Goods and Services Tax (GST) In Singapore
GST, or Goods and Services Tax, is a tax imposed on the supply of goods and services made in Singapore by a taxable person for any business carried on by him and on the importation of goods into Singapore. A Singapore business is required to register for GST if earns more than S$1 million income annually annual or currently making taxable supplies and the annual taxable turnover is expected to be more than S$1 million.
Taxable supplies include not only goods but also services supplied in Singapore, goods supplied abroad from Singapore and any International services provided from Singapore. Within thirty days from the time it is deemed liable, a Singapore business is expected to register for GST.
Businesses must charge and account for GST at the prevailing rate after registration. This is referred to as output tax. Businesses registered with GST can claim the GST incurred on their goods and services purchased provided certain conditions are complied. This is referred to as input tax. Goods imported from overseas which also claimed as input tax are also charged for GST. The agency responsible for import GST collection is the Singapore Customs.
The current GST rate is 7%. GST registration is compulsory when your business earns profits more than S$1 million for the past 12 months; or your business is currently making sales and there is a reasonable expectation of profits more than S$1 million for the next 12 months, On the alternative, a business may choose to voluntarily register for GST.
Even if you are currently not liable for compulsory registration, you may opt to apply for voluntary GST registration. The criteria for GST registration includes having a business expected to make taxable supplies, or your business already makes taxable supplies and you have an annual taxable turnover not more than S$1 million, or your supplies are out-of-scope supplies (goods supplied outside Singapore), or your business makes exempt supplies of financial services that are also considered as international services
Claiming input tax incurred in the course of your business brings about a lot of benefits. This is most especially enjoyed when making purely zero-rated supplies (exports or international services).
There are some conditions under voluntary registration. The conditions before registration are employing the GIRO Scheme for payment and/or refund of GST; and security deposit must be provided as imposed by the Comptroller on a case-by-case basis. On the other hand, conditions after registration include within three months from the effective date of registration, you must attend the compulsory seminar “Introduction to GST” by IRAS; maintain the GST registration for at least two years; and fulfill completely the Responsibilities and Obligations of a GST-registered person and any other conditions as may be imposed by the Comptroller.
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