Goods and Services Tax (GST) Singapore, is an indirect tax levied on the supply of goods and services in Singapore and import of goods into Singapore. 

 

GST is an indirect tax, expressed as a percentage (currently 7%) applied to the selling price of goods and services provided by GST registered business entities in Singapore.

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Compulsory Registration

 

Registering for GST is compulsory when :

• The turnover of your business is more than 1 million SGD for the past 12 months – known as the retrospective basis OR

• You are currently making sales and you can reasonably expect the turnover of your business to exceed 1 million SGD for the next 12 months – known as the prospective basis. This includes if you have signed agreements / contracts which will bring you the revenue in the next 12 months of exceed 1 million SGD.

 

Once your revenue exceed 1 million SGD, you need to submit the GST application to IRAS within 30 days, failing to register your business with IRAS within the stipulated timeframe will attract penalties.

 

There are anti-avoidance provisions to ensure that entities are not established merely to keep turnovers less than the threshold and thereby avoid registration.

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Voluntary Registration

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You may apply to voluntarily register for GST if you are not liable to compulsorily register depends on your business operations. The business must have plans to do sales or have started doing sales in Singapore (taxable supplies). Please note that there are additional conditions if you choose to register for GST on voluntary basis.

Once you are voluntarily registered, you must remain registered for at least two years and you must comply with the GST regulations, filing the GST return on time on quarterly basis and maintain all your records for at least five years, even after your business has ceased and you have deregistered from GST. You may also have to comply with any additional conditions that are imposed by the tax authority.

 

For companies who wish to do so on a voluntary basis, it is advised that they first perform a cost-benefit analysis on the impact that GST registration will have on the business and reporting process.

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Exemption from Registration

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If you make only zero-rated supplies you can apply for an exemption from registration, even if your taxable turnover exceeds the registration limits.

 

This allows you to escape from the administrative requirement of GST registration and subsequent quarterly GST filing. IRAS will approve the exemption, if more than 90% of your total taxable supplies are zero-rated and if your input tax is greater than your output tax.

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De-registration

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You can cancel your registration when your business stops or when your business is sold as a whole to another person or when your sales figures do not exceed 1 million SGD. You must submit an application form, along with other relevant documents to the tax authority within 30 days from the date of cessation.

 

 

With today’s complex and rapid growing business environment, how businesses manage their Goods and Services Tax has become the centre of attention. Keeping up to date with regulatory requirements and changes can be quite a challenge and failure to account for the GST correctly (e.g. filing GST late, paying GST tax late) can result in hefty penalties imposed which will significantly impact the business.

 

At Ceres Pacific, our team of professionals can take care of these concerns for you. We provide the service of reviewing your proposed business transactions to facilitate compliance with the GST legislations and advise you on areas for improvements.

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