Commonly known in other countries as Value-Added Tax (VAT), GST is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. GST is an indirect tax, expressed as a percentage (7% as of time written) applied to the selling price of goods and services provided by GST registered business entities in Singapore.
GST tax is charged to the end consumer therefore GST normally does not become a cost to the company. Businesses merely act as collecting agents on behalf of Singapore tax department.
Your liability for GST registration depends on the value of your taxable turnover. This refers to the value of goods and services supplied by you which are regarded as taxable supplies for GST purposes.
Conditions for mandatory GST registration:
Conditions for GST exemption:
- Taxable turnover is solely or mostly from zero-rated supplies
- You are liable under the backwards-looking view but not under the forwards-looking view, and the following conditions are met:
- It is certain that taxable turnover the for following 12 months will not exceed S$1 million
- The taxable turnover is projected to be lower due to specific circumstances, such as large-scale downsizing of business
- You have supporting documentation to substantiate projection
If you are not liable for GST registration, you may still choose to do so voluntarily evaluating the advantages and drawbacks.
Should you be liable for GST registration, you are required to apply 30 days from the date liability arose.
If you fail to register within the stipulated deadline, some penalties might be incurred:
- Your date of registration will be backdated to the date that you were liable to be registered.
- You will have to account for and pay GST on your past sales starting from the effective date of registration, even if you did not collect any GST from your customers.
- You may face a fine of up to $10,000 and a penalty equal to 10% of the GST due. Prosecution action may apply.
However, if you submit an application for GST registration and voluntarily disclose that you are late in registration, IRAS will generally waive the late notification fine and penalties. If you have difficulties paying the GST due on the backdated period, you may be allowed to pay the GST due in instalments.
If you need help with GST registration, feel free to contact us for more information.