GST in Singapore
4 minute read
Goods and Services Tax (GST) in Singapore is a tax on consumer spending. GST is collected on the sale of goods and services to customers or another business. Since it is a consumption tax, GST is one of the four pillars of the Singapore tax structure, including corporate tax, personal tax, and property tax. The present GST rate in Singapore is 7%.
Each business in the supply chain charges GST on sales. They deduct GST from this amount that was paid on the purchase. Several goods and services are exempt from GST in Singapore. Key characteristics of GST include:
In Singapore, a GST-registered business can file a credit claim for input tax and counterbalance it against the Output Tax – the GST collected from customers. Such a business pays GST on the amount of value addition to its goods.
Singapore GST registration requirements
A GST-registered company remains registered for 2 years. When a company is registered for GST, it must charge the tax on supplies at the prevailing rate, excluding relevant supplies subject to customer accounting. This is the output tax paid to IRAS.
On the other hand, input tax is the GST incurred on business purchases and expenses. A business that meets the criteria for claiming input tax is eligible to claim input tax on the purchases and expenses.
This means that only the value added is taxable at each stage of the supply chain.
All GST-registered companies must levy GST and file returns when:
Exemption from registration
In Singapore, there is a provision for exemption from GST registration. A company can apply with the Inland Revenue Authority of Singapore (IRAS) for exemption if it meets the following criteria:
Companies that are exempted cannot file a claim for the GST incurred on purchases for the business. A business must register for GST if it is expected that it will get a credit for the paid goods and services tax.
How to register for GST
Before registering in Singapore, you should have the following information:
The process involves the following steps:
Filing GST tax returns
A GST registered company must file an F5 tax return. If the company does not have any GST transactions during the period, it must file a nil return.
The tax money must be paid to IRAS within 30 days after the return is filed. It is important for a GST-registered business to report input and output tax. While filing an F5 return, the business should compute its net GST. Subtracting output GST from input GST gives the net GST figure.
A business can cancel its GST registration when it stops or is sold to another person. It must submit an application form and required documents to the IRAS within 30 days of cessation.
Benefits of GST registration
GST refund in Singapore
If companies incur more expenses than revenue initially, the company can claim GST refund if it is registered with the IRAS.
Businesses in the export business may claim GST on expenditure. However, exports will be categorised as zero-rated supplies under the GST scheme. As a result, they can claim GST refund in Singapore.
There is a tourist refund scheme for Singapore tourists who make purchases from participating GST registered retailers. Under the scheme, they can claim a refund of the GST paid on the goods carried out of Singapore.
Filing GST Return
A GST-registered company must submit a return to the taxation authority based on the accounting cycle. This is done on a quarterly basis. A GST return indicates the value of sales, exports, and purchases from companies registered for GST in Singapore. It also includes GST collected and claimed during the accounting period.
You can file GST returns electronically. After filing your GST F5 online, your next GST return will be available online before the accounting period ends.
A business can file GST F5 electronically a day after the accounting period ends. IRAS must receive your GST return within one month after the end of this period. It shouldn’t be delayed beyond this.
Submit a NIL return if you do not have any tax due for the period. For delayed filing of returns, a business will face penalties, irrespective of the fact whether the net GST is payable or refundable.
When can I get GST Voucher 2020?
In January 2020, all eligible Singaporean households will receive a GST Voucher of up to $100. You can get GST voucher:
GST Voucher − Cash can be credited only at a local UOB, OCBC, DBS, or POSB bank. Payment by check may take 15 days. Opting for cash gives you a chance to get the money credited quicker to your account than by check.
GST schemes for businesses
There are several government-run assistance schemes in Singapore when it comes to GST. Such GST schemes are designed to facilitate cash flow for businesses.
How to pay
A GST registered business must quote GST-inclusive prices on its displayed, verbally quoted, published, or advertised prices. A business that fails to display GST-inclusive price will be faced with a penalty.
When billing customers, a business must issue a tax invoice when the customer is registered for GST. This enables the customer to use it as a supporting document for filing a claim for input tax on its standard-rated supplies. The document comprises information on the product being sold along with the GST charged.
The tax invoice is not required for submission along with GST returns. Typically it should be issued within 30 days since the supply time. Additionally, a GST-registered business is not required to issue a tax invoice for deemed, zero-rated, and exempt supplies.
It is important to keep all records of your business transactions related to GST. Make your claims on input tax during the accounting period as per the date of the tax invoice.
As a GST-registered Singapore company, you should submit a GST return based on your accounting period. The business must start collecting GST from the effective date of registration.