In Singapore, GST is a consumption tax levied on the supply of goods and services and the goods imported into Singapore from other countries. GST is an indirect tax, provided by GST-registered businesses applied to the selling price of goods and services. The current GST rate is 7%.
The tax system in Singapore marked the beginning of a new era on 1st April 1994 with the introduction of Goods and Services Tax (GST). Goods and Service tax is the tax levied on importing goods into Singapore and supplies of goods and services in the country.
In 1994 the GST rate was 3%, then it was increased to 4% in 2003, the next revision of 5% was made in 2004, and in 2007 the same GST rate was revised to 7%. Since then, the GST rate in Singapore stands still at 7%.
The Goods and Service Tax is governed by the Inland Revenue Authority of Singapore(IRAS). The aim of introducing the GST was to reduce the burden of paying corporate and personal income taxes. Apart from that, GST also plays an essential role in maintaining a steady revenue stream for the government.
Here Is What We Will Cover in This Article
Introduction to Singapore GST
What Is GST in Singapore? What Does GST Mean for a Company in Singapore? The GST and Types of Supplies Singapore GST Rates What is "Taxable Turnover"? Various Singapore GST Schemes to Help Businesses Are there any Industry-specific GST Guidelines? Singapore GST Calculation GST Tax Codes GST Accounting GST When Goods Are Imported from Overseas Locations What Is the Singapore GST Voucher?
Singapore GST Registration
When Do Companies Need to Register for GST? - Compulsory GST Registration - Voluntary GST Registration Exemption from Registration Package Fee for GST Registration Services Essential Requirements Needed Before Registering for GST What Are the Benefits of Registering for GST? Procedure For Singapore GST Registration Penalties for Late GST Registration Circumstances under Which Singapore GST Registration Can Be Cancelled
What Is a UEN and ACRA number?
How to Get a UEN? What Is the Format for a Unique Entity Number? Agencies That Can Issue a UEN Where Should UEN Be Displayed? What Is ACRA? What Functions Does ACRA Have? Is UEN the Same As the ACRA Number? GST & UEN Under Deskera Books
Singapore GST Return Filing
Key Points About Filing Singapore GST Tax Returns Calculating Output Tax and Claiming Input Tax Credits What Is GST Form 5? Steps to Complete GST Form 5 Penalties for Late and Non-filing of GST Return Singapore GST e-Filing Procedure
Singapore Tax Reports Available Under Deskera Books
- GST Form 5 - IRAS Audit File
What Is GST in Singapore
In Singapore, GST is a consumption tax levied on the supply of goods and services and the goods imported into Singapore from other countries. In many other countries around the world Goods and Service Tax is also known as Value Added Tax.
Goods and Service Tax is an indirect tax, provided by GST-registered businesses applied to the selling price of goods and services. The current GST rate is 7%.
The end customer is usually the ultimate payee of GST. Thus, GST never becomes or behaves as a cost to the company. On the contrary, businesses act as tax collecting agents on behalf of the Singaporean government.
In short, the basic principle of GST is summarized as follows:
What Does GST Mean for a Company in Singapore?
For every GST-registered company, must collect GST from their customers for the goods and services provided. You must then pay the tax collected and must be paid to the tax authorities every quarter via Goods and Service tax filing.
For example, for your product or service, if you charge S $ 200, you must invoice them S $ 207 (S$200 for your service plus 7% GST).
Companies in Singapore are not automatically GST-registered. Companies that have met certain conditions have to apply to IRAS to become a GST registered company before it is allowed to charge and collect GST.
The GST and Types of Supplies
Singapore Goods and Service Tax classifies supplies into four categories. These 4 types of supplies are further classified into Taxable Supply and Non-Taxable Supply.
- Standard-rated supplies
- Zero-rated supplies
- Exempt supplies
- Out-of-scope supplies.
Singapore GST Rates
Note: However, between the year 2021-2025, depending on a variety of political factors, lawmakers plan to introduce an increase the GST to 9%.
What is "Taxable Turnover"?
The total value of all supplies that are made taxable in Singapore (excluding GST) in the course or furtherance of business is known as "Taxable Turnover." It includes the value of supplies to all standard-rated(GST 7%) & zero-rated(GST 0%), but it excludes the out-of-scope supplies and sale of capital assets and exempt supplies.
