FAQ ON GST
GST is a consumption tax that is charged on the supply of goods and services in Singapore and the import of goods into Singapore. GST is an indirect tax currently at 7 percent. This tax is applied to nearly all supplies of goods and services provided by GST registered business in Singapore.
GST tax is charged to the end consumer therefore GST normally does not become a cost to the company. Businesses merely act as collecting agents on behalf of Singapore tax department. In other countries, GST is known as the Value-Added Tax or VAT.
You need to register your company for GST when:
• The taxable turnover of the company exceeds S$1 million for the past 12 months, or
• If the taxable turnover of the company in the next 12 months is expected to exceed S$1 million.
In order to determine if your company needs to register for GST, you are expected to monitor your company’s taxable income at the end of every quarter.
Businesses that have exceeded S$1 million in taxable turnover during the last 12 months are required to register for GST within 30 days from the end of the previous quarter on the occurrence of this event.
Businesses that expect to exceed S$1 million in taxable turnover during the next 12 months must register for GST within 30 days of such determination.
A. When a GST-exempt business decides to register for GST voluntarily, it will need to satisfy any of the below-mentioned criteria:
· Your business makes taxable supplies;
· Your business makes only out-of-scope supplies. Out-of-scope supplies mainly refer to sales of goods which did not enter Singapore and goods in transit;
· Your business makes exempt supplies of financial services that are also ; or
· Your business procures services from overseas service providers and you would not be entitled to full input tax credit even if you were GST-registered.
For companies who opt for voluntary GST registration must complete 2 e-learning courses, " " and “ ” as well as pass a quiz. Do note that the Comptroller may also impose other conditions on your GST registration. These e-learning courses are not required if:
- You have experience of managing other existing GST registered businesses; or
- The person who prepares your GST returns is an Accredited Tax Advisers (ATA) or Accredited Tax Practitioners (ATP); or
- The business is applying to be registered under the Overseas Vendor Simplified Pay-only Registration Regime.
The cost of being GST-registered may outweigh the benefits that you can enjoy. As voluntarily registered businesses must remain registered for two years, you should assess the cost and benefits over a two-year period before registering and the following are the areas you should consider:
- More responsibilities of being GST-Registered
- Have to invest time and resources to train staffs in GST accounting
- Possible hefty penalties for non-compliance (e.g., failure to file on time)
- If your customers are not GST registered, you may find it more difficult to increase your selling price to include the GST chargeable, especially for price sensitive customers with possibility of losing them
Registration is compulsory once your total taxable turnover exceeds $1 million.
However, if you are certain that your total taxable turnover for the next 12 months will not exceed $1 million because of specific circumstances (e.g. large-scale downsizing of business) and can substantiate this with documentation, you will not be required to register for GST.
If zero-rated supplies make up more than 90% of your total taxable supplies and being registered will lead to you claiming GST refunds, you may choose to apply for exemption from GST registration.
Your effective date of GST registration will be backdated to the date you ought to have been registered.
You are required to pay the GST on taxable supplies made from the date of registration even if you did not collect any GST from your customers.
No. GST should only be charged on sales made on or after the effective date of GST registration. Once your application is approved, a letter bearing your GST registration number and the effective date of GST registration will be sent to you.
If I have collected GST prior to my application for registration, what should I do?
If you have wrongfully charged/collected GST from your customers, you should notify the Comptroller of GST in writing with the following attachments:
o Summary of sales for which GST has been wrongfully collected (i.e. invoice date, value of sale and GST collected)
o Copy of invoice issued
o Cheque made payable to “Comptroller of GST” for the amount of GST wrongfully collected