Singapore’s reputation as a business-friendly region attracts several foreign investors. In addition to it, the government implemented laws to control the business hub. One of the most common taxes levied in Singapore on the supply of goods and services is the Goods and Services Tax (GST).
With a few minor feature modifications, it is nearly identical to value-added tax in other nations. The GST is a broad-based consumption tax levied on imported goods and collected by Singapore Customs. In addition, GST is charged on all other goods and services in the nation.
The majority of financial services, the distribution of digital payment tokens, the sale and leasing of residential properties, and the importation and local distribution of investments in precious metals, on the other hand, are some of the things that are exempt, according to the Inland Revenue Authority of Singapore (IRAS).
A GST-registered business in Singapore is required to collect GST from clients who purchase products and use services. To support public spending that helps Singaporeans, this collection will be given to the tax authorities. The cost covers security, healthcare, and education. Currently, GST is a 7% tax that customers must pay.
Refer to our guide on GST filing Singapore for more information.
ADVANTAGES OF A SINGAPORE GST-REGISTERED COMPANY
Enhanced Brand Name
The competition in the Singaporean corporate world is fierce, with numerous companies competing for positions as market leaders. A business that has registered for GST gives off the impression of being established and puts it on par with other market leaders in their niche.
When customers learn that the business is GST registered, they make optimistic estimates about its size and likely revenue. Many people will gain trust as a result, and in time, this will result in sales and recommendations.
Lower Individual Income Tax rates
Due to its advantageous business and personal income tax system, Singapore has become alluring to the majority of individuals. The tax revenue growth report allows the government to monitor the amount of corporate income taxes collected, allowing it to keep the personal income tax rates as low as possible.
Low cost of business operations
Due to its effectiveness, Singapore’s advantageous tax system has been regarded as one of the best in the world. Foreign investors are not the only ones who profit from this tax system; the government also saves money on administrative and collection expenses. By passing tax charges to the final customer, Singapore GST registration lowers the cost of doing business. This prevents firms from incurring any tax expenses, which has a significant positive impact on a company’s bottom line.
Promotes saving and investing
Singapore only taxes citizens when they purchase goods and services for consumption. This results in lower individual tax rates, and as if that weren’t good enough, money set aside for investments and savings is exempt from taxation. Singaporeans pay GST on every transaction they make, therefore it is only reasonable to exempt their savings and investments from further taxation.
Simpler Record-Keeping
In order to register the business for GST, the applicant must maintain accurate records of all of the company’s transactions. Even though it could seem like a burden, doing this might improve the way the company manages its finances and makes decisions.
Opportunities for Expansion
Businesses that seek to expand their activities or joint ventures domestically or internationally must register for GST. It makes it possible for the business to participate in tenders and contracts that call for GST registration.
Input tax recovery
Companies that have registered for GST are qualified to submit claims for input tax credits on the GST they have already paid on products, services, and rents related to their business. This improves cash flow and reduces total tax liabilities.
Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for further assistance with registering your business for GST in Singapore.
