Understanding the tax landscape is crucial for successful businesses, especially concerning the Goods and Services Tax (GST) in Singapore. GST registered company in Singapore have a vital role in collecting and remitting this consumption tax. Exploring the responsibilities of GST registered businesses is essential for compliance, financial management, and overall business success. In this article, we will uncover the core responsibilities these businesses in the country must meet, offering insights valuable to both seasoned and new business owners about being a GST registered company in Singapore.
New GST InvoiceNow in Singapore
Singapore continues to advance its digitalization efforts with the introduction of the GST InvoiceNow, aimed at improving invoicing processes and GST compliance for businesses.
What is GST InvoiceNow?
It is essential for businesses that have registered for GST to pass on invoice data to IRAS via InvoiceNow-Ready Solutions. Starting from 1 April 2026, the second stage will apply to new voluntary registrants. This follows the first stage, which begins on 1 November 2025 for newly incorporated companies registering for GST voluntarily. To align with the new system, businesses applying for or already registered for GST are urged by IRAS to adopt and adapt accordingly.
Who must comply?
Businesses below the GST registration threshold are encouraged to adopt InvoiceNow voluntarily to enhance invoicing accuracy and operational efficiency. For GST-registered businesses, however, passing invoice data to IRS is a mandatory requirement.
Supporting GST compliance
By transmitting structured e-invoices in real time, businesses can reduce reporting errors and streamline their GST filing process. This supports IRAS’s broader objective of strengthening tax compliance while promoting faster invoice processing and payment cycles.
Preparing for the requirement
Businesses must be prepared as these changes are rolled out starting from 1 November 2025 for newly incorporated companies voluntarily registering and 1 April 2026 for new voluntary GST registrants, which includes registering on the InvoiceNow network and ensuring their invoicing systems comply with Peppol standards. The GST InvoiceNow marks a key step in modernizing Singapore’s business environment. Early adoption not only ensures compliance but also enhances efficiency and accuracy in invoicing and tax reporting.
Key points about Goods and Services Tax (GST)
Being a GST registered company in Singapore means that you are responsible for collecting GST from your customers on products and services provided. As of January 1, 2024, the current Goods and Services Tax (GST) rate in Singapore will rise from 8% to 9%. Consequently, transactions involving the goods and services from GST-registered companies in 2023 will incur GST at the rate of 8%, while transactions occurring on or after January 1, 2024, will be subject to a GST rate of 9%.
In the year 2023, for a GST-registered company, upon selling a product priced at S$1,000, you are required to issue a tax invoice. This invoice should incorporate an 8% GST amount, totaling S$80, thereby resulting in a total invoice amount of S$1,080.
GST returns and payments are typically due one month after the end of the accounting period covered by the return. The frequency of filing GST returns is contingent on company conditions, with a common practice of filing quarterly. Upon filing, the company is obligated to remit the total GST collected to the Inland Revenue Authority of Singapore (IRAS) while submitting the GST returns. This process is part of the essential duties of a GST-registered company in Singapore, ensuring compliance with tax regulations.
Is GST registration necessary for a business in Singapore?
Businesses registered for GST are the ones liable to charge GST. Mandatory registration is for businesses exceeding an annual taxable turnover of S$1 million. However, those with revenues below this threshold can also choose to voluntarily register.
GST registered company in Singapore: Voluntary vs. compulsory registration
When registration becomes mandatory
A company in Singapore must register for GST if its taxable turnover is more than S$1 million at the end of the calendar year or expected to be more than S$1 million in the next 12 months, as required under GST regulations. Businesses must monitor their turnover carefully, and once this threshold is crossed, registration with the Inland Revenue Authority of Singapore (IRAS) must be completed within 30 days. Failing to comply with this requirement can lead to penalties and backdated GST obligations.
The option for voluntary registration
While some businesses meet compulsory registration requirements, others may choose to register voluntarily. A GST registered company in Singapore can voluntarily apply even if its turnover is below the S$1 million threshold. Voluntary registration is often pursued to claim input tax on business expenses or to enhance the company’s professional image, particularly when dealing with GST-registered clients or suppliers. However, once voluntarily registered, the business must comply with all GST obligations for at least two years.
Understanding input and output tax for a GST registered company in Singapore
1. Understanding output tax
For every GST registered company in Singapore, output tax refers to the GST charged on taxable supplies on goods and services. This tax is collected from customers at the prevailing GST rate, which is currently nine percent. Businesses must accurately account for this tax when filing GST returns.
2. Claiming input tax
Input tax refers to the GST paid by businesses on the taxable purchases and expenses incurred for operational purposes. This may include GST on raw materials, services, utilities, or equipment. A GST registered company in Singapore is allowed to claim this input tax, provided proper supporting documents like tax invoices and receipts are maintained. The net GST payable to IRAS is the difference between the output tax collected and the input tax paid. A company may be eligible for a refund if its input tax exceeds its output tax.
Filing for GST in Singapore
Once you hold GST registration from IRAS, it becomes your responsibility to ensure accurate and timely filing of GST returns. Using the MyTax portal, all GST returns must be filed within a month following each GST reporting period. Even if your business had no GST transactions, a ‘NIL’ GST return is still required. For those voluntarily filing GST, GIRO payment plans are utilized for GST payments, deducted on the 15th day of the month after the payment due date. For instance, if GST returns are due by December 31, 2022, the payment should be made by February 15, 2023.
