Compulsory and Voluntary Registration of GST in Singapore

Implemented on 1st April 1994, Singapore’s Goods & Services Tax (GST) is a broad-based consumption tax charged on:

• Supply of taxable goods and services in made in Singapore, i.e. place of supply is in Singapore, by a taxable person made in the course or furtherance of any business; and
• Importation of all goods (whether for domestic consumption, sale, or re-export), regardless of whether the importer is GSTregistered or not.

The Inland Revenue Authority of Singapore (IRAS) assesses, collects and enforces payment of GST, which is also known as Value Added Tax (VAT) in many other countries. The current Singapore GST rate stands at 7%.

GST registration is not automatic in Singapore. Unless already registered, businesses are required to continually assess the need to be registered for GST, based on their Total Taxable Turnover over a 12-month period.

Compulsory Registration

Registering for GST is compulsory when a company’s Total Taxable Turnover exceeds S$1 million over a 12-month period OR is reasonably forecast to exceed S$1 million over a 12-month period, based on signed contracts and orders.

A company must make a GST application to IRAS within 30 days from the time it is deemed liable to avoid a late submission penalty.

Voluntary Registration

A cost-benefit analysis on the impact GST registration would likely reveal incentives for voluntarily registering for GST when a company is not required to so. For example, it makes financial sense to be GST-registered if most of a company’s suppliers are also GST-registered, as it would reduce actual cost of goods and services by 7%. Also, if a company imports goods into Singapore before exporting out to other countries, or purchases goods from GST suppliers to export out, it most likely will save on the GST charged by these suppliers. Once approved, a company will need to remain registered for a minimum of 2 years and adhere to record keeping, accounting and filing obligations stipulated by IRAS.