Do I Need to Register GST for my Company in Singapore?

Goods and Services Tax (GST) is a consumption tax levied on the supply of goods and services in Singapore. Businesses that meet certain criteria are required to register for GST and charge it on their taxable supplies. In this guide, we will provide a step-by-step overview of the GST registration process, its requirements, and key considerations for businesses.

1. Who Needs to Register for GST?

A company must register for GST under the following conditions:

Mandatory Registration:

• If your business has a taxable turnover exceeding S$1 million in the past 12 months (Retrospective Basis).
• If your business is expected to exceed S$1 million in taxable turnover in the next 12 months (Prospective Basis).

Voluntary Registration:

• Businesses that do not meet the mandatory registration criteria but wish to claim GST input tax credits can voluntarily register for GST.
• Businesses must comply with GST regulations for at least two years upon voluntary registration.

2. Benefits of Registering for GST

• Claiming Input Tax Credit: GST-registered businesses can claim back GST paid on purchases and expenses related to their business operations.
• Enhanced Credibility: Some businesses prefer dealing with GST-registered companies as it reflects financial stability.
• International Competitiveness: GST-registered businesses dealing with exports benefit from zero-rated supplies.

3. Step-by-Step Process for GST Registration

Step 1: Determine Your Eligibility

Check if your company falls under the mandatory or voluntary registration criteria.

Step 2: Prepare Required Documents

You will need the following documents for registration:

• ACRA Business Profile
• Financial statements or invoices proving taxable turnover
• Business activities and sales forecast (for prospective basis registration)

Step 3: Apply for GST Registration

•  Submit your application online through the MyTax Portal on the Inland Revenue Authority of Singapore (IRAS) website.
• Fill in the GST F1 form (for mandatory registration) or GST F2 form (for voluntary registration).
• Appoint a GST representative if needed.

Step 4: Complete e-Learning Course (For Voluntary Registration)

If registering voluntarily, at least one director or key personnel must complete an e-learning course on GST compliance, unless they have prior experience managing GST matters.

Step 5: Receive Notification from IRAS

•  IRAS will review your application and may request additional documents.
• If approved, you will receive a GST Registration Number and an official confirmation letter.

4. How to Compute Input and Output GST Tax (at 9%)

Output GST Calculation

• Output GST is the GST charged on your sales of goods and services.
• Formula: Selling Price × 9%
• Example: If you sell a product for S$1,000, the output GST is:
• S$1,000 × 9% = S$90
• Total amount charged to customer: S$1,090

Input GST Calculation

• Input GST is the GST paid on business purchases and expenses.
• Formula: Purchase Price × 9%
• Example: If you purchase raw materials for S$900, the input GST is:
• S$900 × 9% = S$81
• Total amount paid to supplier: S$981

Net GST Payable to IRAS

• Formula: Output GST – Input GST
• Example:
• Output GST: S$90
• Input GST: S$81
• Net GST Payable = S$90 – S$81 = S$9

5. Post-Registration Requirements

Once registered, you must:

• Charge 9% GST (or the prevailing rate) on taxable supplies.
• Issue tax invoices to customers with GST details.
• File GST returns (GST F5 form) quarterly to IRAS.
• Maintain proper records and accounts for at least 5 years.

6. Common Mistakes to Avoid

• Late Registration: Failure to register for GST on time may result in penalties and fines.
• Incorrect GST Filing: Ensure accurate reporting of output and input tax.
• Claiming Ineligible Input Tax: Some expenses are not eligible for GST claims (e.g., non-business-related expenses).

7. Common Situations for GST Registration

Certain business models and scenarios benefit significantly from GST registration. Here are some common situations:

• E-commerce and Online Businesses – Businesses selling goods or services online that exceed S$1 million in revenue must register for GST.
• Exporters and Zero-Rated Supplies – Companies that mainly deal with exports (which are zero-rated for GST) can claim input GST on local business expenses.
• Construction and Renovation Businesses – Firms incurring significant GST costs on materials and contractor services may benefit from GST registration to claim input tax.
• Service Providers with Business Clients – B2B service providers dealing with GST-registered companies can pass on GST costs without affecting competitiveness.

Voluntary GST Registration Scenarios:

• Businesses incurring substantial GST on purchases (e.g., investment holding companies purchasing commercial properties).
• Startups investing heavily in assets and infrastructure before generating revenue.
• Suppliers primarily dealing with GST-registered businesses, ensuring GST costs are recovered.

8. Deregistration of GST

Businesses may apply for GST deregistration if:

• They cease operations.
• Their taxable turnover falls below S$1 million.
• They no longer meet voluntary registration criteria.

Conclusion

Registering for GST is an essential step for businesses that meet the criteria in Singapore. Understanding the requirements, benefits, and compliance obligations will help businesses manage their tax responsibilities efficiently. If you need assistance with GST registration or have any questions regarding GST matters, do contact us for more assistance!

Frequently Asked Questions (FAQ)