Goods and Services Tax or GST is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. In other countries, GST is known as the Value-Added Tax or VAT.
GST exemptions apply to the provision of most financial services, the sale and lease of residential properties, and the importation and local supply of investment precious metals. Goods that are exported and international services are zero-rated.
Businesses Registered for GST
If your annual taxable supplies exceed $1million, it is compulsory for you to register for GST. Otherwise, you may choose to register for GST voluntarily after careful consideration.
Taxable and Non-Taxable Goods and Services
The table below lists the categories and types of taxable and non-taxable supplies.
|| Taxable Supplies
||Standard-Rated Supplies(GST is charged at 7%)
||Zero-Rated Supplies(GST is charged at 0%)
||Exempt Supplies(GST is not applicable)
||Out-of-Scope Supplies(GST is not applicable)
||Most local sales fall under this category.E.g. sale of TV set in a Singapore retail shop
||Export of goodsE.g. sale of laptop to overseas customer where the laptop is shipped to an overseas address
||Sale and rental of unfurnished residential propertyImportation and local supply of investment precious metals
||Sale where goods are delivered from overseas to another place overseasPrivate transactions
See Out-of-scope suppliesfor more information.
||Most local provision of services fall under this category.E.g. provision of spa services to a customer in Singapore
||Services that are classified as international servicesE.g. air ticket from Singapore to Thailand (international transportation service)
||Financial servicesE.g. issue of a debt security
Charging and Collecting GST
Once you have registered for GST, you must charge GST on your supplies at the prevailing rate. This GST that is charged and collected is known as output tax. Output tax must be paid to IRAS.
The GST that you incur on business purchases and expenses (including import of goods) is known as input tax. If your business satisfies the conditions for claiming input tax, you can claim the input tax on your business purchases and expenses.
This input tax credit mechanism ensures that only the value added is taxed at each stage of a supply chain.
Paying Output Tax and Claiming Input Tax Credits
As a GST-registered business:
- You must submit your GST return to IRAS one month after the end of each prescribed accounting period. This is usually done on a quarterly basis.
- You should report both your output tax and input tax in your GST return.
- The difference between output tax and input tax is the net GST payable to IRAS or refunded by IRAS.