Eligibility for GST Registration in Singapore
Certain persons in Singapore are required to register to become taxable persons, or GST-registered persons. Registration for GST is mandatory for those with over S$1 million in taxable turnover at the end of the calendar quarter prior to January 1, 2019 and the past three quarters, as well as those with over S$1 million in taxable turnover at the end of any calendar year on or after January 1, 2019.
Persons who are not required to register for GST include those whose taxable turnover mostly or completely comes from zero-rated supply and may thus apply for exemption from registration.
Persons who are liable for GST registration under the retrospective view but not the prospective view also do not have to register if they meet the following conditions:
Taxable turnover for the next 12 months is not expected to exceed S$1 million,
Taxable turnover is projected to decline due to specific circumstances, and
The person has supporting documentation to back up the projection. However, this person must also monitor taxable turnover at the end of the next calendar year. On the other hand, those who are not liable for GST registration may nevertheless opt to do so.
Before registration, the following factors must be taken into consideration:
The responsibilities of a GST-registered business,
Type of sales to be made, and
Pricing decisions to be made after GST registration.
The GST registration process includes four steps (or five if it is voluntary registration).
Determine the type of GST registration
If is voluntary registration, the next step is to complete two e-learning courses titled “Registering for GST” and “Overview of GST”, then pass a quiz
Applicant must submit an application for GST registration online via myTax Portal
IRAS will take around 10 working days to process each application and may request for additional information and supporting documents
Once approved, the applicant will receive the letter of notification for GST registration outlining the GST registration number and effective date of the registration
Those who must register for GST are required to do so within 30 days of the date they became liable to register. Persons who are liable to register for GST under the retrospective view must be registered following the third month of the calendar year, while those liable to register for GST under the prospective view must be registered on the 31st day from the date of forecast.
Anyone who registers late will be punished with the following:
Their date of registration will be backdated to the date that they were liable to be registered they will have to account for and pay GST on their past sales starting from the effective date of registration even if they did not collect any GST from their customers, and they
May be fined up to S$10,000 and a penalty equal to 10% of the GST due.
However, the IRAS is willing to make exceptions to the above in certain situations. Applicants who voluntarily disclose that their registration is late will generally have their late notification fine and penalties waived. The IRAS also allows those who are unable to pay the GST due on the backdated period to do so in instalments.
Sometimes, GST de-registration may be necessary. This usually occurs when a GST-registered person ceases to make taxable supplies. This person is then required to notify the Comptroller in writing within 30 days from the date of cessation. The Comptroller will then terminate the person’s registration if it is determined that the GST-registered person is no longer liable to be registered.
However, if the Comptroller is not satisfied that the person no longer makes taxable supplies or thinks it is necessary to protect revenue, the Comptroller may refuse to cancel a voluntary registration.
Claiming & Charging of Singapore GST
When a consumer purchases anything from GST-registered suppliers or imports goods into Singapore, the consumer may incur input tax. The consumer may claim input tax incurred if all the conditions for making such a claim have been satisfied. However, the consumer is required to make the claim during the accounting period that matches the date shown in the tax invoice or accounting permit.
There are seven conditions to be fulfilled in order for the consumer to claim input tax, as follows:
The consumer is GST-registered;
The goods or services must have been supplied to the consumer or the goods must have been imported by the consumer;
The goods and services are used or will be used for the consumer’s business purposes;
Local purchases must be supported by valid tax invoices addressed to the consumer or simplified tax invoices at the time of claiming the input tax;
Imports must be accompanied by import permits proving the consumer to be the importer of the goods;
• The input tax is directly attributable to standard-rated or zero-rated supplies, or out-of-scope supplies which would either be standard-rated or zero-rated if made in Singapore; and
The input tax claims are not prohibited under Regulations 26 and 27 of the GST (General) Regulations.
