Goods and Services Tax Singapore was introduced to lessen the dependence on direct taxes to indirect taxes.
Having one of the most flexible taxation systems, Singapore has kept the tax rates for GST and other taxes relatively lower than other countries.
Submission of GST
GST filing Singapore is applicable to companies exceeding a specific threshold of taxable turnover.
Shorts Business Services help businesses in understanding the procedure of GST. We assist them in calculating their annual turnover and facilitate the companies through the GST registration process.
What Is GST?
Goods and service tax (GST) Singapore is an indirect tax levied on the import and supply of most of the goods and services sold for consumption in Singapore. Singapore has the lowest GST rate in the world at 7%. This 7% tax is levied on the selling price of goods and services. The GST is paid by the end consumer, which is then remitted to the government by the businesses. Hence, GST never becomes an additional cost to pay for the companies. The businesses only act as the tax collector for the government and provide revenue for the government.
GST Filing Singapore Companies
All the GST registered companies have to file GST returns with the Inland Revenue Authority of Singapore (IRAS). Businesses with more than S$1 million annual taxable turnovers are required to register for GST filing Singapore. Companies that register for GST have to collect goods on services tax on every sold or supplied goods and services by charging 7% additional in the cost of the actual price of the goods. Then, the businesses pass on the collected GST amount to government authorities. GST registered companies are mandated by the IRAS and ACRA to file GST returns on a monthly or quarterly basis.
GST Registration Types in Singapore
Goods on services tax is levied on consumption of goods, and once the Singapore companies exceed a certain amount of taxable turnover threshold, they are required by the law to register for GST filing. It is a self-registering process, so the companies have to keep a check on their revenue to assess when they are applicable for GST registration. Businesses also have an option to register for GST on a voluntary basis. They may not fall in the GST returns category, but they can choose to register for GST. All the GST registered companies have to charge GST and file GST returns to the authorities.
Compulsory Registration For GST
Companies are mandated by law to register for GST and file GST returns when:
- When the companies are selling goods and services that are taxable and their annual turnover has exceeded S$1 million in the past 12 months.
- The businesses are expected to exceed its turnover of more than S$ 1 million in the next 12 months.
Companies have to monitor and assess their turnover on a quarterly basis to determine whether they need to register for GST or not. Companies that fulfil any of the criteria mentioned above have to register within 30 days after determining the turnover.
Voluntary Registration For GST
Companies with taxable turnover of less than S$ 1 million in the past 12 months are not required to register for the GST; but, they can voluntarily register for GST if they want to. However, the authorities hold the right of approval for voluntary registration. Voluntary registration for GST Singapore has its benefits due to which companies prefer to do so. They can claim the GST tax incurred on their own business purchases. Especially, the companies offering zero-rated supplies, that is, supplying goods and services in the international market, can also opt for voluntary registration.
GST registered companies do have an option to opt-out of GST registration. It happens when the annual sales or turnover has reduced to less than 1 million SGD. Moreover, when the business is sold to someone else, the former business owner can opt-out of registration.
Benefits Of Registering For GST
GST registration and filing for GSTare beneficial for both the government and businesses. For the government, the benefits are:
- Introducing GST has reduced the tax rates on corporate and personal income taxes, which has initiated international investment in Singapore.
- GST has enabled a steady and stable flow of revenue generation, which helps in strengthening the economy.
- The taxation system is systematic and efficient for the government and requires easy administration and collection of the taxes.
Mostly, large companies and businesses are liable to register for the GST, which indicates their annual revenue generation. This requirement reflects upon their successful business and quality standards, which leaves an impression on the customers and clients. For businesses, benefits are:
- GST does not affect the businesses as the end-user pays for the tax.
- GST is only levied on the consumption of goods and services. It does not apply to the income or savings.
- Goods and services tax is a fair and accurate tax system and imposes a tax only when people are consuming.
Registration Process For GST
The GST registration process is easy and requires the companies to fill in various types of forms. Firstly, the company has to submit an application to the IRAS and different forms as per its business type and structure. It takes around three weeks to complete the whole procedure.
Once the application is approved, the company receives a confirmation letter from the IRAS, which confirms its registration for the GST. Only then can the companies start charging the GST from the consumers. The letter also includes the company's registration number and the effective date of GST registration.
Get GST Filing Services in Singapore
At Shorts Business Services, we provide businesses and companies assistance and guidance on GST, its calculations, GST registration process and help them complete formalities by IRAS for GST filing Singapore. Contact us to make GST filing a convenient and easy process!