Companies liable for GST registration
Companies operating in Singapore are liable to GST registration if several conditions are met:
• the taxable income of the business in the last three-quarters of the year and at the end of the calendar quarters was set up above $1 million; businessmen who consider that the taxable revenue for the next financial year will be below this value (proven with documentation in this sense) may be exempt from GST registration;
• the investor is expecting that the taxable income will be established at the total value of a minimum of $1 million for the following 12 months.
According to the local legislation, companies in Singapore are required to register for GST in a period of a maximum of 30 days after the end of the quarter. For the second situation, in which the businessman expects a turnover above $1 million, the company will have to register for GST before the 31st of July.
Late registration is sanctioned through a fine of up to 10,000 $ or a penalty of 10% of the due value of the GST. A waiver will generally apply for those applicants who register later than the deadline but disclose this fact upon registration. The residual GST may be paid in installments in certain cases. Our accountants in Singapore can provide you with more details on registration, late registration, and specific requirements.
Those business owners in Singapore who have a taxable turnover from zero-rated supplies can apply for an exemption from GST registration. For this purpose, the applicant must show that zero-rated supply makes up for more than 90% of the company’s total taxable supplies. A special form is submitted with the Singapore Inland Revenue Authority, and, upon approval, the applicant will no longer need to file GST returns. Beneficiaries must notify the Comptroller if any change occurs from their first application for the GST exemption. Should they cease to qualify for this exemption they will need to register for GST.
What does GST registration mean for Singapore companies?
As mentioned at the beginning of this article, the GST is an indirect tax and Singapore companies with GST numbers are required to collect this tax from their clients and customers and then forward it to the Inland Revenue Authority. It is important to note that a company registered in Singapore is not automatically issued a GST number, as it must apply for it. Also, GST registration in Singapore is not compulsory right after the business is incorporated.
There are specific conditions that lead to GST registration, however, there are also companies exempt from this procedure.
Our accounting firm in Singapore can offer detailed information on the requirements related to GST registration and the formalities that need to be completed.
We invite you to read about the GST registration procedure in Singapore in the scheme below:
GST registration steps in Singapore
- Step 1: business owners need to determine if they are required to register for GST, according to the annual taxable turnover.
- Step 2: the e-Learning course – those investors who register voluntarily need to complete two e-Learning courses for the purpose of registration and as a general overview.
- Step 3: submit the application – the application for GST registration and the supporting documents are to be submitted to the Inland Revenue Authority.
- Step 4: application processing – additional information may be requested apart from the supporting documents already provided during the previous step
- Step 5: receive the notification of registration – once the company is registered, the applicant will receive a notification at the company’s registered address.
Exceptions from GST registration in Singapore
Not all companies are required to register for GST in Singapore, and among these are the following:
- companies with a taxable turnover obtained from zero-rated supply of goods and services;
- companies subject to retrospective view GST registration provided that their annual turnover is not expected to exceed 1 million SGD;
- companies expecting their turnover to be lower due to specific reasons.
Even if in these cases GST registration is not required, companies have the obligation of monitoring their annual turnover. Also, they are required to submit documents that attest their request for exemption from GST registration.
With continuous support from our Singapore accountants, you can monitor the financial situation in your company and decide whether to register for GST or not.
Voluntary GST registration
A mandatory requirement for companies seeking to register for GST in Singapore voluntarily is for one of the directors to complete two e-learning courses – one related to GST registration and one related to the payment of the goods and services tax. This requirement also applies to sole traders, trustees in management companies and members in partnerships. It is good to know where the person appointed to handle GST registration, payment, and filing matters is an accountant or an accredited tax advisor, the company representative is no longer required to participate in such courses. This is why you can work with our certified accountants in Singapore.
Foreign companies registering for GST in Singapore
Foreign companies are considered Singapore non-resident entities with places of management in the city-state. When making supplies of taxable goods and services, these entities are required to register for GST in Singapore just like any other local business. An additional requirement for these companies is that they are required to appoint a local agent to handle the registration process and later the payment and filings with the IRAS.
It is useful to know that a new type of GST registration has been approved by the IRAS. This is the Reverse Charge and Overseas Vendor Registration which has entered into effect starting with the 1st of January 2020. The new mechanism applies to businesses selling imported goods online or on marketplaces.
Our accountants in Singapore can offer more information on the Reverse Charge and Overseas Vendor Registration scheme. If you are looking to register for GST in Singapore as a foreign businessperson, you can rely on our specialists.
GST schemes in Singapore
Registering for GST in Singapore has its advantages, and one of them refers to the schemes enabled by the government to help companies. The following programs are currently available for GST-registered companies:
- the Tourist Refund Scheme which enables tourists buying goods in Singapore from GST-registered companies to ask for refunds for the goods purchased;
- the Cash Accounting Scheme which is available for small entities with annual sales below 1 million SGD;
- the Major Exporter Scheme created for large companies importing goods sold on the Singapore market;
- the Zero GST Warehousing Scheme which is available for companies transforming their warehouses into zero-GST warehouses;
- the Import GST Deferment Scheme which enables companies to pay the GST with the monthly GST returns.
Singapore also has various industry-specific GST schemes. Our accountants can offer more information on them.
GST registration and approval timeline in Singapore
The following information is useful when it comes to GST registration in Singapore:
- it takes no more than 30 minutes to file a GST registration application;
- mandatory registration is approved within 2 business days;
- voluntary applications are processed in approximately 10 business days;
- companies becoming liable for GST registration must register within 30 days once all the criteria are met.
We invite you to watch the following video on GST registration in Singapore:
GST rates in Singapore
Businesses set up in Singapore are usually taxed for their goods and services transactions at the standard rate of 7%. However, it is important to know that the export of goods is exempt from GST; the same rule applies in the situation of international services, the provision of financial services, the lease and sale of residential property in Singapore and local supply of investment precious metals.
Registered corporations are required to file the GST returns quarterly. Some can choose to file them on a semi-annual basis or on a monthly basis. Tax refunds are usually received within a three month period after the submission deadline.
If you need further information on the GST registration in Singapore, please contact our accounting firm for assistance.