Knowing Singapore GST information for Your Company
Goods and Services Tax, commonly known as GST, is a value-added tax in Singapore. This applies to products manufactured, and also on most all the services and products offered. GST, which was started on April 1st, 1994, is equivalent to VAT, typical in many nations.
As per the Singapore Minister of Finance, goods and service tax would be levied on goods imported and on goods supplied. Since July 1st, 2007 this indirect tax is charged at the rate of 7% on the selling price of goods and services and when goods are imported by all the manufacturers registered under the GST Act. The new tax structure aims to handle both domestic and international services equally.
To avoid the confusion related to the Singapore GST information, let’s go through some of the commonly asked questions.
When is Your Company Required to Register for GST in Singapore?
To register for GST you need to do the self-assessment for your business quarterly. Registering for GST comes with two sections: mandatory and voluntary registration.
GST Registration is Mandatory When:
- Over the last 12 months, the company’s revenue has exceeded 1 million S$– considered as the retrospective view OR
- You are anticipating the business’ sales to surpass S$1 million during the following 12 months – defined as a prospective basis. That covers any partnership/agreements that you may have negotiated and anticipated sales to reach S$1 mill over the following twelve months.
- You have to register the GST in less than one month from the forecast date. If late, the registration date will be back-dated.
GST Voluntary Registration:
You can even apply to fill out a form for GST even if you’re not obligated to file, based on the company activities. The company ought to have export plans or may have begun operations in Singapore.
After you have a voluntary license, you will have to stay enrolled for a minimum of 24 months. You will need to comply with the GST rules, file the GST final report quarterly, and keep all of the documents for five years, even when the company has stopped working, and you have withdrawn from GST. The relevant tax authorities are also expecting you to meet any specific provisions levied.
Getting an Exemption From Registering Under the GST:
When your company only produces zero-rated products, it can qualify for the GST tax exemption even though the taxable inventory meets the registration requirements. It helps you to bypass GST filing regulatory conditions and corresponding quarterly GST returns. When over 90% of overall taxable products seem to be zero-rated and the input tax exceeds your output tax, IRAS can then accept the exemption.
If a Firm is Registered for GST, What is It Expected to Do?
- You need to have a minimum of five years of maintaining both company and financial documents.
- Bill and pay for 7 percent GST for supplies of product/service manufactured in Singapore (basic-rated supplies).
- You will have to file correct GST reports as well as pay the correct tax on time. You need to file every GST report electronically in one month before the end of every budget period.
- There will be a 5 percent levy on missed/delayed payment on that same tax amount owed by the given deadline.
- If there are any alterations to the company like GST billing address, company basic law or property rights, and shareholder(s) or partner(s) information, it is necessary to notify the Controller inside 1 month of any modification.
- If you are unable to file GST returns or if you are filing late, it will be a crime punished by a penalty of a maximum of $ 5,000 and a jail period of six months in case of non – payment.
- You have to submit proof of payment/customer processing tax receipts for your regular-priced materials.
Can You Describe the Registration Process of GST?
The revenue authorities are receiving the GST F1 e-form must be submission, including the required supporting documentation. If the company is in collaboration, you need to give the e-form GST F3 containing information with the GST F1 form. For foreign enterprises, group enrolment, and departmental registration, there are different procedures/forms available. Foreign registrants have to nominate a local representative to work on their behalf. They also have to submit a letter specifying the same, together with the registration form.
The process to register under the GST Act takes about three weeks to complete. After you have successfully enrolled for GST, you should get a written statement from GST Registration notice. This notice should contain the company’s GST number, the date on which the company operates as a GST approved entity, your registration schedule and time schedules, and any particular guidelines. You should always register your GST returns online.
How Does the Firm Claim the GST Input Tax?
- You may have paid the GST input tax when goods and services were introduced into Singapore. This is also applicable if you have traded with a reliable company registered under the GST Act. Also, you are entitled to claim the GST input Tax provided you meet all the terms required.
- You need to claim the GST input tax within the same period mentioned in the invoice permit or tax invoice or the date when you register your company accounts.
- If you wish to claim for the GST input tax on the exempted goods and services, then you need to make sure that the transaction is satisfying the De Minimis Rule.
- Sometimes, companies can file for the GST input tax even if they have not been incorporated or registered yet.
- You need to repay for any previously claimed GST input tax if the suppliers have not received any payment from you in the last 12 months
Which category of Goods and Services Needs to Be Charged GST by the Company?
When the business offers the consumers refunds on a large number of supplies or provides the consumers with discounts on their instant payment, then it is eligible for the GST claim and should add GST in the purchase invoices.
The GST charges will be zero-rated if you are trading with international consumers and if it comes under section 21(3), GST Act.
Goods and service tax is payable on all items offered to customers within the national borders of Singapore.
The IRAS has the authority to charge GST from the amount collected by your company (also called output tax).
You may very well claim GST on certain company expenditures you incur (also called input tax).
They allow you to incur GST due for payment by clients and customers as per your business promotional plan. Whenever you obtain any payment from the consumers, the amount can be considered to be GST inclusive.
When is the Firm Needed to Submit GST Returns?
- A company has to submit the GST return for every quarter of the FY. The firm needs to submit e-form GST F5 to the IRAS with the time limit of a month past quarter
- It is highly imperative to mention the amounts in SGD.
- Remember to include the output as well as the input tax to get the rebate for that quarter. You should not get confused with the amount that you will be getting. They will always differ from each other.
What Are the Accounting Records the Firm Must Maintain?
Organizations have to maintain their corporate operation paperwork properly. Your organization needs to maintain a clear track of business activities. You also need to have the source papers, financial statements and calendars, banking information, and all other details of relevant transaction fees. For example, purchase receipts, receipts, debit notes, contractual arrangements, payment coupons, investment portfolios, bank instructions, sales, and purchase documentation or records of third parties obtained via suppliers and retailers.
It is essential to maintain all the records of proof that are handwritten or electronic format.
The sales figures for the organization are determined in terms of the documentation submitted to the IRAS at the time of requesting Singapore GST information.
You should maintain all financial records like journals, sub-ledgers, general ledgers, and others that indicate your company’s financial position
Is It Possible for a Firm to Ask for a Change in the GST Accounting Periods
- You must inform the IRAS about the changes that you’ve made to the company records. You may ask to bring changes in the GST form filing frequency if the modifications happened at the end of the financial year.
- If your business’s financial year does not coincide with the financial year of IRAS for claiming GST, then it would be advisable for the company to use the authority to provide the company with special filing dates.
Can the Company Cancel Its GST Registration?
A company can always ask for cancellations of its GST registration voluntarily. However, they can also cancel the GST registration under the below-mentioned situations.
- When the company has stopped working.
- If your business is no longer trading on taxable products and services and continues to be like this in the future.
- If you are no longer the owner of your company after selling it off to someone else. The new owner of the company will be liable for filling out the GST tax.
- You can also cancel your GST registration if the structure and nature of the company have got changed. Let’s say if you have converted your partnership into sole-proprietorship, then the future aspects of the company will also change. So you need to decide accordingly.
If you are looking forward to claiming GST in Singapore, it is advisable to clear all your doubts first. 3E Accounting firm is one of the best advisory firms to provide you with every detail about Singapore GST information. They are a reputed goods and services tax service provider, and the members of their team are highly qualified and experienced in their field. GST registration is crucial for the company. With that, your business can benefit from the new taxation system.