GST or the goods and services tax is essentially Singapore’s version of the value-added tax, which is enforced in the majority of other nations. Since the Goods and Services Tax (GST), which is in place in the majority of other nations, differs from the Value-Added Tax (VAT), the operative word in that statement is near.
Since the GST has satisfied many citizens and company owners in the nation, the Singaporean government has lavished praise for it. In stark contrast to tax systems in other nations, Singapore company GST registration can be either optional or mandatory. Even if your company might not be subject to any tax laws in Singapore, it is still a good idea to register for GST.
Here are a few causes for this:
Strengthening brand name:
The competition in the Singaporean corporate world is fierce, with several companies vying for positions as market leaders. A business that has registered for GST gives off the impression of being established and puts you on par with other market titans in your sector.
When clients learn that your business is GST registered, they make optimistic estimates about its size and likely income. Many individuals will feel more confident as a result, and this will eventually result in sales and recommendations.
Enable customized business policies:
By registering your company for GST through the best corporate tax services Singapore, you add to a database of financial data. The government can effectively and precisely evaluate this data to forecast the anticipated rise in income tax collection. The government’s policies, which are probably to favor GST-registered enterprises, will be informed by this information.
Lower individual income tax rates are possible:
Due to its advantageous business and personal income tax system, Singapore is so alluring to the majority of individuals. The tax revenue growth report allows the government to monitor the amount of corporate income taxes received, allowing it to keep the personal income tax rates as low as feasible.
Encourages investment and savings:
Singapore only taxes citizens when they purchase goods and services for consumption. This results in reduced individual tax rates, and as if that weren’t good enough, money set away for investments and savings is exempt from taxes. People need to follow the GST filing Singapore on every transaction they make, therefore it is only reasonable to exclude their savings and investments from further taxes.
Business costs are lowered:
Due to its effectiveness, Singapore’s advantageous tax system has been hailed as one of the finest in the world. Foreign investors are not the only ones that profit from this tax system; the government also saves money on administrative and collection expenses.
By shifting tax charges to the ultimate customer, Singapore GST registration decreases the cost of conducting business. This implies that firms are exempt from paying any tax charges, which has a significant positive impact on their bottom line.
Getting registered voluntarily:
Even if you are not required to register for GST, you can still do so voluntarily.
Must meet one of the following requirements to be eligible for voluntary registration:
- Your company only produces out-of-scope goods; your company also manufactures taxable products
- Out-of-scope supply mostly pertains to sales of commodities that were in transit and items that were not brought into Singapore
- Your company performs foreign financial services that are exempt from suppliers
- Even if you were GST-registered, you would not be eligible for the full input tax credit if your company hires Foreign Service providers or buys low-priced commodities.
You may also apply for voluntary GST registration if you haven’t begun any of the aforementioned transactions but plan to do so in the future. You must demonstrate to the Comptroller that you are conducting business and have the intention to complete the aforementioned activities.
Shouldn’t register for GST registration if you don’t have definite intentions or plans to conduct any of the aforementioned transactions.
Requirements for voluntarily registering:
Before registering for GST, make sure you are eligible for voluntary GST registration (see the section above) and that you meet all the requirements listed below.
- Before completing the registration form, the firm director, single proprietor, partner, trustee, or person responsible for preparing GST returns must have completed and passed the “Overview of GST” e-Learning course. This is done to make sure that before you register for GST, you fully comprehend the duties and responsibilities of a GST-registered firm.
The online course is not necessary if:
- The company has submitted a registration application under the Overseas Vendor Registration Simplified Pay-only Registration Regime.
- The company director, sole proprietor, partner, or trustee of the business has experience managing other existing GST-registered businesses
- The person who prepares your GST returns is an ATA or ATP, or the business is preparing your GST returns
- Fill out a GIRO application to pay or get a GST refund.
- If the Comptroller requests it, provide the security deposit. Please visit our security deposit webpage for further details on the security deposit that may be necessary for your GST registration.
Following registration:
For at least two years, you must maintain your GST registration.
The following requirements must be met for your GST registration to remain active.
- Keep a GIRO account open for GST payments and refunds
- If you haven’t begun generating taxable supplies at the time you apply for GST registration, you must do so within two years
- Completely uphold your obligations as a GST-registered firm
- Any additional requirements that IRAS may impose at any time during your registration
The advantages and expenses of voluntary registration:
One advantage of registering for GST is that, if you meet the requirements for claiming input tax, you can claim the GST you paid on your purchases. The input tax related to the creation of exempt supplies, wholly non-business activities, and activities with non-business elements are not claimable, so if you are a partially exempt business or an organization with business and non-business activities, you will not be able to claim your input tax in its entirety.
A voluntary registration allows you to avoid continually monitoring your turnover while it is close to but below the S$1 million thresholds for compulsory registration.
You should think about the following things before registering for GST:
Obligations associated with GST registration:
Once registered, the government will use you as a GST collection agency. The implication is that you have obligations to fulfill. Following through on these obligations could raise your administrative expenses.
Your vendors’ profiles:
When your suppliers are GST-registered or when you import products and pay import GST to Singapore Customs. You may profit from GST registration. This is because, if you meet the requirements for claiming input tax, you will often be able to claim the GST paid.
However, if your suppliers are not GST-registered, they shouldn’t be charging GST, thus there won’t be any GST that can be claimed on your purchases.
Your clients’ demographics:
Once you have registered for GST, you must start charging and collecting GST from your clients.
If your clients are GST-registered, you could be able to raise your selling price to reflect the GST payable as they might be eligible to reclaim it.
However, since they won’t be able to recoup the GST you charge if they aren’t GST-registered, you could find it more challenging to raise your selling price to reflect the GST charged. As a result, you could need to absorb the GST.