Under Section 21(3) of the Singapore Goods and Service Act, the value of exempt supplies that are international services should also be excluded from your total taxable supplies to determine your liability for Goods and Service Tax registration.
Various Singapore GST Schemes to Help Businesses
The Government of Singapore has introduced various assistance Goods and Service schemes. These schemes help to ease the cash flow for businesses and help create a pro-business environment.
Below listed are some of the GST Schemes,
Are there any Industry-specific GST Guidelines?
The Singapore Tax department has prepared the Goods and Service Tax guides for each industry. It provides you with specific information on how GST affects your sector.
Click here to know more about the GST guides for each industry
Singapore GST Calculation
- To calculate Singapore GST at a 7% rate is very easy: just multiply the GST exclusive value, say $300, with 0.07, i.e $300 * 07 = $21 (GST amount)
- To get GST inclusive amount just multiply GST exclusive value $300 by 1.07, i.e $300 * 1.07 = $321 (GST inclusive amount)
- If your price/value includes GST, then to get the GST part the inclusive amount you need divide the GST inclusive amount, say $214, by 107 and multiply by 7, i.e ($214 / 107) * 7 = $14 (GST Value)
- To get GST exclusive amount while knowing GST inclusive value, you need to multiply GST inclusive price $214 by 100 and then divide the result by 107, i.e $214 * 100 = $21400 / 107 = $200
GST Tax Codes
There are multiple tax codes specified by IRAS in Singapore to be used for different type of sales or purchase transactions.
Types of Supplies
Below mentioned are five types of Supplies along with the tax codes for GST purposes supply for goods and services.
Let us see below mentioned these different types of supplies along with the tax code in detail.
The value of the exempt supply must be reported in the GST return.
Types of Purchases
Below mentioned are 7 types of Purchases along with the tax codes for GST purposes purchase for goods and services,
- Disallowed expenses;
- Purchases from non-GST registered suppliers
Imports Under A Special Scheme
The GST paid to Singapore Customs must be reported in the GST return for the value of the import and the import.
Imports Under the Import GST Deferment Scheme
The value of the import must be reported in the GST return. It is important that accounting software is able to record imports (including the import permit numbers).
Purchases from Non-GST Registered Suppliers
Purchases by Partially Exempt Traders
Generally, GST-registered businesses are only entitled to recover the GST incurred that is directly attributable to the making of taxable supplies but are also subject to certain exceptions, the GST incurred that is directly attributable to the making of exempt supplies cannot be claimed.
For the purpose of determining the amount of input tax claimable, partially exempt traders should further classify their standard-rated purchases as one of the following four categories:
As business owners, you need to deal with more important accounting tasks on a day-to-day basis.
Deskera Books helps the companies to enable and meet all mandatory filing requirements as set by the Inland Revenue Authority of Singapore (IRAS). Through Deskera Books, companies can share their purchase, sales, and GL transaction details with IRAS on time to meet their IRAS' periodic audits. Users can also generate tax invoices and credit/debit notes as per IRAS guidelines.
Let us see below how GST accounting can be used with Deskera Books.
An invoice is a payment request. It lists the goods or services that you have supplied to your customer and what they owe you in return. Your invoices are also tax documents that are issued when billing your customers.
With Deskera Books, you can generate tax invoices, simplified tax invoices, and credit/debit notes with ease. Once the invoice is created, it furnishes essential details like the product name and model, unit price, discount, tax applicable, and even payment terms.
The generated tax invoice helps users obtain input tax claims and streamline the process of filing GST returns. This makes preparing and monitoring of GST returns hassle-free.
Journal entries are the recording of any transactions that occur in business operations. Based on the accounting standards, all the transaction records are classified into different accounts.
Using Deskera Books, you can view the GST received journal entries based on the sell and buy transactions in your organization.
Expense is an outflow of money to a person, group, or financial institution for purchasing goods and services.
Using Deskera Books, all the expenses that you have incurred will automatically appear on the Expense page. Deskera users also have the flexibility to manually create a GST Direct expense and GST prepayment accounts in the system.These GST Expenses and GST accounts will be applied to the Buy transactions in the system.
