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01. GST registration guide

 

Taxation 101

Lanturn’s Ultimate Guide to GST Registration in Singapore

(10 min read)

Registering for GST in Singapore is a fairly painstaking process, especially if you’re new to the country’s tax system and legislation. In this guide, we’ll outline the pros and cons of GST registration and give you step-by-step instructions on how to become GST registered in Singapore.

 

Contents

1. What is GST in Singapore?

 

2. The Pros and Cons of being GST registered

 

3. Which companies need to register for GST in Singapore?

  • Compulsory registration

  • Reverse Charge and Overseas Vendor registration

  • Exempt from registration

  • Voluntary registration

 

4. How to register for GST in Singapore

  • How to register for GST in five steps
  • What are the penalties for late GST registration?
  • How to cancel GST Registration

5. How GST registration affects your accounting and annual filing

 

Bonus: FAQs — Singapore GST Registration

  • Is every Singapore company required to collect GST?
  • Can a GST-registered company claim back the GST tax charged by its suppliers?
  • Can a company collect GST if it is not GST-registered?
  • Do Singapore companies need to collect GST when exporting goods and services overseas?
  • Is it beneficial to voluntarily register for GST?
  • Are there any industry-specific GST guidelines in Singapore?
  • Does Singapore offer any GST assistance schemes to help businesses?

02. GST contents

 

1. What is GST in Singapore?

03. GST tax-1Goods and Services Tax (GST) is a consumption tax that gets levied on:

The current GST rate in Singapore is 7%. GST-registered businesses are obligated to charge and account for GST at 7% on all sales of goods and services in Singapore unless the sale can be zero-rated or exempted under law.

GST charged on imported goods is collected by Singapore Customs.

GST charged on goods and services is collected by the Singapore’s governing tax office, the Inland Revenue Authority of Singapore (IRAS).

If you’ve never heard of the term ‘GST’ before, you might be based in a country that doesn’t have it, or in a country that calls it “VAT” or “Value Added Tax”.  

 

2. The Pros and Cons of being GST registered

It’s important to note that GST registration can be compulsory or voluntary in Singapore. In other words: not all companies need to register for GST.

If your company doesn’t meet the criteria for compulsory GST registration, you can still choose to register for GST voluntarily in order to leverage some of the economic benefits this can bring to your organisation.

If you’re new to GST and the impact it can have on your business, make sure you understand the benefits and drawbacks of being a GST-registered entity before you dive into the registration process.

 

The benefits of GST Registration in Singapore

  • As a GST-registered entity, your company can claim the GST it incurs on purchases as a tax deduction (Conditions and exemptions apply to this rule. )
  • Because the majority of large companies are required to be GST-registered, having your own business registered for GST is a sign to potential customers that your business is established and trustworthy.
  • GST is attractive to business owners, in that it only taxes the self-employed and wage earners when they spend their money.
  • Because GST taxes are applied only on usage and consumption, this means that savings and investments are not taxed.

 

04. pros of being GST registered

 

The Drawbacks of GST Registration in Singapore

  • The added administrative burden is the most obvious disadvantage here. Once you’re registered for GST, you’ll be required to collect, file, and pay that tax to the IRAS.
  • Unless you’re familiar with the ins and outs of GST legislation, you’ll need to pay an accountant to file GST on your behalf, which comes at a cost. This cost should be viewed as an investment, though. Get your GST filing wrong, and you may incur penalties.
  • Being GST-registered raises your selling price by 7%. Your customers might not love the jump in what you’re currently charging, and any customers who aren’t GST-registered themselves will not be able to recover that GST on their own returns.

You’ll need to fully comply with all of the responsibilities that come with GST registration. Failure to do this may result in penalties or imprisonment.

 

05. cons of being GST registered

 

3. Which companies need to register for GST in Singapore?

06. 1 mil in a calendar yearIn Singapore, GST registration falls into two categories: compulsory registration and voluntary registration. Because GST is a self-assessed tax, it’s up to you to assess your business’s liability to be registered.

