Goods and Services Tax — a value added tax. Singapore GST rate is 7%. It is applied to most of the goods and services exchanged in Singapore. The business is only required to go through GST registration and pay the tax after its yearly turnover exceeds S$1 million. There is a refund: a company can claim GST it has paid for other services. Do not worry, your Singapore accounting services provider knows what to do.
How to register for GST
There’s obligatory and voluntary GST registration. In the first case, you have to register for GST once your turnover exceeds S$1 million per year. You need to submit a form called GST F1, including P&L report, a GST calculator, invoices, etc. You have 30 days after the yearly turnover exceeded S$1 million, but it’s advised to register ahead of time if you expect to reach the mark soon. For voluntary registration, you can apply any time you want, but you have to remain registered for 2 years.
What you need to know about GST
Your business can claim the GST it incurs. If the company uses services or goods from the GST-registered providers, it can deduct GST paid from its tax return. For example, you bought S$100 worth of products, S$7 of that is GST. You used these products to generate income of S$1,000, so you are supposed to pay S$70 as GST tax. You claim S$7, so you only have to return S$63 to IRAS.
GST in Singapore
GST is considered to be a tax that companies collect for the government. Usually the cost is passed on to the consumer, so if you used to sell a service for S$100, you charge $S107 instead. GST is filed on a quarterly basis, within 30 days after the business quarter ended. If the company is GST-registered, it must submit paperwork even if there is nothing to report. In this case, a ‘nil’ return is filed.
What is Out-of-scope GST?
Out-of-scope Supplies are supplies that fall outside the scope of the GST Act. The supply of overseas goods from outside Singapore is an out-of-scope supply under the GST Act.