A deposit is a sum of money paid into a bank for safekeeping or a pledge.
Using the Deskera Books system, the deposit term means the inflow of money to the organization. You can create two different types of GST Deposit accounts, such as direct payment and advance payment in the system. These GST Deposits accounts will be applied to the Sell transactions in the system.
GST When Goods Are Imported From Overseas Locations
GST is imposed on almost all goods imported into Singapore, regardless of whether the importer is GST-registered. However, GST payable is suspended or deferred if there are any specific reliefs, exemptions for certain goods, or special schemes.
All Imported goods are subject to GST or duty payment. A custom permit is required to account for the import and tax payment of the goods.
Below are the Dutiable goods, which incur both GST and duty,
- Intoxicating liquors
- Tobacco products
- Motor vehicles
- Petroleum products
All others are non-dutiable goods and incur only GST. 7% GST is imposed of the CIF (cost, insurance, and freight) value, which includes duties (if it is a dutiable good) and other charges, costs, and expenses incidental to the sale and delivery of the goods into Singapore, whether or not shown on the invoice.
The tax is always paid on the Value of Import when goods are imported to Singapore. The import value will include any customs duty payable and the Cost, Insurance, and Freight (CIF), etc. The Singapore Customs charge the GST on the imports.
GST on Imported Goods
The amount of GST payable is computed based on the CIF value (cost, insurance, freight) of the goods plus all duties payable.
GST need not be paid for goods (except for dutiable products) with CIF value of not more than $400.
When the CIF value is more than $400; the entire sum will be subject to GST.
When Does the Customer Pays GST For Imported Goods
GST Calculation on Imported Goods
Goods and Services Tax is imposed on all goods imported into Singapore.
The calculation is based on the below key points,
- Customs values of the goods, plus all duties, or
- Value of the last selling price(LSP) plus all duties, if there has been more than one sale (when the last buyer is the party declaring the payment permit)
Examples on calculating of GST for Non-Dutiable Goods and Dutiable Goods imported to Singapore
GST is payable @ 7% x Customs value or Last Selling Price (LSP)
If 100 boxes of Pens were bought at S $ 900 by company X, the overseas freight, handling, and insurance charges to ship the Pens to Singapore cost S $ 100. Company X sold the Pens to Company Y for $1,500 before the Pens reaches Singapore. What is the GST payable by Company Y?
GST payable by Company Y = 7% x S$1,500=S$105
GST is payable @ 7% x (Customs value or Last Selling Price + payable duties)
If a motor car is imported by company X and was bought at S $ 100,000 on Free on Board (FOB), it incoterms the overseas freight, handling, and insurance charges to ship the car to Singapore cost S $ 1,000. Assuming the excise duty for motor cars is 20% of the customs value, the total GST payable amount will be?
Customs value of car = S$101,000
Duties payable = S$101,000 x 20%=S$20,200
Thus, GST payable = 7% x (S$101,000 + 20,200)=S$8,484
What Is the Singapore GST Voucher?
The Singapore Government introduced the Goods and Service Tax Voucher in Budget 2012, a permanent scheme to help the Singaporeans with lower income and cope with the increasing now and then cost of living.
Every year, the eligible Singaporeans can look forward to subsidies and support given under this scheme. It comes in three separate components - Cash, U-Save and MediSave. The permanent nature of the GST Voucher makes it sustainable support, rather than temporary relief.
Below mentioned are in the detail components of Vouchers,
1. CASH: Provides some cash for immediate needs to the lower-income Singaporeans. It is paid in August each year.
2. MEDISAVE: For elderly Singaporeans aged 65 and above, it provides a top-up to their CPF MediSave account to support their medical needs. It is paid in August each year.
3. U-SAVE- It provides quarterly rebates to offset their utility bills to lower- and middle-income HDB households. They are paid in January, April, July, and October each year.
Singapore GST Registration
When Do Companies Need to Register for GST?
The Goods and Service Tax registration in Singapore falls into two categories: Compulsory Registration and Voluntary Registration. As it is a self-assessed tax, you need to monitor whether you need to be registered for GST.
Compulsory GST Registration
The tax needs to be collected by Companies when:
- The taxable turnover of the company, when it exceeds S$1 million for the past 12 months, OR
- If the taxable turnover of the company in the next 12 months expects to exceed S$1 million.
