Singapore Goods and Services Tax (GST) Guide
Compulsory and Voluntary Registration of GST in Singapore
GST registration is not automatic in Singapore. Unless already registered, businesses are required to continually assess the need to be registered for GST, based on their Total Taxable Turnover over a 12-month period.
Compulsory Registration
Registering for GST is compulsory when a company’s Total Taxable Turnover exceeds S$1 million over a 12-month period OR is reasonably forecast to exceed S$1 million over a 12-month period, based on signed contracts and orders.
A company must make a GST application to IRAS within 30 days from the time it is deemed liable to avoid a late submission penalty.
Voluntary Registration
A cost-benefit analysis on the impact GST registration would likely reveal incentives for voluntarily registering for GST when a company is not required to so. For example, it makes financial sense to be GST-registered if most of a company’s suppliers are also GST-registered, as it would reduce actual cost of goods and services by 7%. Also, if a company imports goods into Singapore before exporting out to other countries, or purchases goods from GST suppliers to export out, it most likely will save on the GST charged by these suppliers. Once approved, a company will need to remain registered for a minimum of 2 years and adhere to record keeping, accounting and filing obligations stipulated by IRAS.
Taxable and Non Taxable Goods and Services
Taxable Supplies
Standard Rated Supplies (7% GST)
Most local sales of goods and provision of local services in Singapore fall under this category. For example, sale of a TV set in a Singapore retail shop and provision of spa services to a customer in Singapore.
All goods imported into Singapore are also subject to GST. When goods are imported, the tax is paid on the Value of Import. The Value of import will include any custom duty payable and the Cost, Insurance, and Freight (CIF) etc. The GST on the import is charged based on the Value of Import, which includes cost, custom duty, insurance, freight etc, and is collected by the Singapore Customs.
Zero Rated Supplies (O% GST)
In general, goods that are exported and services supplied to foreign-based consumers (International Services under the GST Act, Section 21.3) fall under this category. For example, sale of a laptop shipped to an overseas address and cultural, artistic, sporting, educational or entertainment services performed wholly outside Singapore. All relevant transaction and transport documents must be retained for filing purposes.
Non Taxable Supplies
Exempt Supplies (GST is not applicable)
- Importation and supply of investment precious metals (IPM)
- Importation of goods specifically given GST reliefs under the GST Act:
- Parcel Post under S$400
- Temporary Imports
- Importation of goods into Zero-GST/Licensed warehouses administered by Singapore Customs
- Importation of goods by GST-registered businesses under Major Exporter Scheme or other approved schemes
Out-of-Scope Supplies (GST is not applicable)
- Sales where goods are delivered from a place outside Singapore to another place outside Singapore, e.g. third country sales where the goods do not enter Singapore
- Sales made within Free Trade Zone (FTZ)
- Sales made within Zero GST/Licensed warehouse
- Salaries paid to employees for their services
- Private transactions