Goods & Services Tax (GST) in Singapore
We help Singapore businesses register for Goods and Services Tax, and we file it accurately on time
GST registration
GST is a Goods and Services tax, or value‑added tax. GST registration in Singapore is compulsory if your company’s turnover is over S$1 million a year.
The GST rate is 7%. The GST rate for the goods and services you sell to someone outside Singapore is 0%.
A voluntary GST registration is also an option and might bring you perks. From 2020, GST is applied not only to the goods and services rendered in Singapore but also to some of those coming and going from overseas.
Outsourcing bookkeeping and accounting can minimise the risk of missing the GST changes. It also helps you grasp the requirements and choose the most beneficial scenario for your particular type of business when dealing with GST.
What is new with GST in 2021?
There are no new rules about GST in 2021. But certain services from foreign-based providers have become GST-charged from 2020.
For example, you have a corporate Microsoft Office licence you pay S$100 for:
You are not-GST registered — Microsoft will add the 7% to the price and pay the tax for you. Your subscription fee will rise to S$107.
You are GST-registered — notify Microsoft so as not to be charged twice and pay the tax yourself. Your subscription fee will remain S$100.
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- Multicurrency accounting S$200/y
- Unaudited Financial Statements + Tax S$800
- Consolidated Unaudited report S$1,000
- Dormant Accounting S$300
- Full XBRL S$500
- GST Registration S$300
- Payroll, per person S$25/m
How does a company charge GST?
You add 7% to the sum you charge the customer for your goods or services and then pay it to Inland Revenue Authority of Singapore (IRAS). For example, if your product costs S$50, you sell it for S$53,5, then you pay S$3,5 to the government.
When does a company have to pay GST?
You file GST once a quarter, no longer than 30 days after the reporting period ends. Even if your company has nothing to report, but it is GST-registred, you should file a ‘nil’ return.
Does a company need to pay GST for services it gets?
When you buy goods or services, and you pay the sum with GST already included by the supplier.
However, you can refund GST when filing your tax return. Let’s say you buy products for S$100 (7% GST included, that is S$7). You use them and get a profit of S$1,000. You must pay S$70 as GST. You can claim the initial S$7 you paid (S$70 — S$7) and pay S$63 of GST to the government.
What goods and services are subject to GST?
Singapore applies GST to most goods and services, except four.
- Sale or rental of unfurnished residential property
- Importation or local supply of investment precious metals
- Financial services, like issuing a debt security
What are the benefits for a voluntary GST registration?
If you buy inside Singapore, but mostly sell overseas, a voluntary GST registration might reduce the running costs of your company.
Besides, it might improve your image for business partners, the government and the customers.
Every company whose annual revenue exceeds S$1 million is required to register for GST. So most companies that are registered have passed that threshold. If you register before that, you would get a small reputation boost.
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Singapore Goods & Services tax guide
What is GST Registration?
GST registration is informing the Singapore government that your company will now pay Goods and Services Tax. Only companies that make S$1M in revenue a year or more have to pay GST. So once you’ve reached the mark, you need to let the Inland Revenue Authority in Singapore (IRAS) know.
To register, you need to fill in the GST F1 form and submit it to IRAS. You’ll have to prepare quite a lot of paperwork (see the detailed checklist on IRAS website). If you hire Osome, we’ll take care of all the documents for you.
Is GST Registration mandatory in Singapore?
GST registration is mandatory if your company’s annual revenue has reached S$1M or is going to reach that mark soon. If your company makes less, the registration is up to you: there’s a process in place for voluntary GST registration. In some cases, voluntary registration makes more sense and can actually help you save on taxes.
Why understanding GST Registration is important?
As Singapore is a pro-business country, it takes abuse of the GST system seriously. Abuse here would mean whenever companies are unfairly overcharging customers or evading their tax responsibilities.
As a way of trying to encourage consumers and companies to be more vigilant regarding GST charges, IRAS grants up to 15% cash rewards to informants who report companies that have falsely charged GST or failed to pay GST. In the event of a violation, a company may be fined up to S$10,000 and pay a penalty equal to 10% of the tax due from the date the company has been required to register for GST. In other words, the company would be liable for all GST payments since the date it had to register for GST, even if no GST was collected from its customers.