To determine if the companies need to register for GST, they are expected to monitor their taxable income at the end of every quarter.
Businesses that have exceeded S$1 million in taxable turnover during the last 12 months are required to register for Goods and Service Tax within 30 days from the end of the previous quarter when this event occurred.
Companies that expect to exceed S$1 million in taxable turnover during the next 12 months must register for GST within 30 days of such determination.
Voluntary GST Registration
When a GST-exempt business elects to register for GST in Singapore, voluntary registration is made even though it isn't required by law.
If your business satisfies any of the below-mentioned criteria, you can voluntarily register for Goods and Service,
- For Supplies which are Taxable (local sale of products/ Service provision);
- Supplies that are Out-of-scope (e.g., refer to sales of goods that did not enter Singapore and products in transit.); or
- For supplies of financial services that are exempted (e.g., provision of loans)
For companies who opt for voluntary GST registration must complete 2 e-learning courses and pass a quiz. There is not required to take the courses and quiz if:
- You have experience managing other GST-registered businesses;
- The person preparing your Goods and Service Tax returns is an Accredited Tax Advisor or Practitioner; or
- The person making your GST returns has completed both courses within the past two years.
Once you comply with the Singapore GST regulations, you must remain registered at least two years after you are registered voluntarily. To maintain all your records, filing the Goods and Service Tax return on time every quarter, helps businesses get de-registered from GST and ceased for at least five years. If the tax authority imposes any additional conditions, you may also have to comply with it.
Exemption from Registration
If you only make zero-rated supplies, you can apply for exemption from GST registration, even if your total taxable turnover exceeds the S$1 million.
IRAS will approve the exemptions if your total taxable supplies are zero-rates and more than 90%, and, if your input tax is higher than your output tax.
Package Fee for GST Registration Services
Essential Requirements Needed Before Registering for GST
Below are the measures that need to be in place before a company can register for GST:
- The business/company must already be registered with ACRA
- The company/business must already have a Business Bank Account
- Business activities for the next 12 months with the expected revenue must be clearly defined.
- Documents must be required depending on whether the company has started sales.
- The earlier sales must have to be exceeded $ 1 million already for companies with compulsory registration.
What Are the Benefits of Registering for GST?
As a GST registered company below mentioned are some of the benefits you can get for your business,
Procedure for Singapore GST Registration
Step 1: Registration Type Needs to Be Determined
Firstly you need to determine whether your company is GST registered under compulsory registration Or voluntary registration.
You can Speak to your accountant if you are unsure before Goods and Service Tax registration in Singapore. Depending on the nature of your business and type of registration, the GST registration process differs slightly. So make sure that you get this correct around the first time itself.
Step 2: Completion of the e-Learning Course (Only for Voluntary Registration)
For voluntary registration, your sole-proprietor/company director/trustee must complete two e-Learning courses of GST returns:
There is no need to to take these courses mentioned above if,
- The business has proven experience in managing other existing GST-registered businesses by company director, partner, trustee or sole-proprietor; or,
- Where the person prepares your GST returns is an ATA(Accredited Tax Advisers) or ATP(Accredited Tax Practitioners); or,
- Under the overseas vendor where the business is applying to be registered is simplified Pay-only under the Singapore registration regime.
Step 3: Application Completion and Submission
In Singapore, via myTax Portal all application for GST registration must be submitted.
Below mentioned are the few things to keep in mind:
- For accessing the GST registration e-Service on myTax Portal, you need a CorpPass. At the end of the application process, you will be asked to attach the supporting documentation. So, make sure all documents are prepared well in advance.
- For GST payment and refund, businesses that are registered voluntarily for GST are required to be on the GIRO plan.
- After you have submitted your GST application online, the completed original copy of the GIRO application form needs to be sent to '55 Newton Road Singapore 307987'.
Step 4: Need to Wait for Your GST Registration Application to Be Processed
To process a GST application, the IRAS usually takes ten working days. You may be asked to provide more additional documents during this processing period.
Step 5: An Effective Date of Registration Is Confirmed for Your Application
The IRAS will send a confirmation letter once your application is successfully processed to your registered address to ensure that your business is now registered under GST.
