GST in Singapore: The complete guide

Guide on GST in Singapore

Step 1: Check if you need to register for GST

• If your business has a taxable turnover exceeding S$1 million, you need to register for GST.
• If your business has a taxable turnover below S$1 million, you may choose to register voluntarily.

Step 2: Obtain your GST registration number

• Once you’ve registered for GST, you’ll receive a GST registration number from the Inland Revenue Authority of Singapore (IRAS). You’ll need this number to file your GST returns.

Step 3: Collect your GST records

• You’ll need to collect all your GST records for the period you’re filing, such as invoices, receipts, credit notes, debit notes, and import and export documents.

Step 4: Calculate your GST liability

• Use the information from your GST records to calculate the amount of GST you need to pay or the refund you’re entitled to.

Step 5: Log in to myTax Portal

• Log in to myTax Portal using your SingPass or IRAS PIN.

Step 6: File your GST return

• Click on the “File GST Return” button and fill in the required information, such as your GST registration number, taxable period, and GST liability.

Step 7: Pay your GST

• If you have a GST liability, you’ll need to pay it electronically through the myTax Portal using your bank account or credit card.

Step 8: Submit your GST return

• Once you’ve completed your GST return and payment, submit it through the myTax Portal.

Step 9: Keep your records

• Keep a copy of your GST return and payment confirmation for your records.

That’s it! Just remember to file your GST returns on time to avoid penalties. The due date for GST returns is one month after the end of the accounting period.

How to calculate GST and prepare the GST returns. please provide detailed steps like you would teach someone who has never done it before

Sure, here’s a step-by-step guide on how to calculate GST and prepare your GST returns:

Step 1: Understand the GST system in Singapore

• In Singapore, the GST rate is currently 7%.
• GST is a tax on the value added at each stage of production or distribution, so it is usually passed on to the end consumer.

Step 2: Determine your taxable sales and purchases

• To calculate your GST liability, you need to determine your taxable sales and purchases for the accounting period.
• Taxable sales include all goods and services sold in Singapore that are not GST-exempt or zero-rated.
• Taxable purchases include all goods and services purchased in Singapore that are subject to GST.

Step 3: Calculate your output tax

• Output tax is the GST you charge on your taxable sales.
• To calculate your output tax, multiply your taxable sales by the GST rate (7%).
• For example, if your taxable sales for the accounting period were S$100,000, your output tax would be S$7,000 (S$100,000 x 7%).

Step 4: Calculate your input tax

• Input tax is the GST you paid on your taxable purchases.
• To calculate your input tax, add up all the GST you paid on your taxable purchases for the accounting period.
• For example, if your taxable purchases for the accounting period were S$50,000, and you paid GST of S$3,500 (S$50,000 x 7%), your input tax would be S$3,500.

Step 5: Determine your net GST payable or refundable

• If your output tax is greater than your input tax, you have a net GST payable.
• If your input tax is greater than your output tax, you have a net GST refundable.
• To determine your net GST payable or refundable, subtract your input tax from your output tax.
• For example, if your output tax was S$7,000 and your input tax was S$3,500, your net GST payable would be S$3,500 (S$7,000 – S$3,500).

Step 6: Prepare your GST returns

• You can prepare your GST returns using the IRAS’ online portal, known as myTax Portal.
• Log in to the portal using your SingPass or IRAS PIN, and select “File GST Return”.
• Enter your output tax, input tax, and any adjustments required.
• Review your GST returns carefully before submitting them.

Step 7: Pay your net GST payable

• If you have a net GST payable, you need to pay it by the due date.
• You can pay your net GST payable through myTax Portal using your bank account or credit card.
• If you have a net GST refundable, IRAS will refund the amount to your registered bank account.

That’s it! Just remember to keep accurate records of your taxable sales and purchases, as well as your GST returns, for at least five years.

How do I determine my taxable sales and purchases

Sure, here’s a more detailed guide on how to determine your taxable sales and purchases for GST purposes:

Taxable Sales:

1. Determine the total value of your sales during the accounting period.
2. Identify the sales that are exempt from GST or zero-rated, as they are not subject to GST.
3. Subtract the exempt and zero-rated sales from the total sales to arrive at your taxable sales.
4. For example, if your total sales for the accounting period were S$120,000, and your exempt and zero-rated sales were S$20,000, your taxable sales would be S$100,000.

Total Sales = S$120,000 Exempt and Zero-rated Sales = S$20,000 Taxable Sales = S$100,000

Taxable Purchases:

1. Determine the total value of your purchases during the accounting period.
2. Identify the purchases that are exempt from GST or zero-rated, as they are not subject to GST.
3. Subtract the exempt and zero-rated purchases from the total purchases to arrive at your taxable purchases.
4. For example, if your total purchases for the accounting period were S$80,000, and your exempt and zero-rated purchases were S$10,000, your taxable purchases would be S$70,000.

Total Purchases = S$80,000 Exempt and Zero-rated Purchases = S$10,000 Taxable Purchases = S$70,000

GST-Registered Business: If you are a GST-registered business, you need to account for the GST charged on your sales and the GST paid on your purchases. You can claim the GST paid on your purchases as input tax, which can be deducted from the GST charged on your sales to determine your net GST payable or refundable.

