Goods and Services Tax (“GST”) is a form of tax that is imposed on the import of goods (collected by Singapore Customs), as well as nearly all local supplies of goods and services in Singapore. This is also known as the Value-Added Tax (“VAT”) in other countries.
There are goods and services that are exempt from GST, and this applies to most financial services, supply of digital payment tokens, sale and lease of residential properties (only), and the importing and local supply of precious metals (for investment purposes). Goods that are exported and international services are zero-rated (not subject to GST).
It is important to note that GST will increase from 7% to 8% in 2023, and further accelerate to 9% from 2024.
As a business, it is required to be registered with IRAS for GST when the taxable Revenue exceeds SGD$1 million.
If the business taxable Revenue does not exceed SGD$1 million, one may still choose to voluntarily register for GST, subject to meeting certain qualifying requirements. Such registrations are prevalent in certain specific industries and sectors (i.e. F&B).
If the business is registered for GST, it must charge GST on all taxable supplies at the prevailing GST rate, except for supplies that are subject to customer accounting. The GST that qualifying businesses charge and collect is known as output tax. Output tax is to be paid to IRAS within a month from the end of the accounting period / qualifying quarter.
If the business is registered for GST, it can also claim the GST incurred on qualifying business – related purchases (including imports) and expenses in the form of input tax.
If you have questions on GST registration, qualifying revenue and expenses, or would like to find out more about local GST requirements, do reach out to us at firstname.lastname@example.org.