The below details will be mentioned in the confirmation letter:
- GST Registration Number: This is a number that you have to print on your invoices, credit notes, and receipts.
- Effective Date of GST Registration: You must not charge or collect Goods and Service Tax before the effective date of your GST registration.
This notification letter copy can also be found by logging in to myTax Portal and selecting "Notices/Letters."
Penalties for Late GST Registration
Within 30 days, the Singapore companies must apply for GST registration, upon meeting the criteria for compulsory registration. The IRAS will impose a fine charge of up to S$10,000 and a penalty of 10% of owing Goods and Service Tax if any companies are late in registering. Other consequences include paying for the GST of sales that were made even if GST was not collected.
Circumstances under Which Singapore GST Registration Can Be Cancelled
Following are the circumstances, wherein a company will need to cancel its Goods and Service Tax registration in Singapore,
- If you do not intend to make any taxable supplies or have stopped making it in the future
- In case company ceases
- If you sell your business to another person as a whole
- In a calendar year if your sales figures do not exceed S$1 million
- When you are sure, your sales figures will not exceed S$1 million in a calendar year
What Is a UEN and ACRA number?
UEN is Unique Entity Number, which is unique a 9 or 10 digit identification number issued by the Singapore government via the ACRC(Accounting and Corporate Regulatory Authority) operating within the country to all entities
This number is used to uniquely identify each registered entity, which helps them conveniently interact with various government agencies under this single identification number. It also allows to file corporate tax returns and to apply for import and export permits
How to Get a UEN?
For a Singapore company assigning UEN is a regular part of company registration in Singapore. With ACRA, as you go through the standard incorporation process, you need to complete all the steps, including the UEN, receive. It is the last part: for company formation, after you have submitted your application, ACRA will process it, then accepts the company registration, and will return you with the approval and your new UEN number. The whole process can typically take less than an hour after you or your corporate secretary submit the paperwork.
What Is the Format for a Unique Entity Number?
The UEN is comprised of the following:
Agencies That Can Issue a UEN
Below mentioned are agencies that can also issue UEN depending on the type of entity apart from ARCA
- International Enterprise Singapore
- Islamic Religious Council of Singapore
- Ministry of Communications and Information
- Ministry of Culture, Community, and Youth
- Ministry of Defense
- Ministry of Education
- Ministry of Finance
- Ministry of Foreign Affairs
- Ministry of Health
- Ministry of Law
- Ministry of Manpower
- Ministry of National Development
- Monetary Authority
- People's Association
- Registry of Societies
- Singapore Land Authority
- Smart Nation and Digital Government Office
Where Should UEN Be Displayed?
There are several documents where the UEN needs to be displayed on including:
- Order forms
- Other types of printed marketing material
- Websites and other online materials
What Is ACRA?
ACRA is an Accounting and Corporate Regulatory Authority of Singapore. It is responsible for company formation, regulation, and cessation under the government body. It helps keep data on all enterprises in the country and provide the legal framework for your business to comply.
What Functions Does ACRA Have?
- Registers all new companies in Singapore
- Provides the companies with UEN
- Administers Companies Act
- Collects corporate details, data for nominee directors, corporate secretaries, shareholders, etc.
Is UEN the Same As the ACRA Number?
Yes, businesses and local companies registered with ACRA had earlier been issued what was known as the ACRA Registration Number – which is now known as UEN.
GST & UEN Under Deskera Books
Using Deskera Books, under compliance details, users with an organization based in Singapore are required to fill their GST and UEN No. These fields may vary based on the country selected in the Tax Residency field
Singapore GST Return Filing
Key Points About Filing Singapore GST Tax Returns
The companies must file Goods and Service Tax returns to the Internal Revenue and Tax Authority of Singapore (IRAS). Following are the important points,
- Goods and Service Tax returns must be filed either on a monthly or quarterly basis electronically.
- The companies must file for Goods and Service Tax returns via the GST-F5 tax form and will also be required to report their output and input tax.
- Within one month after filing a GST-F5 return company must pay GST to IRAS
- The GST amount is due one month for Goods and Service Tax return and payment from the end of the accounting period.
- The business must file a nil return if there are no transactions during the accounting period.
