Singapore’s Goods and Service Tax (GST) requires registration from a few different business types which either operate in Singapore or conduct business with Singapore residents. Those required to file for the GST are primarily businesses operating in Singapore with a taxable turnover exceeding 1 million SGD, or those offering digital or non-digital imported goods or services to Singapore residents. Additionally, some businesses may register voluntarily for this tax as there are potential benefits when conducting transactions with other businesses that have also registered with the GST.
As a GST-registered company, failure to comply with the GST can result in penalties or fines, so it is important for you to understand and fulfill the responsibilities required of you by the GST system. Below, we outline some of the key responsibilities GST-registered companies have.
Charging GST on taxable supplies:
As a GST-registered company you are required to charge GST on taxable supplies of goods and services. Supplies subject to the GST include most goods and services sold in Singapore, however, there are some exceptions (e.g., financial services and residential properties). These supplies and services are subject to a standard rate of 8%.
When conducting transactions that include a GST charge, display your GST registration number on those invoices and receipts and make sure the amount of GST charged is clearly stated.
Collecting GST on behalf of the government:
GST charged to customers needs to be collected and retained so that it can be paid to the Inland Revenue Authority of Singapore (IRAS). Payments need to be made on a regular basis; this is typically once every three months. The amount paid will be dependent on the volume of your GST transactions.
Keep accurate records of your GST transactions and have sufficient funds available to pay the GST when it is due.
Claiming input tax credits:
GST-registered companies are entitled to input tax credits which they can claim for GST paid on business related purchases and expenses. You can claim GST paid on these expenses as a credit against the GST that you have collected from your customers.
To claim input tax credits, you will need to keep accurate records of your GST transactions. Retain valid tax invoices and receipts for all purchases made for your business.
Filing GST returns:
GST returns are used to report your GST transactions to the IRAS. These reports include the GST collected from your customers and the input tax credits claimed for your business purchases and expenses.
You will need to file GST returns regularly. You can do so online through the IRAS e-Service portal or by filling out a hard copy of the GST return form and submitting it by mail, or in person, to an IRAS service center.
Keeping accurate records:
You are required to keep accurate records of your GST transactions. This includes invoices, receipts, and other documents related to your taxable supplies and business purchases. Accurate records are necessary for claiming input tax credits, filing GST returns, and demonstrating compliance with the GST system. You are required to keep these records for a minimum of five years.
Depending on your specific circumstances, you may have further responsibilities as a GST-registered business in addition to those listed above.
For example, GST-registered companies that import goods into Singapore need to apply for import permits and pay GST on those goods. Similarly, GST-registered companies that supply digital or non-digital services to consumers in Singapore need to register for and charge GST on these supplies under the Overseas Vendor Registration (OVR) scheme.
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As a GST registered company, you need to be aware of the various rules and regulations that apply to the GST system in Singapore. This includes the requirements for charging, collecting, and paying GST, as well as the rules for claiming input tax credits and filing GST returns. To ensure compliance with these rules and regulations, we recommend consulting with a tax professional and reviewing the information provided on the IRAS website.
Non-compliance with the GST system can result in penalties or fines, so it is important to take your responsibilities seriously and fulfill them properly. Be careful to charge the correct GST rate on your taxable supplies, to accurately report your GST transactions when filing returns, and to keep accurate records of your GST transactions.