GST Registration for Companies in Singapore

 

What is GST?

GST, also known as Goods and Service Tax (GST), is similar to the Value Added Tax (VAT) in many other countries in the world. GST is a consumption tax that is added to the price of most products and services sold for domestic consumption in Singapore. As it’s almost always included in the price on the shelf you probably don’t give it a second thought.

Singapore’s GST is currently at 7%. GST is exempted for the sale and lease of residential properties and most financial services. 

 

Does my company require GST Registration?

In Singapore, GST is only required for GST Registered Businesses.

Only businesses that exceed S$1 million in annual taxable turnover are required to register. However, companies with revenues below this threshold can voluntarily register as well.

 

How can GST Registration affect my business/company?

Once the company has registered for GST, the company:

  • may need to add GST to your prices

  • will need to send that extra money collected from GST to IRAS

  • can claim back any GST that are charged on business supplies

 

How does GST work?

The GST on any item is designed to be paid by the consumer in the end, rather than by the businesses involved in its supply.

For example:
Manufacturer A sells Bread to Supplier B for S$3.69, including S$0.24 of GST. The S$0.24 GST is paid to IRAS.

Supplier B pays S$3.69 to Manufacturer A, but claims back the S$0.24 of GST from IRAS. This essentially means that no GST was paid by B.

Supplier B then sells the bread to Buyer C for S$12.30, including S$0.80 of GST. Buyer C pays the full S$12.30 to Supplier B, of which S$0.80 is paid to IRAS. 

This means that only the consumer at the end of the supply chain paid for the GST.

 

Why should a business voluntarily register for GST?

A business or company may wish to voluntarily register for GST. Some of the considerations may be as follows:  

  • The turnover of the company is near S$ 1 million, the minimum amount for GST registration. By voluntarily registering, the company need no constantly monitor their turnover to avoid exceeding the limit. 

  • If the company has significant purchases from suppliers who are GST registered, it may be more profitable if they are able to claim the GST paid from IRAS if they are GST registered as only the non-GST registered consumer at the end of the supply chain will have to pay GST. 

  • If the company has a significant number of consumers who are also GST registered companies, it may be more preferable for their consumers if the company is also GST registered so that the consumers will also be able to claim the GST returns from IRAS.

  • However, if customers are not GST-registered, registering for GST may result in consumers paying a higher price for products and may affect the business in terms of competitiveness.

  • Another consideration is the cost and responsibility of GST submission. GST registered companies will have to file tax returns monthly or quarterly. This may result in extra administrative costs for the company as well. 

If the company deems that GST registration will be beneficial for it, the company or business can voluntarily register for GST as well. 

 

What are the companies’ responsibilities after becoming GST Registered? 

Once the company has applied to register for GST, the company will receive a confirmation letter from IRAS confirming that the company is registered for GST.

On the effective date of GST registration, the company must start charging and collecting GST.

GST registered businesses must file a GST F5 tax return to IRAS. Depending on the filing frequency, this will have to be returned monthly or quarterly.

 

What is the frequency for filing of GST? 

There are two options for GST registered companies: Monthly or Quarterly.

  • GST tax returns must be filed electronically through myTax Portal.

  • If there are no GST transactions during an accounting period, the business must still file a nil return.

  • Companies must pay GST to IRAS within 1 month after filing an F5 return.

  • Companies must report both their input tax and output tax.

 

How to I apply for GST Registration?

GST registration can be done online via the e-Service on myTax Portal. In order to apply for GST registration, the steps are as follows:

Step 1: Determine your company type

Is your company intending to register for GST: Compulsorily or Voluntarily? 

Step 2: Complete the E-learning course

For voluntary registration, the company director/ sole-proprietor/ partner/ trustee/ preparer of GST returns must complete two e-Learning courses – ” Registering for GST” and ” Overview of GST” – and pass the quiz

Step 3: Submit your application for GST registration

Step 4: Processing of application

Step 5: Receive application results and effective date of registration

If your application is successful, a letter will be sent to your registered address to notify that you have been GST registered.

The letter will provide the following details:

  1. Your GST Registration Number

    This is the number you have to print on your invoices, credit notes and receipts; and

  2. Your Effective Date of GST Registration

    This is the date when you have to start charging and collecting GST on your taxable supplies. You must not charge or collect GST before the effective date of your GST registration.

 

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