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Goods and Services Tax (GST)
Goods and Services Tax (GST)
10+ Year Experience Top Taxation Firms in Singapore.
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Taxation Services
GST Tax Services in Singapore
For over two decades, starting in 1994, goods and service tax has been collected in Singapore. This tax has come to serve as a steady stream of income for the government while still lowering tax rates for both individuals and companies. The body that controls and regulates goods and service tax in Singapore is known as the Inland Revenue Authority of Singapore (IRAS). Rather than taxing your income, the GST focuses on expenditure. If you are new to Singapore, then you may be wondering about the meaning of the goods and service tax.
What Is The Singapore Goods And Service Tax (GST)?
The goods and service tax exists in most parts of the world, and might be called the VAT tax (value-added) in some places. The goods and service tax or vat tax rate in Singapore is currently set at 8%. This tax applies to all goods and services made or imported into Singapore, provided the selling company is GST registered. As a company or business, you aren’t paying for the GST yourself once you are registered; instead, consumers pay this tax upon purchase. Your business will merely serve as an agent of the government and collect this tax at the point of sale.
What Happens If You Register Your Company For GST?
If you’re GST registered in Singapore, you will be required to file your GST to the government and pay the standard 8% rate on all sales. GST return filing in Singapore is done quarterly, where you report your sales and pay the tax to the tax department.
Seeing as you are expected to charge your customers for this tax, you aren’t making any payments on your end. However, only registered companies are allowed to charge this tax and file returns. Simply owning a company in Singapore doesn’t qualify you to charge or file GST. Any company can register for GST as long as they meet the requirements set by the tax department.
GST Registration in Singapore
Goods and service tax registration in Singapore is possible if your company meets certain criteria. Once you meet these criteria, you can apply and start to charge the tax on all taxable supplies from the GST effective date.
1. Compulsory Registration
Under special conditions, your company becomes obligated to register for goods and service tax. The conditions under which you will be mandated to register for GST are:
- Your company turned over one million Singapore dollars (S$1 million) over 12 months
- Current business sales projections show that you can expect to turn over one million Singapore dollars.
In either case, you will have a thirty-day grace period where you are expected to register your company for GST. The law covering GST is strict and failure to comply with compulsory registration once the criteria have been met will attract penalties. There are investigatory bodies that determine a company’s earnings and report back to the appropriate authorities. Therefore, avoid any fraudulent practices relating to compulsory GST registration.
2. Voluntary Registration
When you don’t qualify for compulsory registration, you can still apply for GST voluntarily. Your business operations will determine whether you can apply for one or not. You may also have to meet additional conditions before you can voluntarily apply for one.
Should you decide to register, your registration must last for at least two years while meeting all GST regulations. Your GST filing will need to be prompt every quarter and your records must be maintained properly for up to five years. Should your business close or you deregister from GST, you will still need to keep the records. There may be more regulations but this will be determined by the IRAS.
3. Exemption From Registration
When your company qualifies, you can still be exempted from registration if your company sells zero-rated goods or rendered services fall under zero-rated. IRAS will still need to review your exemption request but it will likely be granted if more than 90% of your products are zero-rated. You will also need to have a higher input tax than output tax for the exemption to be granted.
4. Deregistration
If your business is closing, you’re selling it to someone, or your business turnover for 12 months drops below one million Singapore dollars, you can cancel your registration. Once you fall under any of these categories, you have a 30-day grace period for deregistration.
We can help you monitor your business turnover and notify you when it is over or under 1 million. We are able to provide such GST monitoring services should you require it.
Why Should You Register For GST?
Registering for goods and services tax may seem tedious, especially with all the requirements and criteria. Many companies may not see the need to register, especially when it isn’t compulsory. Nonetheless, some companies benefit from GST registration. Some of the benefits GST affords your company include:
- Companies that are GST registered are entitled to GST refunds should they need them. This will apply when the company has greater expenses than revenues, especially when the company is still relatively new.
- If you have a business in the importation sector and are GST registered, you can claim GST on imported goods. However, exported goods are considered zero-rated under the goods and services tax scheme, allowing your company to claim a GST refund.
Why You Need To Understand GST Registration
As stated earlier, the IRAS do not take GST matters lightly and are very active in penalizing defaulters. To this end, the IRAS has reward programs to encourage whistleblowers and expose defaulting companies. To do this, they regularly audit books, review records of companies, and check financial records. Ignorance is not a defense and if you are found guilty of defaulting, you will be penalized. Understanding GST registration allows you to stay one-step ahead and comply with all regulations.
