GST Registration: GST in Singapore – How to Apply For It

GST Registration: GST in Singapore—How to Apply For It

Foreign businessmen who wish to initiate a company in Singapore must know when they are responsible to register for GST (Goods and Services Tax). It is a process that can differ according to the nature of your startup.

The GST was first implemented in Singapore on April 1^st, 1994. The GST Act is an extension of New Zealand GST legislation and UK VAT legislation. The IRAS (Inland Revenue Authority) in Singapore is liable to collect, assess, administer, and enforce the payment of Goods and Services Tax—the department basically acts as an agent for the government. The GST was primarily introduced in Singapore to lower corporate and personal income tax rates while generating a stable revenue ground for the authorities. GST is currently paid in Singapore at the rate of 7%. It is considered an indirect tax as it taxes expenses.

This guide covers all the main concepts of Singapore’s GST registration system. Below you will find the procedure for GST registration, basic GST registration requirements, responsibilities of a GST registered business, and more. Please keep on reading.

What is GST?

The Goods and Services Tax (GST) is an expenditure tax charged on nearly all services and goods in Singapore. It is also levied on the goods imported into Singapore.

GST is filed at the prevailing rate of 7%. Customers are required to pay this tax when they buy taxable goods and services from GST-registered companies.

GST Registration Requirements

Companies in Singapore who have exceeded a certain threshold for their taxable turnover are required to register for Goods and Services Tax. Singapore companies that still have not exceeded the revenue threshold are not bound by law to register for GST. After the registration, a business must remain registered for two years.

Mandatory Threshold

Businesses in Singapore are required to collect and register for GST when:

• The taxable turnover for the past twelve months surpasses S$1 million.
• The company is about to surpass S$1 million in taxable turnover in the next twelve months.

Businesses that have surpassed S$1 million in taxable turnover for the past twelve years must apply for GST registration within 30 days. You should do this from the end of the last quarter when this event happened.

Companies that are about to exceed S$1 million in taxable turnover during the subsequent 12 months are required to apply for GST registration within 30 days of the determination.

What Is Voluntary Registration?

Companies that are not required to register for GST can also register for GST voluntarily if they want to do so.

As part of voluntary GST registration, the business’s director should complete necessary e-learning courses. The courses that the director must complete are named “Overview of GST” and “Registering for GST.” Taking these courses is compulsory except if any of these conditions are true:

• The business director has experience in running other GST-registered companies.
• The employee who Compiles the Company’s GST returns is an Accredited Tax Practitioner or Accredited Tax Advisor.
• The employee who compiles GST returns for the company has taken the above-mentioned courses within the last two years.

Exemption

Companies who are required to register for GST can receive a registration exemption if they fit on the following criteria:

• At least 90% of the company’s supplies are “zero-rated,” meaning the company’s complete revenue is from the goods or services that are not subjected to GST.
• The net balance of GST paid for purchases vs. GST collected for supplies is negative.

Procedure for GST Registration

Below are the five main steps for GST registration in Singapore:

Step 1: determination—businesses should go over their annual taxable turnover and determine whether they are required to register for GST.

Step 2: E-learning courses—company directors who are planning to register voluntarily for GST should take two e-learning courses for a general overview and registration.

Step #3: Submit the application—the application for GST registration along with all the necessary documents must be submitted to IRAS.

Step 4: application processing—IRAS can ask for additional documents. So, keep all your material updated in case you are requested for additional information.

Step 5: receive the notification—once your company is registered, you will receive a notification of registration at your company’s address.

Note that businesses in Singapore are now required to fill the application for GST registration online via the myTax Portal. Paper applications will only be accepted in special scenarios. For instance, if your business cannot access the online portal, then you can submit a paper application.

What Are Your Responsibilities As A GST Registered Business?

A GST registered business has the following responsibilities:

• Accounting and charging 7% GST on standard-rated goods and services.
• Filing GST returns responsibly and on time, within 30 days from the date of each accounting period. A nil GST return must be submitted if there are no transactions made during the said period.
• Keep appropriate accounting records for at least 5 years.
• Including GST-inclusive prices on your catalog. Failure to comply with this can result in up to S$5,000 of fine.
• Issuing customer accounting tax invoices along with GST registration numbers. This is for standard-rated supplies. A simple tax invoice can be issued if the amount on the invoice does not surpass S$1,000.
• If there are any changes in your business’s circumstances such as ownership constitutions, changes in partnerships, or changes in mailing address, you should inform the comptroller within 30 days.

What Are The Consequences Of Late Registration?

The following things can happen if you apply late for GST registration:

• The date of registration will backdate to the date when the business became eligible for GST registration.
• You may have to pay up a fine of S$10,000 and a possible penalty equivalent to 10% of the GST due. However, in the event of voluntary admission, IRAS usually waives off the penalties and the fine.
• GST for the past sales must be paid from and accounted for the effective date registration. This is regardless of whether GST is obtained from the sales after the company became responsible for GST registration.

If you need help with GST registration for your Singapore-based business, get in touch with Mi2U Business Support.