The quickest way to assess your company’s GST liability is to think about it like this:

If your company’s taxable turnover exceeds—or will exceed—S$1 million in a calendar year, then it is required to register for GST.

However, because Singapore recently switched its taxable turnover calculating period from quarterly to calendar year, you’ll need to read the fine print to determine how you calculate your company’s taxable turnover.

Use the instructions below to determine if your business is subject to compulsory GST registration or exempt from GST registration. 

In the case that you are exempt from GST registration, we’ve also included some resources to help you decide if voluntary registration would be advantageous for your business.

 

Compulsory registration

Compulsory GST registration is when your company is required by Singapore law to register for GST—typically when it exceeds or will exceed S$1 million in taxable turnover during a set period.

Here’s how to calculate your taxable turnover, to determine if you are required to register for GST.

 

Retrospective View (calculating your existing taxable turnover)

  • Your taxable turnover at the end of the calendar quarter (i.e. 3 months ending Mar, Jun, Sep or Dec) prior to 1 Jan 2019 and the past three quarters was more than S$1 million. (Use the IRAS’ GST Registration Calculator (prior to 2019) to monitor your company’s registration liability.)
  • Your taxable turnover at the end of any calendar year on or after 1 Jan 2019 was more than S$1 million. For periods on or after 1 Jan 2019, taxable turnover will be computed on a calendar year basis for the purpose of determining registration liability. (Use the GST Registration calculator (from 2019) to assist you in determining your GST registration liability.)

 

Prospective View (forecasting your future taxable turnover)

If you’re certain that your company’s taxable turnover will exceed S$1 million in the next 12 months, you will have to register for GST.

Keep in mind—there must be certainty that your taxable turnover will exceed this threshold. And you’ll need to prove the certainty of your forecasted turnover with supporting documentation, such as:

  • Signed contracts or agreements
  • Accepted quotations or confirmed purchase orders from customers
  • Invoices to customers with a fixed monthly fee charged
  • Income statements showing that the past 12-month period was already close to S$1 million and that annual turnover is on an increasing trend

It’s important to note that you are not required to register for GST if there is no certainty in your forecast. For example, you made a forecast based on market assessment, business plans or sales targets.

 

An Update for 2020: Reverse Charge and Overseas Vendor Registration

Due to new regulation concerning GST on imported services, which came into effect on 1 January, 2020, your business may also be liable:

  • under the reverse charge regime if your business procures services from overseas suppliers and your business would not be entitled to full input tax credit even if you were GST-registered
  • under the overseas vendor registration regime if you are an overseas supplier or a local/overseas electronic marketplace operator that provides digital services to individuals and businesses in Singapore that are not registered for GST

Ask your account to outline your company’s liability, here, especially if you work with overseas suppliers.

07. Heads-up 2020 banner GST

 

Exemption from registration

08. GST tax exemptionYou will not be required to register for GST if:

  • Your taxable turnover is wholly or predominantly from zero-rated supplies and you successfully apply for exemption from registration
  • You are liable for GST registration under the retrospective view but not under the prospective view and the following conditions are met: 
    • You are certain that your taxable turnover for the next 12 months will not exceed S$1 million
    • The taxable turnover is projected to be lower due to specific circumstances (e.g. large-scale downsizing of business)
  • You have supporting documentation to substantiate your projection

Note that even if your business is exempt from GST registration, you’ll still need to monitor your taxable turnover and GST liability at the end of each calendar year.

 

Voluntary registration

Voluntary GST registration is when a GST-exempt company elects to register for GST in Singapore, even though they aren’t required to by law.

You can voluntarily register for GST if your business satisfies any of the following criteria:

  • Your business makes taxable supplies.
  • Your business makes only out-of-scope supplies. Out-of-scope supplies mainly refer to sales of goods that did not enter Singapore and goods in transit.
  • Your business makes exempt supplies of financial services that are also international services.
  • Your business procures services from overseas service providers and you would not be entitled to full input tax credit even if you were GST-registered.
  • If you have not started but you have the intention to carry out any of the above transactions, you may also apply for GST registration. You will have to satisfy the Comptroller that you are operating or carrying on a business and have firm intentions to carry out the above transactions.

