Goods and services tax (GST) was first introduced in Singapore as part of the Goods and Services Tax Act (GSTA) on 1 April 1994. The Comptroller of Goods and Services Tax levies this tax upon the supply of goods and services in Singapore by any taxable person in the course or furtherance of a business, as well as upon the import of goods into Singapore.
A GST-registered trader must charge GST on taxable supplies of goods and services made to its customers.
In general, for GST purposes, a supply is either taxable or exempt. A taxable supply is one that is standard-rated or zero-rated.
A standard-rated supply is liable to GST at 7%.
A zero-rated supply means that GST applies to a specific supply at a 0% rate.
If a supply is exempt from GST, no tax is chargeable on it.
A taxpayer who makes taxable supplies is required to register with the Comptroller of GST if:
Businesses with annual turnover of taxable supplies of less than S$ 1 million may request registration on a voluntary basis. The voluntary registration of a person by the Comptroller of GST is discretionary and requires the taxpayer to:
A non-resident overseas business that makes annual taxable supplies in Singapore exceeding S$ 1 million must register for GST.
Upon registration, both residents and non-residents receive a GST registration number consisting of 10 alphanumeric characters.
A person who fails to register for GST may face a fine no greater than S$10,000 as well as a penalty equal to 10% of the tax due for each year from the date on which the person was required to apply for registration. In the case of a continuing offence, the person faces a further fine of S$ 50 for each day during which the offence continues after conviction.
Non-resident businesses that are registered for GST in Singapore must appoint a representative. The representative must keep GST records and accounts, and make payments of GST on behalf of the overseas business it represents. In practice, the non-resident business may only appoint one person at a time to act on its behalf, although a representative may act for more than one principal at any time. The representative must keep separate GST accounts and make separate GST returns, for each principal it represents. No permit is required for the representative.
From 1 January 2007, a GST trader must file electronic GST returns and make GST payments on a quarterly basis tied to the trader's financial year (eg a calendar year trader would file and pay GST based upon quarterly accounting periods ending in March, June, September and December).
Taxpayers may claim input GST as a deduction when submitting the GST return to the Comptroller of GST. The total input tax paid on business purchases can be deducted from the total output tax collected from customers. The resulting difference is the net GST payable or net GST refundable.
The Comptroller of GST normally makes refunds due to GST-registered persons within 30 days from the date of receipt of the GST return. GST refunds can be made via electronic bank transfer, cheque, bank draft or telegraphic transfer.
Accounting records pertaining to accounting periods ending before 1 January 2007 were required to be kept for seven years. Accounting records pertaining to prescribed accounting periods ending on or after 1 January 2007 are required to be kept for five years.
Records can be kept in electronic form as long as the guidelines set out in the IRAS e-Tax guides "Keeping of Records in Imaging Systems" and "Keeping Machine-sensible Records and Electronic Invoicing" are adhered to.
All business decisions today have tax implications, and it is important for a company to manage their income tax requirement efficiently. Our tax professionals will keep you abreast of developments that may affect your business. We collaborate closely with you to identify and implement tax strategies that work best within your organization.
We can also assist you in structuring your executives; remuneration packages that will offer both your company and your staff the maximum tax benefits. For individuals and family held enterprises, we can help you in organizing your financial affairs in the most tax efficient manner.