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What is the Goods and Services Tax
The Goods and Services Tax (GST) is a compulsory consumption tax imposed on the goods and services produced and supplied in and imported into Singapore. According to the Goods and Service Act 1993, the GST is charged to both local and international transactions, as well as imported goods alongside customs and charges.
The GST is collected by Singapore Customs, and it has allowed the Inland Revenue Authority of Singapore (IRAS) to have a standardized tax rate for all commodities, rather than having various tax rates for different items.
The calculation of the GST is based on either the customs value of the goods added to all duties, or the value of the most recent selling price added to all duties should there have been more than one sale. The current GST rate as of January 1, 2023 is 8%, with this rate expected to rise to 9% at the start of 2024.
Who is Required to Register
Local Businesses
Companies and businesses that are owned by a Singaporean resident and operate within the city-state may be liable for GST registration should one of two conditions be met:
- The company’s taxable income in the last calendar year exceeds SGD 1 million
- The company’s expected taxable income in the next calendar year will exceed SGD 1 million
Companies that fall under the former condition will be expected to register for GST within 30 days from the end of the previous quarter. Those that fall in the latter will have to complete this before the 31st of July.
Foreign Companies
Apart from monitoring both annual and expected annual taxable turnover, foreign companies are also required to register for GST in Singapore when producing taxable goods and services, with the additional requirement of having to appoint a Singapore resident as an agent to handle the registration process and the administrative procedures with the IRAS.
Exemptions
Companies with an annual or expected annual turnover of less than SGD 1 million are not required to register so long as sufficient proof and documentation are provided to support their request for an exemption.
Companies can also apply with IRAS for a registration exemption in the following situations:
- 90% of the company’s total revenue comes from zero-rated supplies
- The net balance of the GST from supplies and GST paid for purchases is negative.
GST Registration Process
Compulsory Registration
Step 1: Prepare for Registration
Before proceeding with the GST registration, you should know the annual taxable turnover of your company, as well as the business type that it operates with. You may also want to prepare any relevant records and documents beforehand to ensure a much smoother process.
Step 2: Online Application
In order to streamline GST applications, all applications are now submitted using the myTax Portal. While paper applications can still be processed, these are only allowed in special cases such as when a business is unable to access the online portal.
After logging onto the portal, you will need to provide the following:
- The company’s unique entity number (UEN)
- A General Interbank Recurring Order (GIRO) application form
- The GST F3 form for partnerships and joint ventures.
Application processing may take one to two months, and a representative from IRAS may reach out and request for additional information during this period. It’s important to remember that companies are not allowed to charge GST until they’ve received approval from the IRAS.
Step 3: Notification of Registration
You will be notified upon the successful completion of your GST registration as IRAS will send a confirmation letter verifying this. In the letter, you will find the company’s GST Registration Number, as well as the effective date of your registration. Once successfully registered, you will be able to start charging and collecting GST and display the GST number on all relevant documents.
Voluntary Registration
While companies that don’t meet the SGD 1 million taxable revenue threshold aren’t required to register for GST, these businesses can still do so voluntarily if any of the following requirements are met or will be met in the future:
- The company produces chargeable supplies
- The company handles foreign financial transactions that are exempt supply
- The company only produces supplies beyond the company’s scope
Step 1: Successfully Complete Two e-Learning Courses
While this may be an optional stop for those undergoing the compulsory registration process, it’s required that one of the company’s directors complete the “Registering for GST” and “Overview of GST” courses.
However, this step also comes with its own exceptions. Should any of the following conditions be true, then this step can be skipped entirely:
- The director has managed a GST registered company before
- The company’s GST returns are prepared by an Accredited Tax Adviser or Practitioner
- The company’s GST returns are prepared by someone who has completed these courses within the last two years.
It’s best to also keep in mind that the IRAS may require additional conditions to be met for GST registration and compliance. The IRAS may also cancel your GST registration at any moment should the company fail to meet any of these conditions.
Step 2: Prepare for Registration
To prepare for registration, simply prepare your company’s annual taxable turnover, along with relevant records and documents that may be required. You should also familiarize yourself with the business type of your company.
Step 3: Online Application
All GST registration applications are submitted using the MyTax Portal by IRAS in order to make processing easier. For voluntary registration, you will need to provide the following:
- A General Interbank Recurring Order (GIRO) application form
- GST payment and tax credit
Application processing may take one and a half months, and a representative from IRAS may reach out to you for clarifications or additional information and requirements. During this period, it’s also important to keep in mind that companies can only start charging GST after the successful completion of their registration.
Step 4: Notification of Registration
After ensuring that there are no problems or complications with your application, the IRAS will send a letter notifying you of your application’s approval. The letter will show your company’s GST registration number, as well as the effective date of your registration
GST Registration Made Easy with WealthBridge
Make the registration process easier by partnering with WealthBridge. Our team provides a wide range of corporate services to ensure that your business operates much more efficiently. Let us handle the paperwork and registrations, and just focus on building your company up!
Send us a message to learn more!