Singapore firms are required by law to register for GST if their sales are above the threshold specified by the Inland Revenue Authority of Singapore (IRAS). Companies may also apply for voluntary GST registration if they do not fulfil the requirements for mandatory registration.
Refer to GST registration Singapore for more information.
CRITERIA FOR VOLUNTARY IRAS GST REGISTRATION
Singapore enterprises may voluntarily apply for GST registration if any one of the following conditions is satisfied:
- The majority of the company’s sales are taxable supplies.
- The business solely engages in sales of commodities outside of Singapore, or “out-of-scope supplies.”
- Sales of financial services provided by the business are exempt suppliers.
- The company bought services from foreign suppliers, and it is not possible to claim the input tax credit for such transactions.
CONDITIONS FOR VOLUNTARY GST REGISTRATION IN SINGAPORE
Before registering for GST, make sure that you meet all the requirements listed below:
- Before completing the registration form, the firm director, sole proprietor, partner, trustee, or person responsible for preparing GST returns must have successfully completed and passed the “Overview of GST” e-learning course. This is done to make sure that before you register for GST, you fully understand the duties and responsibilities of a GST-registered firm.
The online course is not necessary if:
- The company director, sole proprietor, partner, or trustee has experience running other already operating GST-registered firms; or
- The GST returns are prepared by an Accredited Tax Advisor (ATA) or Accredited Tax Practitioner (ATP); or
- The company has made a registration request under the Overseas Vendor Registration Simplified Pay-only Registration Regime.
- For GST payment and/or refund, submit a GIRO application.
- Submit the guarantee if requested by the Comptroller.
The applicant has to remain GST-registered for at least two years.
The following requirements must be met for the GST registration to remain active.
- Keep a GIRO account open for GST payments and refunds.
- If they haven’t started generating taxable supplies at the time they apply for GST registration, they must do so within two years (or another permitted longer term).
- Complete all responsibilities for a GST-registered business.
- Any additional requirements that IRAS may impose at any time during the registration process.
THINGS TO CONSIDER BEFORE REGISTERING VOLUNTARILY FOR GST IN SINGAPORE
Responsibilities of registering for GST
Once registered, the applicant will act as the government’s agent for collecting GST. What this means is that the applicant has responsibilities to fulfil. They can incur more administrative fees if they fulfil these responsibilities.
An overview of your suppliers
When the suppliers are GST-registered or when the applicant imports products and pays import GST to Singapore Customs, they may profit from GST registration. This is due to the fact that if the applicant meets the requirements for claiming input tax, they will usually be able to claim the GST paid.
However, if their suppliers are not GST-registered, they shouldn’t be charging GST. Thus, there won’t be any GST that can be claimed on the purchases.
Profile of the customers
Once the applicant has registered for GST, they must start charging and collecting GST from the clients.
If their clients are GST-registered, they could be able to raise the selling price to reflect the GST chargeable since they might be eligible to reclaim it.
However, since they won’t be able to regain the GST charged if they aren’t GST-registered, the applicant might find it more challenging to raise their selling price to reflect the GST chargeable. As a result, they would need to absorb the GST.
Types of sales made by the applicant
If the suppliers meet the requirements for zero rating, the applicant may charge GST at 0% when they export goods or provide services to clients abroad.
There will be no effect on their selling price after GST registration because the supplies are zero-rated.
The ability to recover the GST the applicant has paid on their purchases may be one advantage of GST registration.
Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for further assistance.