You may find that keeping up with your business and GST registration may be overwhelming. The best action is to let us handle it for you. At SJH Advisory, we will monitor your business and GST regulations to inform you of any action you need to take.
How Do You Register For GST?
The first thing to know is that you will need to fill out some documents and send them to the IRAS. Among these documents, you have the GST F1 and F3 forms, which every company must fill. There are other forms you may be required to fill but these will only apply to a special situation. If you are in a partnership, both parties will be required to fill the forms separately and forward them to the IRAS. The registration process is different for companies outside Singapore, but you will likely need to have an agent in Singapore to help with the procedure.
After about 21 days, you should receive a message that will tell you the outcome of your registration. If you have complied with all the requirements, you can expect it to be successful. You will also receive all other relevant information like filling dates, filling numbers along with any other necessary information. Once approved, you can start to file your GST and it will usually be done online.
If you need someone to help you through the entire process, our company specializes in GST tax services in Singapore. Whether you are based overseas or in Singapore, we can help you. We can also help you monitor your company’s GST and advise you on all necessary actions to take.
Declaring Errors Made In GST Returns
Mistakes occur, and they may happen where GST returns are concerned. The IRAS is aware that mistakes can happen and have considerations for voluntary responses. If you or any of your employees notice a mistake on your GST returns, you should report it at once. There is a grace period for reporting mistakes during which no punishment applies. However, penalties begin to apply and increase as time passes after the grace period.
We can help you monitor your GST return, detecting errors that may have already been made.
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Taxation Services
For over two decades, starting in 1994, goods and service tax has been collected in Singapore. This tax has come to serve as a steady stream of income for the government while still lowering tax rates for both individuals and companies. The body that controls and regulates goods and service tax in Singapore is known as the Inland Revenue Authority of Singapore (IRAS). Rather than taxing your income, the GST focuses on expenditure. If you are new to Singapore, then you may be wondering about the meaning of the goods and service tax.
The goods and service tax exists in most parts of the world, and might be called the VAT tax (value-added) in some places. The goods and service tax or vat tax rate in Singapore is currently set at 7%. This tax applies to all goods and services made or imported into Singapore, provided the selling company is GST registered. As a company or business, you aren’t paying for the GST yourself once you are registered; instead, consumers pay this tax upon purchase. Your business will merely serve as an agent of the government and collect this tax at the point of sale.
If you’re GST registered in Singapore, you will be required to file your GST to the government and pay the standard 7% rate on all sales. GST return filing in Singapore is done quarterly, where you report your sales and pay the tax to the tax department.
Seeing as you are expected to charge your customers for this tax, you aren’t making any payments on your end. However, only registered companies are allowed to charge this tax and file returns. Simply owning a company in Singapore doesn’t qualify you to charge or file GST. Any company can register for GST as long as they meet the requirements set by the tax department.
Goods and service tax registration in Singapore is possible if your company meets certain criteria. Once you meet these criteria, you can apply and start to charge the tax on all taxable supplies from the GST effective date.
Under special conditions, your company becomes obligated to register for goods and service tax. The conditions under which you will be mandated to register for GST are:
- Your company turned over one million Singapore dollars (S$1 million) over 12 months
- Current business sales projections show that you can expect to turn over one million Singapore dollars.
In either case, you will have a thirty-day grace period where you are expected to register your company for GST. The law covering GST is strict and failure to comply with compulsory registration once the criteria have been met will attract penalties. There are investigatory bodies that determine a company’s earnings and report back to the appropriate authorities. Therefore, avoid any fraudulent practices relating to compulsory GST registration.
When you don’t qualify for compulsory registration, you can still apply for GST voluntarily. Your business operations will determine whether you can apply for one or not. You may also have to meet additional conditions before you can voluntarily apply for one.
Should you decide to register, your registration must last for at least two years while meeting all GST regulations. Your GST filing will need to be prompt every quarter and your records must be maintained properly for up to five years. Should your business close or you deregister from GST, you will still need to keep the records. There may be more regulations but this will be determined by the IRAS.
When your company qualifies, you can still be exempted from registration if your company sells zero-rated goods or rendered services fall under zero-rated. IRAS will still need to review your exemption request but it will likely be granted if more than 90% of your products are zero-rated. You will also need to have a higher input tax than output tax for the exemption to be granted.