Either a valid tax invoice (for purchases of less than S$1,000) or a simplified tax invoice (for purchases of more than S$1,000) containing all required details is necessary for one to claim input tax on any purchases or expenses. If the tax invoice submitted to the IRAS is found to be invalid, the tax claims will be disallowed, and penalties may be imposed.
There are two common examples of factors that invalidate a tax invoice. One example occurs when the invoice has missing details.
There are four ways this could be the case:
If the supplier’s name, address, and GST registration number are not shown;
If the purchase is worth more than S$1,000 and any of the words “tax invoice”, the customer’s name, or the GST amount are not shown;
If the purchase is worth less than S$1,000 and either the GST amount or a statement similar to “price payable includes GST” is not shown;
Or if the purchase was made in foreign currency and the equivalent amount in Singapore dollars is not shown.
Another example of an invalid tax invoice occurs when the supplier is not GST-registered. This is evidenced when the supplier does not have a GST registration number or has an expired or invalid GST number.
Paul Hype Page & Co is able to assist you with your tax invoices, as well as any other tax-related issues you may have. We will ensure that you and your business comply with existing tax regulations while also helping you receive the most benefits possible.
Tourists may also claim a refund of GST paid on purchases made in Singapore if certain criteria are fulfilled. To qualify as a tourist, a person must not be:
A Singapore citizen or permanent resident;
Have spent 365 days or less in Singapore over the two-year period before the date of purchase;
Have not been employed in Singapore over the six-month period before the date of purchase; must not be a member of the crew of the aircraft on which the person is departing Singapore; must be at least 16 years old at the time of purchase;
And if the person is a student pass holder, must have purchased the goods within the four-month period before the expiry of the student pass.
If the person qualifies as a tourist, the following criteria must be fulfilled to receive the tourist refund:
the goods must be purchased and an electronic Tourist Refund Scheme (eTRS) ticket is received from the retailer;
at least S$100 including GST must be spent;
the GST refund must be applied for by using the Token or eTRS Tickets at an eTRS self-help kiosk;
the tourist must depart with the goods within two months from the date of purchase;
the tourist must depart with the goods within 12 hours after obtaining approval of the GST refund;
and the tourist must claim the refund from the approved central refund counter operator within two months from the date of approval of the application.
If the tourist holds a student pass, the tourist must also have purchased the goods within the four-month period before the expiry of the student pass and intend to depart with the goods and remain outside Singapore for a minimum period of 12 months.
Only GST-registered businesses are allowed to charge and claim GST from their effective date of GST registration. Businesses that are not GST-registered are prohibited from charging GST. If a business has wrongfully charged or collected GST from its customers, it must remit the GST collected to the IRAS. Similarly, only GST-registered businesses may claim GST.
However, non-GST registered businesses in specific industries have been granted concessions, subject to conditions, to claim any GST incurred. Qualifying funds that are managed by a prescribed fund manager in Singapore are allowed to claim any GST incurred on prescribed expenses at an annual fixed recovery rate via remission. Real Estate Investment Trusts (S-REITs) and qualifying Registered Business Trusts (S-RBTs) are allowed to claim GST on any expenses they incur for their business and Special Purpose Vehicles (SPVs).
Assessment and Refunding of GST in Singapore
The Comptroller is entitled to assess GST due if a taxable person has not furnished a GST return or keep the necessary documents for verification of returns. The Comptroller may also assess GST in situations where GST returns appear to either be incorrect or incomplete, or where a certain amount of GST has been refunded or repaid to a taxable person when it should not have been.
When a person furnishes a GST return, the person is required to pay the Comptroller the GST due for the accounting period to which the return relates. According to the GST Regulations, this payment must be made on or before the last day on which the person is required to forward the GST return to the Comptroller. Should the input tax exceed the output tax, the Comptroller must refund the difference to the taxable person.
GST truly permeates every aspect of daily life in Singapore. Although GST may seem simple on the surface, it is full of details and complexities that help it work the way it does. By adhering to GST laws, businesses and consumers play their part in helping Singapore’s GST system run smoothly, and thus provide a boost to Singapore’s economy.