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Guide to goods and services tax (GST)​

GST is a tax on products and services in Singapore. It started in April, 1994 and is like VAT that is typical in many other countries.

As per the Singapore Minister of Finance, people pay indirect taxes on things that they buy. This tax is like a sales tax. The new system started on July 1, 2007 and has an indirect tax rate of 7% for goods and services sold in Singapore (for example, 7% of a $100 toy). Rates vary depending on how much you buy or sell. You will also have to pay this type of tax when you import goods into Singapore. The goal of this new system is to make sure that domestic goods are taxed the same as imported ones, so there will be no unfair advantages either way.

To avoid confusion, let’s go through some of the questions that people ask about Singapore’s GST.

GST TAX

When is Your Company Required to Register for GST in Singapore?

If your company’s total revenue in a 12-month period is more than $14,000 Singapore dollars or you have goods for sale that cost over $100 Singapore dollars, then you must register your business and collect GST.

What are the Types of Goods and Services Subject to GST?

Goods subject to GST include everything from food to clothes. It also includes some services such as car repair.

How Much Will Your Company Have To Pay on Import Duties When You Start Doing Business In Singapore?

When importing goods into Singapore, companies will be charged import duties plus an additional charge equal to one-half of the customs duty rate (e.g., if the customs duty rate is 15%, then they’ll pay about 30% on the goods)

GST Registration is Mandatory When:

GST Voluntary Registration:

You can fill out a form to apply for GST even if you are not obligated to file. This is based on the company’s activities, meaning that they may have export plans or they might have already started doing business in Singapore.

After you have a voluntary license, you need to stay enrolled for at least two years. You must follow the GST rules, register quarterly with GST, and keep documents for five years. This is true even if your company stops working or you withdraw from GST. The relevant tax authorities expect it of you too!

Getting an Exemption From Registering Under the GST:

When your company only sells zero-rated products, it can qualify for the GST exemption even if the taxable items meet the registration requirements. You will not have to file GST forms and you won’t need to report your quarterly GST returns. But if you sell more than 90% of zero-rated items and your input tax is greater than your output tax, then IRAS might accept the exemption request.

If a Firm is Registered for GST, What is It Expected to Do?

  • You need to have at least five years of company documents and financial records.
  • Bill and pay 7% GST for supplies that were made in Singapore (basic-rated supplies).
  • You need to file your GST reports on time. Make sure that you do them online and before the end of every budget period. You must also pay the right taxes.
  • If you don’t pay the taxes that you owe by the given deadline, there will be a 5% levy on what is owed.
  • If you are changing things about the company, like the GST address, basic law or property rights, or if there are any new shareholders or partners in the company, then it is necessary to let the Controller know about this change within 1 month.
  • If you do not file your GST returns on time or if you have trouble doing it, then there will be a fine of up to $5,000 and jail time for non-payment.
  •  You have to submit receipts for the taxes you paid on your regular-priced materials.

Can You Describe the Registration Process of GST?

The revenue authorities are getting the form GST F1, including the required supporting documentation. If you are in collaboration, you need to give the form GST F3 with information about the GST F1. For foreign companies, group enrolment and department registration there is a different procedure/form available. Foreign registrants have to nominate a local representative to work on their behalf and also submit a letter that explains this along with their registration form.

It takes about three weeks to register under the GST Act. Once you have enrolled for GST, you will get a statement from a notice from GST Registration. That notice should give your company’s new number, when it operates as a registered entity of GST, the schedule and time schedules of your registration and any other guidelines that may be necessary. You must always register your returns online.

How Does the Firm Claim the GST Input Tax?

  • You may have paid the GST when you traded with a company that is registered for the GST. This also applies if you used goods when you traded. You can claim this back as long as you meet all of the terms required by the government.
  • You need to claim the GST on your taxes within the same time frame, or when you registered your company.
  • If you want to claim the GST on goods and services that are not taxed, then you need to make sure if that the want to amount of money spent claim on these goods is low. for the GST input tax on exempt goods or services, then make sure that the transaction satisfies the De Minimis Rule.
  • Sometimes, companies can file for the GST input tax even if they have not been incorporated or registered yet.
  • If you owe GST on any of the goods you have bought and not paid, then you need to pay it back. You need to do this if the suppliers have not received payment from you in the last 12 months.

Which category of Goods and Services Needs to Be Charged GST by the Company?

When a business offers their customers refunds on many supplies, or discounts on instant payment, then the business is eligible for GST and should add GST to the purchase invoices. The GST charges will be zero-rated if the customer is from overseas, and if it comes under section 21(3).

Goods and service tax is payable on all items offered to customers within the national borders of Singapore.

The IRAS has the authority to charge GST from the amount collected by your company (also called output tax).

You may very well claim GST on certain company expenditures you incur (also called input tax).

They allow you to incur GST due for payment by clients and customers as per your business promotional plan. Whenever you obtain any payment from the consumers, the amount can be considered to be GST inclusive.

When is the Firm Needed to Submit GST Returns?

  • A company needs to submit GST every quarter. They need to file e-form GST F5 with the IRAS a month after the quarter.
  • It is important to mention the amounts in Singapore dollars.
  • You should remember to include the output tax as well as the input tax when calculating the rebate for that quarter. You want to make sure you are not confused about how much money you will be getting. They will always be different from each other.

What Are the Accounting Records the Firm Must Maintain?

A company must maintain an accurate record of all the goods and services that they purchase. They also need to track their sales, purchases, stock-in process items as well as inventory.

They should make sure to include GST in their accounting records when appropriate. It is important for them to know how much input tax they have on a particular day so that they can calculate the output tax accurately at month-end or quarter-end time periods.

It is important to keep all of the records that are written, or in electronic form.

The sales figures for the organization are determined by the documents that you submit to the IRAS. And you should make sure to maintain all financial records, like journals, sub-ledgers, and general ledgers. These help show your company’s financial position.

Is It Possible for a Firm to Ask for a Change in the GST Accounting Periods

  • You need to tell the IRAS about changes you have made to your company. If the change happened at the end of a financial year, you might be able to change when you file for GST.
  • If the company’s financial year does not match with IRAS, then it is better to ask for special filing dates.

Can the Company Cancel Its GST Registration?

A company can ask for a cancellation of their GST registration. It is possible to cancel a GST registration if the company does not have anything to do with services or products that are subject to GST.

  • When the company has stopped working.
  • If your business is no longer trading on taxable products and services and continues to be like this in the future.
  • If you are no longer the owner of your company after selling it off to someone else. The new owner of the company will be liable for filling out the GST tax.
  • You can also cancel your GST registration if the structure and nature of your company has changed. If you converted from a partnership to a sole proprietorship, then future aspects of your company will change too. So you need to decide accordingly.

If you want to get GST in Singapore, you need to make sure that you clear all your doubts first. Sg Biz Consultants is the best advisory firm to give you every detail about the information for GST in Singapore. They are a good goods and services tax service provider, and their team members are highly qualified and experienced in their field. With GST registration, your business can benefit from the new taxation system.

Our team of experts can deliver all corporate services on a world-class platform at very affordable prices — the best of all worlds.