Responsibilities of a GST registered company in Singapore
1. Account and invoice for GST on standard-rated supplies
As a GST registered business in Singapore, it is crucial to apply for and account for Goods and Services Tax (GST) on standard-rated supplies. These supplies encompass goods and services transacted within Singapore and are currently taxed at 8%. Notably, specific changes have occurred in the GST landscape:
- As a GST registered business in Singapore, it is crucial to apply for and account for Goods and Services Tax (GST) on standard-rated supplies. These supplies encompass goods and services transacted within Singapore and are currently taxed at 8%. Notably, specific changes have occurred in the GST landscape:
- From January 1, 2020, business-to-business (B2B) supplies of imported services follow the reverse charge regime, while business-to-consumer (B2C) supplies of imported digital services fall under the overseas vendor registration regime.
- From January 1, 2023, GST will be expanded to encompass business-to-consumer (B2C) sales, including imported low-value goods, and imported non-digital services.
2. Filing for GST returns
Ensuring compliance with GST regulations necessitates filing precise GST returns and promptly settling the tax dues. Consider these essential factors:
- File your GST returns via mytax.iras.gov.sg within one month after each accounting period concludes, even if no transactions require reporting.
- Late or non-filing of GST returns can lead to penalties of up to S$5,000 and potential imprisonment for up to 6 months, as it is considered an offense.
- Pay the tax due within one month of each accounting period’s end. If using a GIRO plan for GST payment, deductions are made on the 15th day of the month following the payment due date.
- Late or non-payment of GST incurs penalties, including a 5% penalty on the outstanding tax amount by the due date and additional penalties for tax overdue beyond 60 days.
3. Maintaining business and accounting records
For businesses registered under GST, maintaining accurate business and accounting records is essential. It is mandatory to keep these records for at least five years, even if your business ceases operations or deregisters with GST. Not only does this practice ensure compliance, but it also facilitates efficient business management and informed decision-making.
4. Update pricing inclusive of GST
When advertising or displaying prices for goods and services, it is a legal requirement to include Goods and Services Tax (GST) in the prices. If both GST-inclusive and GST-exclusive prices are shown, the GST-inclusive price must be displayed as prominently as the GST-exclusive price. Failure to comply with these standards may lead to fines of up to S$5,000.
5. Generate invoices reflecting the GST registration number
You must issue tax invoices or customer accounting tax invoices for your standard-rated supplies. If the total amount payable, including GST, is below S$1,000, you can issue a simplified tax invoice. Include your GST registration number on all tax invoices, simplified tax invoices, and receipts.
6. Responsibilities for voluntary registrants
Obligations include using GIRO for payments and refunds, keeping registration for at least 2 years, complying with GST responsibilities, providing taxable supplies within 2 years (if not initially), and meeting any additional IRAS-imposed conditions. Special terms apply to overseas vendor-pay-only regime businesses.
7. Responsibilities for mandatory registrants
Compulsory GST registered businesses must adhere to IRAS-imposed conditions to protect revenue. If posing a revenue risk or engaging in missing trader fraud, the Comptroller can cancel GST registration.
Managing business changes as a GST-registered company in Singapore
In addition to the mentioned obligations, as a GST registered company, you are required to inform the Comptroller about business-related changes within 30 days. These changes encompass alterations in the GST mailing address, modifications in the business constitution or ownership, adjustments in partners or their details, and amendments in partnership agreements, even among existing partners.
Special schemes for a GST registered company in Singapore
1. Schemes to improve cash flow
To support businesses, Singapore offers several GST schemes that can benefit a GST registered company in Singapore. One such initiative is the Cash Accounting Scheme, which allows smaller businesses to account for GST based on payments received rather than when invoices are issued. By aligning tax payments more closely with actual cash flow, this scheme offers businesses improved financial flexibility and better timing for their obligations.
2. Support for import and export businesses
Companies involved in international trade may apply for the Major Exporter Scheme or the Zero-GST Warehouse Scheme. These allow GST on imports to be deferred or suspended, providing cash flow relief. Additionally, the reverse charge mechanism applies to imported services and digital services, where the responsibility to account for GST falls on the recipient rather than the overseas supplier. These schemes require approval from IRAS and can be valuable for companies looking to optimize tax efficiency.
Steps for deregistering your business from GST
Upon deregistering from GST, whether previously registered as compulsory or voluntary, specific procedures must be followed. Following cancellation, GST accountability persists for business assets held on the final registration day under the following conditions:
- GST has been claimed on these assets.
- The total market value of the assets exceeds S$10,000.
These assets may encompass inventories, fixed assets, non-residential properties, and goods imported under various GST schemes.
Consequences of delayed or unsubmitted GST filing
When a business misses the GST return deadline, IRAS may take these actions:
- Issue an estimated Notice of Assessment (NOA) with a 5% late payment penalty on the estimated tax.
- Impose a penalty for late submission.
- Summon the responsible individual (such as a sole proprietor or director) to court.
- Issue a warrant of arrest.
How We Can Help
Premia TNC offers comprehensive assistance for your company, ensuring vigilant monitoring of issues and regulatory changes. Our services include overseeing annual revenue close to S$1 million, managing GST registration or deregistration processes, preparing, and submitting GST reports, and reviewing and reconciling GST records for company management accounts. This support alleviates your burden, allowing you to focus on your core business operations.
FAQs – GST Registered Company in Singapore
1. Why voluntarily register for GST in Singapore?
Voluntary GST registration allows businesses to claim input tax credits, enhance credibility, and expand into international markets.
2. What is the mandatory turnover threshold for GST registration in Singapore?
Businesses exceeding or expecting to exceed S$1 million in annual taxable turnover must register for GST within 30 days to avoid penalties.
