Goods and Services Tax (GST) is known as indirect tax and value-added tax. It is called indirect tax because it does not impose tax directly on the income of a person or entity but on their consumption of goods and services. It focuses on local consumption of goods and services as well as imports. Currently the GST rate in Singapore is 7%.
Singapore GST Registration can be compulsory or voluntary. Compulsory GST Registration is required when your business’ total revenue for the current quarter (March, June, September or December) and past 3 quarters exceeds SGD1 million. It is also compulsory for the business to register if it foresees that its revenue will exceed SGD1 million in the next 12 months. For example, the business signs a contract which would generate a revenue of SGD1.5 million annually.
A business can also register for GST voluntarily. For voluntary GST registration, the business cannot de-register within the next 2 years.
Exempt Supplies or Goods and Services Exempted from GST?
Financial services, import and local supply of investment precious metals and residential properties (lease or sale) are exempted from GST. We call them exempt supplies.
The following transactions are considered out-of-scope supplies:
- Sales where goods are delivered from overseas to another place overseas via Singapore (third-country sales)
- Sales made within Free Trade Zone
- Sales made within zero-GST warehouses
- Private transactions
Generally, international services and export of goods are zero-rated. In other words, you need to show that there is GST but at zero percent.
Why is there Zero-Rated Supplies and Exempt Supplies? Aren’t They the Same?
To layman, zero-rated supplies and exempt supplies appear the same. There is basically no monetary GST imposed on the sales. However, they are very different technically. If a business produces exempt supplies, the GST input tax which the business paid (for its purchases and expenses) generally cannot be recovered from the tax authority unless it meets certain conditions. However, the GST input tax related to zero-rated supplies is recoverable from the tax authority. This is just a very general explanation. For detailed understanding, please refer to IRAS e-tax guide on GST.
Why Engage our GST Services?
At SG Accounting Solutions, our tax consultants are well-trained in all tax types – Corporate Tax, Individual Tax and GST. With our level of tax competency, you can be assured that all your GST filing will be performed accurately and on time. In addition, we are also qualified to performed IRAS Assisted Self-Help Kit (ASK) for Major Exporter Scheme (MES) application and renewal. It is also important to record your accounting transactions correctly to ensure that your GST filing is accurate. You may drop us an email with the form beside to discuss your tax and accounting situation or to incorporate a new company. We provide a wide range of accounting and corporate secretarial services including virtual office address and nominee director.