Goods and Services Tax or GST is a broad-based consumption tax overseen by IRAS levied on nearly all goods and services provided in Singapore, as well as imported goods. Businesses act as collecting agents, as GST is charged to the end consumer. GST registered companies are required to collect GST from their customers for the goods and services rendered, and then pay the tax collected to IRAS.
Mandatory registration for GST: If your business sells taxable goods and services and the annual turnover exceeds or is likely to exceed S$1 million, you must register to receive GST. If most goods or services are used for export or global supply (ie “zero tax rate supplies”), you can apply for an exemption from GST registration.
Voluntary registration for GST: You can also voluntarily apply to the Commissioner in charge to register for GST. If and once approved, the company must maintain registration for at least 2 years.
The benefits of registering for GST: According to the tax return conditions, most companies register to receive GST in order to recover the GST paid when purchasing goods.
- When the GST paid by the company exceeds the GST received, the difference can be recovered from IRAS
- When the GST collected by the company exceeds the GST paid, the difference is paid to IRAS
- When the GST tax rate is raised, companies are more willing to voluntarily register to claim the GST they paid when they purchased the goods
GST exemptions apply to the provision of most financial services, the sale and lease of residential properties, and the importation and local supply of investment precious metals. Goods that are exported and international services are zero-rated.
Who Can Register for GST:
- Sole Proprietorship
- Limited Partnership
- Limited liability Partnership
- Club, Association, Management Company or Corporation
- Non-profit Organisation
- Statutory Body
- Government Agency