If you do not have firm intentions or plans to carry out any of the above transactions, you should not apply for GST registration.

 

What are the benefits of voluntary GST registration in Singapore?

In addition to the benefits of GST registration we’ve already outlined above, there are some additional perks to voluntary registration that may be good for your business. Whether these apply to your situation depends entirely on the nature of your business and its client base.

10. GST voluntary registrationHere are two examples where voluntary GST registration would likely benefit a company in Singapore.

Example 1: When your turnover may exceed the S$1 million threshold
When your turnover is near but below the S$1 million threshold for compulsory registration, registering voluntarily means that you will not need to monitor your turnover constantly.

09. voluntary GST registration benefits

Example 2: If you predominantly (or exclusively) sell to customers overseas
If your company exports goods or services to overseas customers, as a GST-registered entity you would charge GST at 0% for these sales (provided they qualify as zero-rated supplies).

As these sales are zero-rated, there is no impact on your selling price after GST registration—so your customers won’t be annoyed by a pricing hike. And because your company is GST registered, it would be able to claim the GST incurred on any purchases where it paid GST in Singapore.

Once your business is GST-registered, it will be obliged to oversee a long list of GST-related responsibilities. We strongly recommend you work with an accountant or tax professional before voluntarily registering up for GST.

 

4. How to Register for GST in Singapore

11. GST registration type

Step 1: Determine your registration type

Is your company subject to compulsory GST registration? Or are you applying voluntarily?

If you’re unsure, speak to your accountant before registering for GST in Singapore. The GST registration process differs slightly depending on the type of registration and nature of your business, so it’s important that you get this right the first time around.

 

12. voluntary GST eLearningStep 2: Complete the eLearning course (voluntary registration only)

For voluntary registration, your company director/ sole-proprietor/ partner/ trustee/ preparer of GST returns must complete two e-Learning courses:

  1. Registering for GST
  2. Overview of GST

You are not required to take these courses if:

  • The company director, sole-proprietor, partner, or trustee of the business has proven experience managing other existing GST-registered businesses; or
  • The person who prepares your GST returns is an Accredited Tax Advisers (ATA) or Accredited Tax Practitioners (ATP); or
  • The business is applying to be registered under the Overseas Vendor Simplified Pay-only Registration Regime.

 

13. GST registration submissionStep 3: Complete and submit your application

All applications for GST registration in Singapore must be submitted via myTax Portal.

Things to keep in mind:

  • You’ll need a CorpPass to access the GST registration e-Service on myTax Portal. You will be asked to attach supporting documentation at the end of the application process, so make sure you prepare these documents in advance.
  • Businesses registering for GST on a voluntary basis are required to be on the GIRO plan for GST payment and refund. You’ll need to mail your completed original copy of the GIRO application form to 55 Newton Road Singapore 307987 after submitting your GST application online.

 

14. GST registration processing timeStep 4: Wait for your GST registration application to be processed

Typically the IRAS takes 10 working days to process a GST application.

During this processing period, you may be asked to provide additional documentation.

 

15. GST rocket launchStep 5: Your application and effective date of registration are confirmed

Provided your application is successful, the IRAS will send a letter to your registered address to confirm that your business has been GST-registered.

This confirmation letter will give you the following details:

  • GST Registration Number: the number you have to print on your invoices, credit notes and receipts.
  • Effective Date of GST Registration: the date when you have to start charging and collecting GST on your taxable supplies. You must not charge or collect GST before the effective date of your GST registration.

You can also find a copy of this notification letter by logging in to myTax Portal and selecting “Notices/Letters”.

 

What are the penalties for late GST registration?

Upon meeting the criteria for compulsory registration, Singapore companies must apply for GST registration within 30 days. If the company is late in its registration, the IRAS will impose a fine of up to S$10,000 and a penalty of 10% of GST owing. Other consequences include paying for GST of sales that were made even if GST was not collected.

