What is GST & How to Register for GST in Singapore 2024

GST stands for Goods and Services Tax, is a consumption tax levied on imported goods and on most of the goods and services supplied in Singapore. It is similar to VAT (Value Added Tax), levied in other countries. The GST rate was increased from 7% to 8% on 1st January 2023. The GST rate will be increased to 9% on 1st January 2024. 

GST is charged to the end consumers. The sellers charge and collect GST from consumers, and pay the tax to IRAS (Inland Revenue Authority of Singapore). GST is only charged by registered businesses. Only businesses who have more than $1 million in annual taxable turnover. 

Some business types are exempt from GST including financial services, the sale and lease of residential properties. The export of Goods also not charged GST. Register businesses must file a GST return with IRAS (Inland Revenue Authority of Singapore) on a monthly or quarterly basis.

How does Singapore GST affect your business?

When you run a GST registered business, you need to sell your Goods and services after adding the GST rate in price. GST usually doesn’t become an expense for the company. Registered GST business charge and collect the GST tax on the behalf of IRAS just like a middleman. 

Example: if your product costs $10, you charge your customer $10.8 ($10 for your service and an additional 8% GST tax of $0.8). You then pay this $0.8 to IRAS.

For calculate Singapore GST, Please visit our Singapore GST Calculator

Are there benefits to registering for GST?

If your company makes more than $1 million turnover in 12 Months, you must have to register for GST. Here are some of the benefits when your business gets registered for GST.

  • GST Registered businesses can claim credit for taxes paid on purchases against those collected on sales.
  • Organisation who paid GST fee is legally bound to maintain the required accounting and filing systems.
  • You can establish more legitimacy to consumers as most reputable companies are GST registered businesses.
  • GST is not levied on savings, which helps people to invest more regularly.

Also read about: Singapore Income Tax

What are the drawbacks to registering for GST?

There’re also some cons of registration for GST.

  • Adding a GST rate in your product price is to increase the price tag and Some of your customers may not be too happy.
  • You need to understand the details of the GST you pay or someone else to do it.

Should I register for GST Singapore?

GST tax is a self-assessed tax. You need to monitor your business whether you need to register or not.

Compulsory registration

Registration is mandatory when:

  • Your business must have $1 million turnover in the last 12 months, this is called the retrospective basis.
  •  You’re expecting your business will make more than $1 million turnover in the next 12 months, this is called the prospective basis. 

When your threshold increases more than $1 million, you need to submit your registration application within 30 days. If not you will be liable to penalties.

Also read about: Taxes in Singapore

Voluntary registration

You can voluntarily register for GST even if you don’t need to. But there’s some additional requirements if you register voluntarily. Once registered, you need to stay registered for a minimum period of two years.

That means you need to follow all the rules of GST such as filing the GST return file on quarterly basis and maintain all your records for at least five years. As part of voluntary GST registration, the company director must complete two courses one is Registering for GST and second is Overview of GST. If the director has experience managing other existing GST registered businesses, in that case courses are not required.

To register for Voluntary, you need to fill the GST F1 form along with all required documents to IRAS. You’ll need to fill the GST F3 form, if you are operating a partnership business.

GST schemes for businesses

There are several government-run assistance schemes in Singapore when it comes to GST. Such GST schemes are designed for cash flow in Singapore. 

  • Tourist refund scheme, that means Singapore Govt. allow tourists to claim refund GST on goods bought from registered retailers. 
  • Cash accounting scheme, that means for small businesses with annual sales of less than SG $1 million.
  • Major Exporter Scheme, that means to facilitate the cash flow of major exporters with significant imports.
  • Zero GST Warehouse Scheme, that means a GST- registered business can transform its warehouse into a zero-GST warehouse.

How to register for GST in Singapore

Before registering for GST, you must have these information

  • Name and registration number.
  • Financial year-end.
  • Business activities.
  • Size of the company.
  • Issued capital.
  • Paid-up capital.

Process involves the following steps:

  • Filling a paper or e-application with IRAS (Inland Revenue Authority of Singapore) for GST registration. Application must be shipped to the physical address to IRAS.
  • After that you’ll receive a notification from IRAS. The confirmation letter will include – GST Registration Number and Date of registration.

How Do You Pay for GST?

A registered GST organization must show the GST Inclusive price on its displayed, verbally quoted, published, or advertised prices. If they do not do that, the organization will be faced with a penalty.

When billing the organization must show the GST rate on invoice, this will help consumers as a supporting document for filing a claim for input tax on its standard-rated supplies. This document comprises information of products being sold with a GST charge.

It is important to keep all records of your transactions related to GST. Make you claim on input tax during the accounting period as per the date of the tax invoice.

FAQs

1: What is GST registered company?

For companies, if your company is a GST Registered company, that means you need to collect the GST rate of your all Goods and Services on the behalf of IRAS (Inland Revenue Authority of Singapore).

2: Different types of GST registration?

  1. Compulsory Registration.
  2. Voluntary Registration.
  3. Registration under Composition Scheme.
  4. No Registration.

3: What is GST free in Singapore?

Goods and Services which you’ve consumed already in Singapore. Goods that you are exporting for commercial purposes. Accommodation in a hostel or hotel, service such as card rental and tour services.  

4: Is Singapore GST zero rated?

Zero rated goods and services are subject to 0% GST. Exports of Goods are mainly zero rated supplies. A GST Registered entity who makes zero rated supplies is able claim back the input tax.

Conclusion

GST is a tax levied on Goods and Services that are supplied in Singapore by registered Companies. To register for GST, you must have more than $1 million turnover in the last 12 months. To register for GST please read the above instructions. After registration, you’re able to charge GST on all of your products.

Henry Thomas

I am Henry. My passion lies in creating high-performing teams, optimizing business processes and leading the strategic direction of the business. My expertise includes helping small businesses with a range of accounting services, tax preparation, business advisory, accounting and bookkeeping, and personal tax planning, as well as company, trust and partnership tax returns and more.