Registering for goods and services tax may seem tedious, especially with all the requirements and criteria. Many companies may not see the need to register, especially when it isn’t compulsory. Nonetheless, some companies benefit from GST registration. Some of the benefits GST affords your company include:
- Companies that are GST registered are entitled to GST refunds should they need them. This will apply when the company has greater expenses than revenues, especially when the company is still relatively new.
- If you have a business in the importation sector and are GST registered, you can claim GST on imported goods. However, exported goods are considered zero-rated under the goods and services tax scheme, allowing your company to claim a GST refund.
As stated earlier, the IRAS do not take GST matters lightly and are very active in penalizing defaulters. To this end, the IRAS has reward programs to encourage whistleblowers and expose defaulting companies. To do this, they regularly audit books, review records of companies, and check financial records. Ignorance is not a defense and if you are found guilty of defaulting, you will be penalized. Understanding GST registration allows you to stay one-step ahead and comply with all regulations.
You may find that keeping up with your business and GST registration may be overwhelming. The best action is to let us handle it for you. At SJH Advisory, we will monitor your business and GST regulations to inform you of any action you need to take.
The first thing to know is that you will need to fill out some documents and send them to the IRAS. Among these documents, you have the GST F1 and F3 forms, which every company must fill. There are other forms you may be required to fill but these will only apply to a special situation. If you are in a partnership, both parties will be required to fill the forms separately and forward them to the IRAS. The registration process is different for companies outside Singapore, but you will likely need to have an agent in Singapore to help with the procedure.
After about 21 days, you should receive a message that will tell you the outcome of your registration. If you have complied with all the requirements, you can expect it to be successful. You will also receive all other relevant information like filling dates, filling numbers along with any other necessary information. Once approved, you can start to file your GST and it will usually be done online.
If you need someone to help you through the entire process, our company specializes in GST tax services in Singapore. Whether you are based overseas or in Singapore, we can help you. We can also help you monitor your company’s GST and advise you on all necessary actions to take.
Mistakes occur, and they may happen where GST returns are concerned. The IRAS is aware that mistakes can happen and have considerations for voluntary responses. If you or any of your employees notice a mistake on your GST returns, you should report it at once. There is a grace period for reporting mistakes during which no punishment applies. However, penalties begin to apply and increase as time passes after the grace period.
We can help you monitor your GST return, detecting errors that may have already been made.
Frequently Ask Questions
Yes, there are guidelines applying to each industry and you need to study them closely. The IRAS has a comprehensive list of guidelines for every industry. You can find those that apply to your industry here. If you find it too difficult to understand, a lawyer can provide valuable assistance. Our GST tax services in Singapore also involve advising you on the actions to take according to the GST guidelines.
GST is exclusive to Singapore, and as such, will only apply to goods bought in and used within Singapore. Goods that are being exported are classified as zero-rated and as such, are subject to 0% GST. This isn’t to say that there aren’t tax fees that will apply to exported products. In the destination where the goods are exported, there may be a version of GST imposed on them. There may also be export levies due to the Singaporean government or other appropriate authorities.
Only compulsory registration means you have to register your company for GST. Other than that, you may want to consider what benefits you will get from GST. Seeing as GST is a constant revenue stream to the government, you may simply want to do your part. Also, there are some perks to registering your company for GST like GST refunds. If any of these perks appeal to you, you can proceed to register. However, there may be regulations and restrictions before you can register your company, even voluntarily. You may also want to note that there are possible de-merits of registering for GST because you will have to charge your customers for it.
It depends on the nature of your offense. If you have simply made an error with your GST return filing, then you have a grace period. Here, you can rectify the mistake without any penalties. Once the period lapses, you will be charged more than the withheld amount. If your offense is a grave one like falsifying or hiding your turnover, then you will be facing fraud charges. It will likely be seen as a criminal offense and you will face the penalty that comes with that.
Of course someone else can help you handle the grunt work when it comes to registering your GST. You will be required to sign forms and fill details you may not be comfortable handing out, so that part is handled by yourself. Checking if you are due for mandatory registration, monitoring payment dates, and other things can be handled by someone else.
At SJH Advisory, we specialize in consulting and helping companies with their GST registration and payments in Singapore. You may contact us for such services.
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If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