How to cancel GST registration in Singapore

It’s rare that a business will need to cancel GST registration. In Singapore, you can cancel your GST registration if any of the following circumstances arise:

  • you stopped making taxable supplies and do not intend to make taxable supplies in future
  • your company ceases
  • your business is sold as a whole to another person 
  • your sales figures do not exceed S$1 million in a calendar year
  • you are certain your sales figures will not exceed S$1 million in a calendar year

You must apply for cancellation via MyTaxPortal within 30 days from the date of cessation.

Note that when your GST registration is cancelled, you will need to account for GST on business assets held on the last day of registration if GST was previously claimed on their purchase and the total market value of these business assets is more than $10,000.

These assets include inventories, fixed assets, non-residential properties and goods imported under the various GST schemes.

5. How GST registration affects your accounting and annual filing

A company is legally required to comply with its GST responsibilities from its effective date of GST registration.

17. GST registration compliance

Once your business is GST-registered, here’s an overview of the tasks you (or your accountant) will need to oversee to ensure your company remains compliant with Singapore’s GST legislation.

  • Charge and account for GST on standard-rated supplies
  • eFile your GST returns on time
  • Pay your GST dues on time
  • Correctly display prices with GST
  • Issue tax invoices with your GST registration number
  • Maintain accurate tax records
  • Notify IRAS of changes within 30 days

 

a. Charge and account for GST on standard-rated supplies

You’ll need to charge and account for 7% GST on the supply of goods and services made in Singapore (standard-rated supplies; different rules apply to relevant supplies).

You can choose to add GST as an additional charge, on top of your regular pricing. Or you can choose to absorb the GST by treating the price as ‘GST inclusive’.

 

b. eFile your GST returns on time

Your GST returns must be submitted via e-Filing within one month from the end of each accounting period. You’ll need to use myTax Portal to eFile.

Even if you haven’t made any GST transactions during the reporting period, you are still required to submit a "NIL" GST return.

If you file late or don’t file at all, you may incur penalties. In the case that you do not pay these penalties, you may face an imprisonment term of up to six months.

 

c. Pay your GST dues on time

In addition to eFiling your returns, you’ll also need to pay the government the GST taxes you owe. GST owed must be paid within one month from the end of each accounting period.

You will incur penalties for non-payment or late payment of your GST dues. A 5% penalty will be levied on the amount of GST owing unpaid by the due date. An additional penalty of 2% per month on tax remaining unpaid after 60 days from the due date of the prescribed accounting period (subject to a maximum of 50% of the outstanding tax) may also be imposed.

 

d. Correctly display prices with GST

Singapore legislation requires GST registered traders to show and quote GST-inclusive pricing on all prices displayed, advertised, published, and quoted (verbally and in writing). Failure to comply with Singapore’s GST pricing regulation may result in penalties of up to S$5,000.

 

e. Issue tax invoices with your GST registration number

You are also required to issue tax invoices and customer accounting tax invoices for your standard-rated supplies. If the total amount payable for your supply (including GST) does not exceed $1,000, you may issue a simplified tax invoice.

Your GST Registration Number should be reflected on all your tax invoices, simplified tax invoices, and receipts.

 

f. Maintain accurate tax records

You need to keep all business and accounting records for at least five years, in compliance with Singapore’s recordkeeping requirements.

 

g. Notify IRAS of changes within 30 days

If your business circumstances change, you’ll need to notify Singapore’s Comptroller within 30 days. These changes include:

  • Change in GST mailing address
  • Change in business constitution or ownership
  • Change in partner(s) or particulars of partner(s)
  • Set up of new partnerships business with the same composition of partners

 

Contact us

Need some help with GST registration in Singapore?

If you know what you’re doing, it’s definitely possible to DIY your company’s GST registration in Singapore. But the process is long and detailed, and it can take you away from other important tasks in your business.

If you’d prefer to outsource your company’s GST registration to a pro, get in touch to discuss how we can help.

Lanturn offers cloud corporate secretary services to companies in Singapore. In addition to quick and painless GST registration, our experts can also take care of your company’s tax, accounting, payroll, and other compliance tasks. Get in touch to discuss how we can help.

If your accounting is neither sleek nor awesome, let us fix that for you.

