Goods and services tax (GST)

  • What is GST?

Goods and services tax (GST) is a tax on domestic consumption.

The tax is paid when money is spent on goods or services, including imports. The tax is collected at each stage of the transaction process involving a good or service, with the end consumer bearing the tax.

A GST-registered trader must charge GST on taxable supplies of goods and services made to its customers. The tax charged is known as the output tax.

Input tax, on the other hand is the GST that the trader has paid on purchases of goods and services for the purpose of his business.

The input tax is deductible from output tax to arrive at the GST payable by the trader, or amount to be refunded to him.

  • What is GST levied on?

GST is levied on goods and services supplied in Singapore by any taxable person in the course or furtherance of a business and goods imported into Singapore by any person.

A taxable supply is one that is standard-rated or zero-rated. Only a standard-rated supply is liable to GST.

  • What is the rate of GST in Singapore?

The current rate is 7% on standard-rated supplies.

  • Who should register as a GST trader?

A taxpayer who makes taxable supplies is required to register with the Comptroller of GST if at the end of any quarter, the total value of all its taxable supplies in Singapore for that quarter and the three quarters immediately preceding that quarter exceeds S$1 million (unless the taxpayer is certain the total value of its taxable supplies in the next 12 months will not exceed S$1 million), or if it is reasonable to believe that the total value of its taxable supplies will exceed S$1 million in the next 12 months.  Businesses with annual turnover of taxable supplies of less than S$1 million may request registration on a voluntary basis.

Where a taxpayer becomes liable to register for GST, the taxpayer is required to apply for GST registration within 30 days of the date that its registration liability arises.

Failure to register for GST may face a fine no greater than S$10,000 as well as a penalty equal to 10% of the tax due for each year from the date on which the person was required to apply for registration. In the case of a continuing offence, the person faces a further fine of S$50 for each day during which the offence continues after conviction.

  •  When is the due date for filing my GST returns and making GST payments?

The due date for filing GST returns and making GST payments is one month after the end of the accounting period covered in the GST return. From 1 January 2007, a GST trader must file electronic GST returns and make GST payments on a quarterly basis tied to the trader’s financial year.

A GST trader is required to file a ‘nil’ GST return even if there is no business activity during the accounting period.

The Comptroller of GST will not grant any extension of time for the filing of GST returns, other than to newly registered businesses and for circumstances that fall within the list of acceptable reasons, such as fire disaster, breakdown of computer system, purchase of new accounting software and/or IT system, and key accounting personnel on medical or hospitalisation leave exceeding one week.

If a GST trader is on GIRO plan for GST payments, deductions will be made on the 15th day of the month after the payment due date.

  • What happens if I am late in filing a GST return and/or making payment?

A penalty of S$200 will be imposed for every completed month that a GST return remains outstanding. The maximum penalty for each GST return is S$10,000.

A 5% penalty for late payment will be imposed on an estimated tax (demand note) if no GST return has been submitted. If a GST return was submitted but payment was not made, the 5% penalty will be imposed on the tax declared in the GST return.

If the payment remains unpaid 60 days after the 5% penalty for late payment is imposed, an additional 2% penalty may be imposed for every complete month that the tax remains outstanding. However, the total additional penalty shall not exceed 50% of the tax outstanding.