Goods and Services Tax (GST) is a consumption tax that is levied on the supply of goods and services in Singapore and the import of goods into Singapore.
In most cases, registering for GST is compulsory when:
- the turnover of your business is more than $1 million for the past 12 months; or
- you are currently making sales and you can reasonably expect the turnover of your business to be more than $1 million for the next 12 months.
Otherwise, you can choose to be voluntarily registered for GST. Companies with annual revenue of below S$1million, GST registration is optional.
You may apply for voluntary GST registration even though you are currently not liable for compulsory registration.
- Your annual turnover is not more than $1 million, or
- You only supply goods outside Singapore (out-of-scope supplies), or
- You make exempt supplies of financial services that are also deemed as international services
Yes. The sales tax in Singapore is called Goods and Services Tax (GST). The current GST rate is 7%. Only GST-registered businesses are allowed to levy the GST on their sales or invoices.
A Taxable Supply is a supply of goods and services made in Singapore other than an exempt supply. GST is chargeable on a taxable supply of goods and services made by a taxable person in the course or furtherance of his business. However, any GST incurred by a taxable person on business purchases used in making taxable supplies can be recovered from the Comptroller of GST.
There are 2 broad categories of exempt supply. They include the sale and lease of residential properties and financial services specified in paragraph 1 of the Fourth Schedule to the GST Act. GST will not be charged on the exempt supply. Generally, any GST incurred in making exempt supplies cannot be claimed as input tax.
An Out-of-Scope Supply is a supply which is not made in Singapore (for example, sale of goods from China to India where the goods do not enter Singapore). Since these supplies fall outside the scope of GST, GST is not chargeable on these supplies.
“Taxable Turnover” is the total value of all taxable supplies made in Singapore (excluding GST) in the course of furtherance of business. This includes the value of all standard-rated (GST at prevailing rates) and zero-rated (GST at 0%) supplies but it excludes exempt supplies, out-of-scope supplies and the sale of capital assets.
For the purpose of determining your liability for GST registration, the value of exempt supplies that are international services under Gst Act should also be excluded from your total taxable supplies.
GST is a self-assessed tax. This means that businesses are required to continually assess the need to register for GST. Registering for GST is compulsory when the turnover of your business is more than S$1 million for the past 12 months or is expected to be more than S$1 million in the next 12 months.
Once a person is liable to register, he should inform the Comptroller of GST within 30 days from the day the liabilities arises. If the total turnover of your company is more than S$1 million in any past 12 months and you have not informed the Comptroller of your liability, you should do so immediately.
If the Turnover of the company for the past 12 months is less than S$1 million, no action is required from you.
The only exception is if you are certain that your combined turnover for the next 12 months will be not more than S$1 million.
You need to assess if your turnover in any past 12 months or the next 12 months is more than S$1 million.
- If it is, you need to apply for GST Registration immediately.
- If it is not, no action is required from you from this point. However, you need to continue to monitor your turnover and ensure that you register for GST once your liability arises.
You have to monitor your turnover by splitting the 12 months into 4 quarters. Quarter means a period of 3 months ending on the last date of March, June, September or December. You are required to be register for GST if:
- At the end of any quarter, where the total value of your turnover in that quarter and the previous 3 quarters is more than S$1 million.
- At any time, if you have reasonable grounds to believe the value of your turnover in the next 12 months will be more than S$1 million.
“I am a director of several companies, partner of multiple partnerships and owner of sole-proprietorship businesses. What is the registration rule for each type of business engagement to determine my liability to register for GST?”
Incorporated companies are separate legal entities. The registration liability of an incorporated company will be determined on its own. It is required to register for GST if its turnover for the past 12 months is more than S$1 million or is expected to be more than S$1 million in the next 12 months.
To determine the registration liability for sole-proprietorship business, a sole-proprietor (who can be an individual or a corporate entity) will need to combine the turnover from all his trade, provision or vocation and all his sole-proprietorship businesses. If the combined turnover is more than S$1 million or is expected to be more than S$1 million or is expected to be more than S$1 million, he will be liable to register. The registration will be in the name of the sole-proprietor.
“My turnover is more than S$1 million in the past 12 months but I do not want to be registered for GST. Can I be exempted from registration?”
No. It is compulsory for you to register for GST once your liability to register arises. The only exemption is when you are certain that your turnover for the next 12 months will not be more than S$1 million. For example if you have plans to wind up your business in the next 12 months.
If your taxable supplies are wholly and substantially zero-rated supplies, you may apply for exemption from registration.
If you are granted an exemption, you need not file GST returns. However, you will not be able to claim the GST incurred on your business purchases of goods or services.
“Zero-Rated Supplies” refer to export of goods or international services. For example, provision of international transport.
Once you are liable to register, you are required to inform the Comptroller for GST within 30 days from the date your liability arises. The Comptroller will register you within the next 30 days. You can be registered earlier than this date (subject to the Comptroller’s approval).
“If I fail to register and did not collect any GST from my customers, will my GST registration still be backdated?”
Yes. You will be required to account for and pay the GST on all your taxable supplies made from the date that you should be registered and to pay the relevant penalties. This is so, even if you did not collect any GST from your customers.
If you are late in registering for GST, you will be guilty of an offence and be liable on conviction to a fine up to S$10,000 and to a penalty equal to 10% of the tax due in respect of each year commencing from the date on which you are required to make the notification or to apply for registration.
As per Singapore Company Laws, responsibilities of directors are quite onerous for all directors including nominee director. The nominee director is required to pay for the company liquidation charges in case the foreign client is no longer reachable. Our nominee director service is provided by the reputable and trustworthy professionals and to safeguard interests of the nominee director, we require that a security deposit be kept with us for as long as our nominee director service is active.
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