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The Goods and Services Tax in Singapore

The Goods and Services Tax in Singapore

Updated on Friday 18th September 2015

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The-Goods-and-Services-Tax-in-SingaporeWhat is the goods and services tax in Singapore?

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.

Are Singapore companies required to register for the goods and services tax?

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:

  • - if the company’s turnover in the last 12 months exceeded 1 million SGD,
  • - if the company expects an 1 million SGD turnover in the following 12 months.

Voluntary registration for GST in Singapore may occur in the following situations:

  • - if the company’s annual return does not exceed 1 million SGD,
  • - if the company only supplies products outside Singapore,
  • - if the company supplies financial services, also considered international services.

For details about the advantages of voluntary GST registration you may contact our Singapore lawyers.

Exemption from registration and deregistration from the GST in Singapore

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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