Guide to Singapore GST: Everything Businesses Need to Know

The Goods and Services Tax (GST) in Singapore is a vital aspect of the country’s tax system. Whether you are a local entrepreneur or a multinational corporation, understanding GST is crucial for compliance and financial efficiency. This guide provides an in-depth overview of Singapore’s GST, including registration requirements, rates, compliance obligations, and the benefits of proper GST management.

What is GST?

Goods and Services Tax (GST), also known as Value-Added Tax (VAT) in other countries, is a consumption tax levied on the supply of goods and services in Singapore and on the import of goods into the country. Businesses act as tax collectors on behalf of the Inland Revenue Authority of Singapore (IRAS).

Key Features of Singapore GST

1. GST Rates

• Standard Rate: The GST rate is 9% as of 1 January 2024, following a phased increase from 7% (2022) to 8% (2023).
• Zero-Rated Supplies: Exported goods and international services are taxed at 0%.
• Exempt Supplies: Certain goods and services, such as residential property transactions and financial services, are exempt from GST.

2. Who Pays GST?

GST is borne by the end consumer. Businesses registered for GST collect and remit this tax to IRAS.

Who Needs to Register for GST?

1. Mandatory Registration

Businesses must register for GST if:

• Their annual taxable turnover exceeds S$1 million.
• They expect their taxable turnover to exceed S$1 million in the next 12 months.

2. Voluntary Registration

Businesses below the threshold may opt for voluntary registration if they frequently deal with GST-registered entities or engage in exports (zero-rated supplies).

Benefits of Voluntary Registration:

• Ability to claim input tax credits.
• Enhanced credibility with clients and suppliers.

Taxable vs. Non-Taxable Supplies

Taxable Supplies

• Most goods and services provided in Singapore.
• Importation of goods into Singapore.

Non-Taxable Supplies

1. Exempt Supplies:

• Financial services (e.g., loan services, life insurance policies).
• Sale or lease of residential properties.

2. Out-of-Scope Supplies:

• Transactions occurring outside Singapore.

How GST Works

1. Output Tax

GST collected by businesses on taxable supplies made to customers.

2. Input Tax

GST paid by businesses on purchases and expenses. GST-registered businesses can claim input tax credits, offsetting their output tax liabilities.

3. Net GST Payable

The difference between output tax and input tax is remitted to IRAS.

GST Compliance Requirements

1. Filing GST Returns

GST-registered businesses must file GST returns quarterly via IRAS's myTax Portal. Returns must be submitted within one month after the end of the accounting period.

2. Issuing Tax Invoices

Tax invoices must include:

• GST registration number.
• Total amount payable (with GST).
• Breakdown of taxable and non-taxable supplies.

3. Record Keeping

Maintain accurate records of all business transactions for at least five years.

4. Adjusting for GST Rate Changes

Businesses must update pricing, invoicing, and accounting systems to reflect rate adjustments promptly.

Penalties for Non-Compliance

• Late Filing or Payment: Fines of up to S$200 per month (capped at S$10,000) for late filing.
• Incorrect Tax Returns: Penalties of up to 200% of the underpaid tax.
• Failure to Register: A penalty of 10% of the GST due and backdated tax liability.

Benefits of Proper GST Management

• Input Tax Recovery: Claim GST incurred on business expenses.
• Operational Credibility: GST registration enhances trust with clients and suppliers.
• Efficient Tax Planning: Proper GST management minimizes financial risks and penalties.

How Apexia Corporate Advisory Can Help

Navigating GST regulations can be complex, but with the right guidance, businesses can ensure compliance and maximize benefits. At Apexia Corporate Advisory, we provide:

• GST Registration Services: Assess your business's GST obligations and handle the registration process with IRAS.
• Compliance Management: Assist with filing GST returns, issuing tax invoices, and record-keeping.
• Advisory on GST Rate Adjustments: Help businesses adjust pricing and accounting systems for GST rate changes.
• Audit Support: Provide support during GST audits to resolve compliance issues efficiently.

Contact us today to learn more about our services.