GST

All businesses in Singapore must register for GST when their taxable turnover (how much money the company makes) exceeds S$1 million for the previous twelve months, or if they expect the taxable turnover in the next 12 months to be more than S$1 million. In either scenario, businesses should be prepared to provide substantial documentation to the IRAS (The Inland Revenue Authority of Singapore, which gathers tax for the Government). 

The GST registration process differs slightly depending on the type of registration and constitution of your business, so it’s best to plan ahead when applying for GST registration and be aware of the steps involved, including:

·       Step One: Determine the type of GST registration required: retrospective view (the taxable turnover for the past four quarters) or prospective view (making or having the intention to make taxable supplies).

·       Step Two: Complete the required e-learning course (only for voluntary registration).

·       Step Three: Submit your application for GST registration.

Once your GST registration application has been proceed, you will receive notification of the effective date of registration.

Exemption From GST Registration

Businesses may qualify for exemption from registration if they meet both of these conditions: 

a.     The proportion of zero-rated supplies over total taxable supplies exceeds 90%

o   Total taxable supplies refer to the summation of standard-rated supplies and zero-rated supplies (items bought overseas), but exclude the following that has been reported as standard-rated supplies: 

a.     The value of relevant supplies received from the supplier that was subject to customer accounting; and

b.     The value of imported services subject to reverse charge.

b.     The company would have been in a net refundable position if it had registered for GST

o   Net refundable position refers to when the output tax chargeable is less than the input tax claimable on imports and or purchases from GST-registered suppliers.

Filing Your GST Return

GST returns (GST F5) must be submitted quarterly, online through IRAS. In order to file, businesses need to note their total sales amount (from the previous quarter), GST received, and GST paid. If you or your company earn overseas, but you or the company spends locally, you can get also get a tax refund from IRAS.

If you have any questions about GST or how to go about setting up a company, get in touch with Accela Finance for help: [email protected].