Calculating Output Tax and Claiming Input Tax Credits
Firstly, every company's net GST must be calculated when filing a GST-F5 return by taking the company's output tax GST minus its input tax GST.
- Output tax- The company collects this GST from the customers.
- Input tax- The company pays the GST on imported goods and purchases from suppliers.
The company must pay the GST net amount to IRAS if the output tax is greater than the input tax(i.e., net negative GST). The IRAS owes the company a refund if the input tax is greater than the output tax(i.e., net positive GST)
What Is GST Form 5?
A document that contains the details of the income which taxpayers have to file with the tax authorities is known as GST Form 5. The Goods and Service Tax returns have to be filed by the business owners, including sales, purchases, GST on sales, and paid on any purchases.
Steps to Complete GST Form 5
- Fifteen boxes need to be filled under GST Form 5.
- To access your Goods and Service Tax Return portal, log in to myTax Portal.
- GST Return figures have to be in Singapore Currency.
- Please refer to Foreign Currency Transactions if you have any transactions in foreign currency to know how to report them in Singapore currency.
- You need to e-File a nil return (i.e., fill in '0' for all boxes) if you do not have any transactions during the prescribed accounting period.
Penalties for Late and Non-filing of GST Returns
If the GST return filing is not done on or before the due date, a submission penalty of $200 is imposed, and the Goods and Service Tax return will remain outstanding for each month additionally(up to a max of $10000).
Also, the late submission penalty is imposed if you fail to file GST returns, and this may attract a fine of up to $5000, and in default of payment will lead to imprisonment of a term up to 6 months.
Singapore GST e-Filing Procedure
Step 1: Authorise Users for GST E-filing
a). For GST-registered Company or Partnership
All GST-registered companies or partnerships will need to:
- Unique Entity Number (UEN) need to first register for a CorpPass Admin account
- For the persons transacting with IRAS create a Corp pass user accounts; and
- To the CorpPass accounts assign GST e-service and other relevant IRAS digital services
Please refer to the two-page instruction where the Directors or Partners are filing the GST return for their businesses.
Please refer to CorpPass for the GST-Registered Business guide if you are filing the GST returns as a third party or employer on behalf of an LTD company or partnership.
b). For GST-registered sole-proprietor, GST group, and divisional registrants
First, set up a CorpPass GST admin account under the registered GST Group or Divisional registration, a sole proprietor or business for their respective GST registration number, i.e., GSTN.
An email will be received to the GST CorpPass admin after his/her account is created. Follow the below steps to activate your GST CorpPass admin account,
- Click on www.corppass.gov.sg then on Services and Reset Password;
- Fill in your GST registration number, and CorpPass ID (e.g., 12345CP1) stated on the email;
- Log in with your Singpass; and
- Enter a new password for your account.
Refer to this two-page instruction for sole-proprietors who are filing their GST returns.
Step 2: Log in to Mytax Portal
Use CorpPass to log in to myTax Portal once you are authorized for GST e-filing for "Business Tax Matters" and retrieve your organization's GST return (e.g., GST F5).
Step 3: E-filing Your GST Returns
Complete and e-File your GST return once you have logged in.
Step 4: Of the Acknowledgment Page save a Copy and Make Payment
Make the payment (if applicable) to IRAS by the due date and Save a copy of the acknowledgment page.
Singapore Tax Reports Available Under Deskera Books
GST Form 5
GST Form 5 is a document containing the details of the taxpayer’s income hat include sales, purchases, GST on sales, and GST paid on purchases
Before you file your GST, using Deskera Books you can use the GST Report function to review your GST transactions. Also, your periodic filing of GST will be made easier using the GST Form 5 generated by the system.
IRAS Audit File
Every business is required to prepare and submit IAF to IRAS in order for them to conduct an audit on their GST Report and GST Form 5 Report.
Using Deskera Books, the users can generate the IAF file conveniently and make sure that the data filed in the tax report are accurate and comply with the IRAS tax audit regulations.
Deskera Books ensures that your GST and tax submissions to the IRAS (Inland Revenue Authority of Singapore) are easy, simple, and accurate. It also allows users to check, edit, and select the correct GST for every purchase and supply transaction.
Thus, Deskera Books is an easy-to-use accounting software that facilitates recording and processing different financial transactions required to manage your business.