The importation of goods and services into Singapore and the supply of Goods and services in Singapore attracts a consumption tax referred to as Goods and Services Tax (GST), an indirect comprehensive tax levy also known as Value Added Tax (VAT) in many other countries. With GST filing, the tax authorities report on a quarterly basis to the Singapore tax department with the amount invoiced and collected.
Registration; Compulsory or mandatory for my company?
Goods and Service Tax (GST) is a self-estimated system of taxation and companies need to assess the need to register incessantly. The registration of businesses can be either compulsory or voluntary.
Compulsory GST Registration is applicable when
- Your business turnover for 12 months is more than 1 million SGD. This is known to be the retrospective basis, or
- Your business is, without a doubt, expecting for the next 12 months to make a turnover of more than 1 million SGD due to sales performance. This can be referred to as the prospective basis.
Failing to register your business will attract penalties.
If you are not subject to compulsory registration, you may register on a voluntary basis if only you meet the requirements below:
- Your business turnover annually is more than 1 million SGD, or
- You are an out-of-scope supplier (supplying services outside the shores of Singapore), or
- Your supplies of services financially are considered foreign services
A business that deals with zero-rated supplies is exempted from the GST filing, regardless if the tax rate exceed the registration requirement. Zero-rated products are taxable but the tax rate is nil on input supplies. Since the cost to you is input tax, consider this is an escape from the GST registration. You will not be paying tax to the IRAS but rather you will be reclaiming.