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The thorough Guidance to Manage the Goods and Services Tax in Singapore for Personal Income as well as Corporate Income

Singapore has no principle profits tax and the Capital decline rates are also not approved as reductions. The GST is termed as goods and service tax which was implemented in Singapore on 1st April 1994. The GST act of Singapore is modeled based on New Zealand GST legislation and the UK VAT legislation. The IRAS which is termed as the Inland Revenue Authority of Singapore just acts as an agent in the government of Singapore which completes the taxation tasks such as the collection of taxes, administration of taxation, enforcement of GST payment, assessment of taxation. The GST introduction is a means to lower the personal income tax rates as well as corporate income tax rates besides maintaining a stable basement for revenue in government. GST is simply referred to as an indirect tax or tax for expenditures. The present rate of Goods and Services Tax in Singapore is 7%.

The basics of Goods and Services Tax in Singapore

Goods and Services Tax is also called as VAT (Value Added Tax) in other countries. GST is consumption taxation that is implemented for the supplying of goods and services in Singapore as well as importing the goods inside Singapore. This is also termed as an indirect tax which is often represented in the form of a percentage. GST is mainly applicable to the selling price of goods and services from business entities who are registered with GST in Singapore. This tax is mainly charged towards the end consumer and hence it does not create an impact on the company’s cost. The business sectors act as the collecting agent of tax in the place of the Tax department, Singapore.

What does Goods and Services Tax mean for companies in Singapore?

If you hold a company that is registered by GST, then you need to collect good and service tax from the customers who avail of your services or buy products from your business. You have to repay those collected taxes to the tax authorities as per the following norms and conditions. You can understand better on going through the following example.

When you charge your customers in Singapore S$100 for your product or service then you must certainly invoice your business customer to pay S$107 that is Service cost (S$100) plus GST (7%). You collect the invoice GST amount from the clients or customers instead of the tax authorities which must be paid based on quarterly billing to the Singapore tax department through the file of GST taxation. There are a few strategies that must be met by the company for applying to IRAS and becoming a GST registered company. After the completion and verification of the GST process, the company would be allowed to collect and charge GST on consumers.

How to take-up services on goods and services tax in Singapore?

In the case of registering as GST, you can avail the supplies wholly or mainly based on the zero-rated, you can get the application of the GST Comptroller and avail exemption from the registration of GST. the professionals and taxation experts would guide you through the GST taxation areas such as the processing of GST Registration as well as processing the application of GST form from the GST department which has been in circulation from January 2013.

How to deal with the taxation process parallel with the IRAS?

You can simply deal with the IRAS with the help or assistance of professionals or taxation experts. They can generally assist you with the following services such as

  • Processing the application for the GST registration
  • Processing the application for the GST deregistration
  • Processing the management of any kinds of IRAS queries
  • Processing the proper response for any kinds of IRAS queries
  • Processing the errors and its disclosure voluntarily to the IRAS
  • Assisting for mitigation of penalty exposure
  • Managing the audits and respective investigations of IRAS

The general taxation services provided by professionals for goods and services tax in Singapore

There are a few sets of services that can be availed from the professionals and experts in taxation domain and that are given below,

  • Reviewing of GST returns
  • e-filing GST returns
  • Availing Support for the Compliance
  • Availing Review for the GST Compliance (quite applicable for the health check-up GST)
  • Organization of ASK review that is Assisted Self-Help Kit
  • Organization of in-house GST training which is specially customized for a specific type of business transactions
  • Providing ideas on implications of GST for business start-ups
  • Providing ideas on implications of GST for arranging the new business
  • Providing ideas on implications of GST for transactions on cross-border
  • Assisting and creating resolutions on disputes
  • Reviewing on the GST reports of internal controls
  • Reviewing on the GST coding of accounting system logic
  • Providing advice and ideas on the GST reports of internal controls
  • Providing advice and ideas on the GST coding of accounting system logic

How is the GST registration classified?

GST is the self-assessment of the taxation process of business that requires continuous accessibility of the need to get registered as GST. the GST registration is mainly classified into two types.

  • voluntary registration
  • compulsory registration

You can have a thorough understanding of those registrations in the upcoming paragraphs.

When the company should be registered as GST compulsorily?

If your company or business manages to make a turnover of more than S$1 million for the past 12 months which is also termed as a retrospective basis then it is eligible for compulsory GST registration. There is also another kind of basis such as a prospective one where your service or company makes the current sales that are expected to exceed S$1 million in the upcoming period of 12 months.

The agreements or contracts are also taken into account when it comes to the prospective type provided it should provide you the expected revenue of more than S$1 million for the next 12 months. In such a case, you need to apply GST to IRAS within a month. You would be penalized if you fail to register your business with IRAS within the period of the deadline. There are many anti-avoidance provisions to check whether the business entities are not establishing fewer turnovers fakely than their actual threshold and hence avoiding the GST registration completely.

When the company should undergo a voluntary type of registration?

Your company or business can also be undergone a voluntary type of GST register in case of not eligible for compulsory registration and this completely depends on your choice as well as business operations. The business that you carry should hold the plans for the sales domain as well as must have already begun to do sales supplies in Singapore which is mainly taxable. There are also additional sets of conditions when it comes to choosing as registration of GST voluntarily.

After undergoing successful voluntary registration you must remain as the GST registered company for 2 years and must oblige to all the terms and conditions related to GST regulation. You must maintain all kinds of GST records for at least 5 years in case of creasing your business or deregistered from GST. You should also return the GST file every quarter of the time. The tax authority might have levied a certain term and condition and you must always comply with those tax regulations as well as any other additional conditions.

How to carry out deregistration of GST in Singapore?

You could simply cancel your GST registration in a few cases that include stopping your business or selling your entire business to another individual or sales figures less than 1 million SGD. you must consider the 30 days from the date of cessation to submit your GST deregistration form along with the relevant documents to the tax authorities of Singapore.

Which are the companies that can be exempted from registration?     

Though your taxable turnover goes beyond the limits of the GST registration, in case of making zero-rated supplies, you can simply apply for an exemption from GST registration and you can avail the same. You can easily get escaped through the administrative requirements of GST registration as well as the GST filing of the subsequent quarterly period. When your taxable supplies and its total of more than 90% are zero-rated provided with input tax must be greater than output tax, then IRAS would certainly approve the exemption.