Demystifying the Singapore Goods and Services Tax (GST)
January 1, 2023
Demystifying the Singapore Goods and Services Tax (GST)
The Singapore Goods and Services Tax (GST) can be complex, especially with the upcoming increase from 8% to 9% in 2024. At Silicon Advisers, our team of tax experts can help you navigate the intricacies of GST.
In this article we will guide you through everything you need to know about GST, whether you are a business owner or simply curious about the Singapore tax system.
What is GST?
Think of GST as a small additional fee (currently 8%, increasing to 9% in 2024) added to the price of most goods and services you purchase in Singapore. This tax is collected by the Inland Revenue Authority of Singapore (IRAS) and helps fund government spending.
What's Exempt or Zero-Rated?
Not everything is subject to GST. Here are some common exemptions:
· Financial services (e.g., banking, insurance)
· Residential property sales and leases
· Investment precious metals (e.g., gold bars)
· Exports and international services (zero-rated, meaning GST is 0%).
Responsibilities of a GST-Registered Business
If your business turnover exceeds S$1 million over a calendar year, you are required to register for GST. This means you will need to:
· Charge and account for GST on most sales.
· File GST returns and pay tax due.
· Maintain proper business records for at least 5 years.
· Display prices with GST included.
· Issue tax invoices with your GST registration number.
· Notify IRAS of any changes to your business
Claiming Input Tax
As a GST-registered business, you can claim back the GST you paid on business-related purchases. However, there are specific conditions to meet for claiming this "input tax."
Considering GST Registration?
If you are unsure whether you need to register for GST, the IRAS website offers helpful resources and a registration tool. Keep in mind, there are also situations where you can apply for an exemption from GST registration.
Understanding GST is crucial for businesses operating in Singapore. By familiarizing yourself with the basics like registration requirements, claiming input tax, and current rates, you can ensure your business is compliant and avoid any unnecessary penalties.
To discuss how Silicon Advisers can help please reach out to @Melissa Yeo.