Example: ABC Pte Ltd is a GST-registered company that sells IT equipment. In February 2023, ABC Pte Ltd had the following sales and purchases:

Sales

• Desktop computers: S$50,000 (GST-inclusive)
• Laptops: S$30,000 (GST-inclusive)
• Software: S$10,000 (GST-inclusive) Total Sales = S$90,000

Purchases

• Desktop computers: S$20,000 (GST-inclusive)
• Laptops: S$10,000 (GST-inclusive)
• Software: S$5,000 (GST-inclusive) Total Purchases = S$35,000

To determine the taxable sales and purchases, we need to subtract the GST component from the sales and purchases:

Taxable Sales

• Desktop computers: S$46,728 [(S$50,000 / 1.07) x 0.07]
• Laptops: S$28,037 [(S$30,000 / 1.07) x 0.07]
• Software: S$9,346 [(S$10,000 / 1.07) x 0.07] Total Taxable Sales = S$84,111

Taxable Purchases

• Desktop computers: S$18,692 [(S$20,000 / 1.07) x 0.07]
• Laptops: S$9,346 [(S$10,000 / 1.07) x 0.07]
• Software: S$4,673 [(S$5,000 / 1.07) x 0.07] Total Taxable Purchases = S$32,711

Based on the above figures, ABC Pte Ltd’s output tax (GST charged on sales) is S$5,889 (S$84,111 x 0.07), and its input tax (GST paid on purchases) is S$2,290 (S$32,711 x 0.07). To determine the net GST payable or refundable, we need to deduct the input tax from the output tax:

Net GST Payable or Refundable Output Tax (GST charged on sales) = S$5,889 Input Tax (GST paid on purchases) = S$2,290 Net GST Payable or Refundable = S$3,599

In this example, ABC Pte Ltd would need to pay S$3,599 in GST to the Inland Revenue Authority of Singapore (IRAS) as its net GST payable.

It’s important to note that this is just a simplified example, and GST calculations can become more complex for businesses with multiple sales and purchases. Additionally, there are specific rules and regulations surrounding GST filings in Singapore, so it’s important to familiarize yourself with these requirements before filing.

Thanks this is very helpful. Can you please explain more about taxable sales and purchases vs zero rated or exempt sales and provide examples of each and the criteria to determine the right classification or treatment. please provide as many examples as possible to completely cover the topic

Sure, let me provide you with more information about taxable, zero-rated, and exempt supplies in Singapore, along with examples and criteria for each:

1. Taxable Supplies: Taxable supplies are goods and services that are subject to GST at the prevailing rate of 7% in Singapore. Businesses that make taxable supplies are required to charge GST to their customers, and must also account for and pay GST to the IRAS on these supplies.

Examples of taxable supplies include:

• Sales of furniture and fixtures
• Provision of IT services
• Sale of food and drinks in a restaurant or café
• Provision of accounting services

Criteria for determining taxable supplies:

• The supply is not specifically listed as exempt or zero-rated in the GST Act or GST Regulations
• The supply is made in Singapore
• The supplier is GST-registered, or required to be registered

2. Zero-rated Supplies: Zero-rated supplies are goods and services that are taxable, but the GST rate is 0%. This means that businesses that make zero-rated supplies do not charge GST to their customers, but are still entitled to claim input tax incurred on their purchases.

Examples of zero-rated supplies include:

• Export of goods or services from Singapore
• International services (e.g. consulting services provided to a client outside Singapore)
• Supply of investment precious metals

Criteria for determining zero-rated supplies:

• The supply falls within the categories of supplies listed in the GST Act or GST Regulations as zero-rated
• The supply is made in Singapore
• The supplier is GST-registered, or required to be registered

3. Exempt Supplies: Exempt supplies are goods and services that are not subject to GST, and businesses that make exempt supplies are not required to charge GST to their customers. However, businesses that make exempt supplies are not entitled to claim input tax incurred on their purchases.

Examples of exempt supplies include:

• Provision of financial services (e.g. lending money or issuing insurance policies)
• Sale or lease of residential properties
• Education services (e.g. tuition and courses leading to a recognized qualification)

Criteria for determining exempt supplies:

• The supply falls within the categories of supplies listed in the GST Act or GST Regulations as exempt
• The supply is made in Singapore
• The supplier is GST-registered, or required to be registered

It’s important to correctly classify your supplies as taxable, zero-rated, or exempt, as this will impact your GST liability and entitlement to claim input tax. If you’re unsure about the classification of your supplies, you should seek professional advice or contact the IRAS for guidance.

Thanks what about for exempt and zero rated purchases? please provide a similar explanation

Sure, here’s an explanation of exempt and zero-rated purchases, along with examples and criteria for each:

1. Exempt Purchases: Exempt purchases are purchases made by a GST-registered business that are not subject to GST, and the business is not entitled to claim input tax incurred on these purchases.

Examples of exempt purchases include:

• Purchase of goods or services that are exempt supplies (e.g. financial services)
• Purchase of residential properties

Criteria for determining exempt purchases:

• The purchase falls within the categories of purchases listed in the GST Act or GST Regulations as exempt
• The purchase is made in Singapore
• The purchaser is GST-registered, or required to be registered

2. Zero-rated Purchases: Zero-rated purchases are purchases made by a GST-registered business that are taxable, but the GST rate is 0%. This means that the business is entitled to claim input tax incurred on these purchases, but no GST is charged by the supplier.

Examples of zero-rated purchases include:

• Import of goods into Singapore
• Purchase of goods or services that are zero-rated supplies (e.g. international services)

Criteria for determining zero-rated purchases:

• The purchase falls within the categories of purchases listed in the GST Act or GST Regulations as zero-rated
• The purchase is made in Singapore
• The purchaser is GST-registered, or required to be registered

It’s important to correctly classify your purchases as exempt or zero-rated, as this will impact your entitlement to claim input tax. If you’re unsure about the classification of your purchases, you should seek professional advice or contact the IRAS for guidance.