What is GST Return?
All GST registered businesses are required to file GST F5 tax returns with IRAS.
The guidelines to filing GST returns are as follows:
- Tax returns for GST must be filed electronically through the myTax Portal either on a monthly or quarterly basis.
- A business still needs to file a NIL return even if no GST transactions occurred during an accounting period.
- After submitting F5 returns, companies have a month to pay GST to IRAS.
- A company should report both its input tax and its output tax.
In order to calculate a company's net GST, it must subtract its input GST from its output GST. Output tax is the GST that the company collected from its customers. Input tax is the GST that the company paid on purchases from suppliers or on imported goods.
How to calculate GST?
The GST, or Goods and Services Tax, is a value-added tax on purchases. Only the final consumer of goods or services pays GST - purchases by other businesses are exempt from GST (they are charged GST, however, the charges are credited against the GST they charge). Singapore’s current GST rate is 7%.
The GST rate (7% in Singapore) is calculated by multiplying the pre-tax cost by the GST rate. The cost of GST is then added to the purchase.
Example: $100 of goods x 7% GST = $7 GST
$100 of goods + $7 GST = $107 total
Why register for GST?
You’ll have to register your company for GST when your company’s revenue and taxable income exceeds S$1M in revenue for the past 12 months. Even before your company hits this amount, you may want to voluntarily register for GST.
Here are some reasons why. You can voluntarily register your company for GST registration number. It makes your company look established. There is a psychological effect on clients and customers as they will think your company is of a certain size and generates a sizable revenue.
Another benefit of registering for GST is that you can claim the GST that you paid to your suppliers. When you are a GST-registered business, the GST you pay to other companies is called input tax. This tax can be claimed from IRAS.
Who needs GST Registration?
- Companies that have reached S$1M in annual revenue.
- Companies that can forecast reaching S$1M in annual revenue soon.
- Companies that buy in Singapore a lot and sell mostly overseas, as they might benefit from claiming back more GST they paid.
Is my company required to register for GST?
It is compulsory for your company to register for GST if your total taxable turnover meets either of the following conditions:
- According to the retrospective view, more than $1 million was earned at the end of the calendar year. If your taxable turnover at the end of the calendar year is more than $1 million, you must register for GST by 30 Jan. You will be registered for GST on 1 Mar.
- According to the retrospective view, more than $1 million was earned at the end of the calendar year. If your taxable turnover at the end of the calendar year is more than $1 million, you must register for GST by 30 Jan. You will be registered for GST on 1 Mar.
- Companies that buy in Singapore a lot and sell mostly overseas, as they might benefit from claiming back more GST they paid.
According to the perspective view, more than $1 million is anticipated in the next 12 months. You must register for GST within 30 days of forecasting your taxable turnover to be more than $1 million in the next 12 months, and you will be registered on or before the 31st day following your forecasting date.
Taxable turnover includes local sales of goods and services, export sales, and provision of international services.
It is entirely possible for you to voluntarily register after carefully considering whether you are subject to GST registration.
How long does GST Registration take?
The registration itself takes 10 working days from submitting the GST application form to getting the GST number. But preparing all the paperwork necessary to apply may take time. The list of required documents is extensive, and you even have to attach proof that you’ve completed an IRAS educational course on GST.
Keep in mind that once your company has it the S$1M annual revenue mark, you have 30 days to register for GST. We advise you to plan ahead and file for voluntary registration a bit earlier.
How can I check a GST Registration Number in Singapore?
In Singapore you can check a company’s GST registration number online. Go to the Inland Revenue Authority in Singapore (IRAS) website and type in the company’s details. You can check one company using its name or up to 4 companies that you have UEN number, GST registration number, or NRIC.
Can I switch from another accounting firm to Osome?
Absolutely. We make the transition seamless on your end. We’ll get in touch directly with your current accounting service provider, take over all your financial documents, and audit them to make sure your company is compliant. We check for any loose ends with HMRC, organise historical data, and then prepare and file necessary reports. We offer up ongoing advice about relevant tax exemptions, helping you be smarter with your taxes. Now that your accounting is in good hands, you can focus on what you do best: running your business.
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