GST Registration in Singapore
The Goods and Services Tax or GST of Singapore is one of the lowest when compared to the other countries in Asia. A variety of schemes have also been introduced by the Government of Singapore to reduce the GST filing burden of the businesses. The Goods and Services Tax of Singapore was introduced on 1st April 1994.
GST is a tax levied by the Government of Singapore on the import of the goods into Singapore. The GST Tax in Singapore is an indirect tax similar to the Value Added Tax or VAT in other countries.
The main reason corporate businesses go for GST Registration in Singapore is to lower the operating costs, as the real taxpayer is the consumer. The current rate of GST in Singapore stands at 7%.
What is GST Registration?
Goods and Services Tax or GST is collected on the supply of goods and services as well as on the import of goods. In the case of imports, it is collected by the Customs Department of Singapore. It is a kind of indirect tax levied on every step of consumption and production.
The requirement for GST Registration in Singapore is mandated by the turnover threshold set by the authorities. Here, turnover means annual taxable turnover earned through taxable supplies of goods and services by an entity. The threshold limit in Singapore is set at $1 million.
The Compulsory Registration can either be on:
- Retrospective basis; or
- Prospective basis.
Registration of GST on Retrospective Basis
Under GST taxable turnover is to be computed on a calendar year basis, a calendar year basis means for the year ending on 31st December every year. If the taxable turnover of any business entity exceeds $1 million at the end of any calendar year on or after 1st January of a year, then GST Registration in Singapore is mandatory.
Registration of GST on Prospective Basis
GST Registration in Singapore becomes mandatory even if there is a reasonable expectation that the taxable turnover will exceed $1 million in the next 12 months' time period. In order to get GST Registration in Singapore on a prospective basis, the applicant is required to provide the necessary supporting documents for such expected turnover.
Such necessary supporting document can be any of the following:
- Any contract or agreement signed by the applicant;
- Acceptance of the quotation by customers;
- Purchase orders issued by the customers;
- Copy of invoices with the monthly fee issued to customers;
- Record the previous year's turnover and its increasing tread, which shows that it might cross $1 million marks.
NOTE: If you are not sure that you require GST Registration in Singapore based on turnover, then you can use the GST Registration calculator tool provided by authorities. This tool is developed in order to provide assistance for monitoring GST Registration in Singapore requirements.
Even if the business of the applicant is not covered under the mandatory Registration criteria, one has a choice to apply for GST Registration in Singapore on a voluntary basis.
In order to get register for GST on a voluntary basis, the applicant is required to complete two e-learning courses notified by the authority which are as follows:
- Registering for GST
- Overview of GST
Here, the applicant will mean a sole proprietor, trustee, partner, or directors of the applicant company. However, in some cases, there is an exemption from completing the above-stated e-learning courses. Such exempted cases are as follows:
- If the sole proprietor, partner, trustee, or director of the company has managed any other GST registered business.
- If an Accredited Tax Practitioners (ATP) or Accredited Tax Advisers (ATA)is preparing the GST returns.
- Any other person is preparing GST returns, which have completed the required e-learning courses in the preceding two years.
Process of GST Registration in Singapore
Check Liability under GST Law
- Initially, the business is required to analyze if it is liable under the provisions of GST Registration in Singapore. If the businessis liable, then is it on a retrospective basis or prospective basis. If the business is not liable under laws, then also one can apply on a voluntary basis.
- If the Registration is on a voluntary basis, then E-learning courses must be completed by the company director, sole-proprietor, partner, or trustee.
Submission of Application
- The third step is the submission of the application for GST Registration in Singapore. The Registration application can either be filed as an online application or a paper application that is to be submitted in hard copy. While submitting the application for Registration the applicant is required to submit all the required documents specified by the authorities based on the different types of business.
The applicant can submit an online registration application on myTax Portal. The scanned copies of all the required documents should be attached with the online application. For submitting an online application, an e-service access code is required.
This paper application facility has been discontinued in general and was only available to only some exceptional businesses after 1st October 2018. This paper application for GST Registration in Singapore is submitted in Form GST F1.
The applicant is required to mail a duly filled form along with the required documents to ‘The GST Registration Team at the address prescribed by the authorities.
Note: In the case of Voluntary GST Registration in Singapore, the applicant is required to be on the GIRO plan for the payment and refund. Thus, it is required that after the submission of the registration application, a completed GIRO application is mailed to the department as prescribed.
Processing of Application
- Once the GST Registration application is submitted, it is processed by the concerned department in Singapore. The application is processed only after the receipt of the GIRO form by the department. This GIRO form is sent to the bank of the applicant for approval. The approval from the bank takes around 2 to 4 weeks.
The timeline for approval from the banks is as follows:
In the case of an Online Application
- If the GST Registration is on a compulsory basis, then processing time will be 2 working days.
- If the GST Registration is on a voluntary basis, then processing time will be 10 working days.
In case of a Paper Application
- If the GST Registration is on a compulsory basis, then processing time will be 10 working days.
- If the GST Registration is on a voluntary basis, then processing time will be around 1 month.
- Once the application for Registration is filed by the applicant and is processed, the authorities have the power to request any additional documents and information from the applicant.
Receive Notification of Registration
- Once the application for Registration is processed, and every requirement is met with, the applicant is notified of the successful Registration.The applicant is notified by sending a letter to the registered office of the applicant.
- The effective date of GST Registration in Singapore along with the GST Registration number is mentioned on the notification letter issued by the department.
Who is Exempted from GST Registration in Singapore?
In following cases the exemption from GST Registration in Singapore is granted:
- If the taxable turnover of the business is majorly or entirely from the supply of zero rates of goods or services, then the person can apply for exemption from GST Registration in Singapore.
- If the business is liable to be registered on a retrospective basis but not liable to be registered on the prospective basis and the following conditions are met:
a) There is a certainty that the annual taxable turnover of the business will not exceed the threshold limit of $1 million in the next 12 months’ time period.
b) Due to any definite circumstances like downsizing, it is projected that the taxable turnover will be less than the set threshold limit of the business.
c) These projections, as mentioned earlier, should be supported through evidence and documents.
Irrespective of the situation, every business house is required to monitor its taxable turnover at the end of every quarter and calendar year. It is always advised to be vigilant and make sure to register under GST as and when the liability arises. The authority has also introduced a ‘GST Registration Calculator’ tool. This tool can be used by businesses to monitor the GST Registration liability.
What are the benefits of GST Registration in Singapore?
The benefits of GST Registration in Singapore are as follows:
- The process of getting GST Registration in Singapore and later on involving GST filing with the Tax Authority of Singapore IRAS or Inland Revenue Authority of Singapore gives a positive indication to the customers that your business is established;
- GST Registration only occurs when the business reaches a certain size threshold, so registering for the same will ensure that the company has a certain size;
- The cost of conducting business is reduced as the end-user is the ultimate taxpayer;
- GST is levied only on consumption and not on the savings and investment of the owner of the business;
- GST is viewed as a fair tax system i.e., taxes are only paid when people spend their money;
- GST ensures that the government gets a stable inflow of revenue; and
- The collection of GST is relatively simple, which makes it an efficient tax system.