Singapore GST: Frequently Asked Questions

19. GST FAQs

Is every Singapore company required to collect GST?

No. A company is only required to register (compulsory registration) for GST and collect GST if its annual turnover exceeds S$1 million in a calendar year. If a company does not meet this threshold, it may voluntarily become a GST-registered entity (voluntary registration) with IRAS.

 

When are you required to register for GST in Singapore?

If your company is liable for compulsory registration, you are required to apply for GST registration within 30 days from the date your liability to register arose.

 

What are the GST due dates in Singapore?

GST Accounting Period

Filing and Payment Due Date

Jan - Mar

30 Apr

Apr - Jun

31 Jul

Jul - Sep

31 Oct

Oct - Dec

31 Jan


Your GST return and payment are both due one month after the end of the accounting period covered by the return. If you have been granted special GST accounting periods, the due date to submit your returns is one month from the last date of the special accounting period.

 

What are the consequences of late filing or non-filing of GST returns?

If you fail to file your GST return by the due date, the IRAS may take the following actions:

  • Issue an estimated Notice of Assessment (NOA) and impose a 5% penalty on the estimated tax
  • Impose a late submission penalty
  • Summon the business or person responsible for running the business (including the sole-proprietor, partner and director) to court.

A late submission penalty of S$200 is imposed immediately once a GST return is not filed by its due date. A penalty of S$200 will continue to be imposed for every completed month that the GST F5/F8 return is outstanding, up to a maximum of $10,000 for each outstanding F5/F8 return.

Learn more about GST-related penalties (and how to pay or appeal them) here.

 

Can a GST-registered company claim back the GST tax charged by its suppliers?

Yes. This is one of the advantages of GST registration. The GST charged by a company to its customers is its output tax; GST paid by the company to its suppliers is its input tax. The company can claim back the difference between its output and input tax.

 

Can a company collect GST if it is not GST-registered?

No. Companies not registered for GST are not permitted to charge GST.

 

Do Singapore companies need to collect GST when exporting goods or services overseas?

No. Exported goods and exported services are considered zero-rated supplies, which means the company would charge 0% GST on these items.

 

Is it beneficial to voluntarily register for GST?

It depends on the nature of the business. GST-registration comes with a long list of responsibilities. Companies should weigh up the pros and cons of GST registration before signing up.

 

Are there any industry-specific GST guidelines in Singapore?

Yes. The IRAS has provided a long list of industry-specific GST guides that provide information on how GST in Singapore affects individual sectors. 

Visit the following sections of the IRAS website to find the most up-to-date guide for your industry:

 

Does Singapore offer any GST assistance schemes to help businesses?

Yes, the IRAS has several GST assistance schemes to create a pro-business environment in Singapore. Follow the links to learn more about each scheme at the IRAS website.

  • Cash Accounting Scheme: businesses only have to account for output tax when payment is received.
  • Discounted Sale Price Scheme: allows you to charge GST on 50% of the selling price when you sell a second-hand / used vehicle, without needing to seek prior approval from IRAS to use the scheme.
  • Gross Margin Scheme: allows second-hand dealers who purchased goods free of GST to use the Gross Margin Scheme to charge and account for GST.
  • Hand-Carried Exports Scheme (HCES): applicable if you wish to zero-rate your supplies to overseas customers for goods hand-carried out of Singapore via Changi International Airport.
  • Import GST Deferment Scheme (IGDS): approved GST-registered businesses pay GST on imports payments when their monthly GST returns are due instead of at the point of importation.
  • Major Exporter Scheme (MES): GST on non-dutiable goods is suspended at the point of import and also when the goods are removed from Zero GST warehouses.
  • Tourist Refund Scheme (TRS) for Businesses: GST-registered businesses may provide GST refunds to tourists as an independent retailer or by engaging the services of a Central Refund Agency.
  • Zero GST (ZG) Warehouse Scheme: Administered by Singapore Customs, this scheme suspends import GST on non-dutiable overseas goods when the goods are moved into a ZG warehouse. GST is payable only when the imported goods leave the warehouse and enter the local market.

 

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