The Singapore goods and services tax (GST) is the correspondent of the value added tax (VAT) in Europe. The Singapore goods and services tax applies to imported goods and to the supply of most goods and services within the city-state. The city-state provides exemptions from the goods and services tax when selling or leasing real estate property in Singapore and for financial services. Also, exported goods and other international services are applied a 0% GST rate. The Singapore goods and services tax was introduced in 1994 at a 3% tax rate which increased gradually to a 7% rate.
Just like the value added tax, the goods and services tax in Singapore applies to consumers, but must be collected and directed to the tax authorities by companies, which is in certain cases registering for GST may be compulsory and in certain cases may be voluntary. Singapore companies are required to register for the goods and services tax in two situations:
Voluntary registration for GST in Singapore may occur in the following situations:
For details about the advantages of voluntary GST registration you may contact our Singapore lawyers.
Singapore companies may apply for exemption from registration for the goods and services tax only they supply 0% rated goods and services, even when exceeding the 1 million SGD threshold. The IRAS (Inland Revenue Authority in Singapore) will allow the company to be exempt from paying the GST if over 90% of their total supplies have 0% GST rate on if their input tax surpasses the output tax.
Companies in Singapore may deregister from the goods and services tax if the business ceases or is sold. One can also deregister from paying the GST if the expected turnover does not exceed 1 million SGD.
If you require help with the GST registration procedures you can rely on our Singapore law firm.
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