All you need to know about Value Added Tax in Singapore

All You Need To Know About Value Added Tax (VAT) in Singapore

Posted on Posted in Taxation

Value Added Tax (VAT) Number comprises of 15 characters, where the first two letters represent the name of the state. For instance, the Singapore VAT Number is prefixed with ‘SG’. Some countries like Singapore refer to Value Added Tax (VAT) as “Goods and Service Tax (GST)”.

GST was introduced in Singapore in April 1994 and was levied at the rate of 3%. It rose to 4% in the year 2003 and then 5% in the succeeding years. The current rate of GST in Singapore is pegged at 7% with 0% rate for international services and exports of goods. Businesses in Singapore are required to register for GST with the administrator of the tax system, i.e. Inland Revenue Authority of Singapore (IRAS). GST is imposed on all the goods (including import of goods) and services provided in the state of Singapore.

It is somewhat an indirect payment of tax, as the tax is not directly levied on the service provider or distributor of the product, but rather is levied on the consumer. The GST charged to customers on supplies is known as Output Tax and the GST that is incurred on the purchase of goods for business is known as Input Tax. The output tax minus the input tax gives the Net Goods and Services Tax. However, it is important to note that the supplies of financial services, import and local supply of investment precious metals and sale of residential properties are exempt from this tax. The entities themselves are responsible for collecting the GST.

Registering for GST with the IRAS is mandatory if the annual turnover for the past 12 Months exceeds SGD 1 million. Companies can also choose to voluntarily register for GST even though their turnover is less than the prescribed limit. However, one needs to keep in mind that after applying for registration, it has to be complied for at least two years. Filing for GST Returns is required to be done on a quarterly basis but one can opt to do it on a monthly basis as well. Additionally, it is important that the payment of tax is made before the due date in order to avoid stiff penalties.

Due Date for filing of GST Returns in Singapore:

GST Accounting Period Due Date for Filing
January – March 30 April
April – June 31 July
July – September 31 October
October – December 31 January

If special accounting periods are followed, then the due date is one month from the last date of the special accounting period.

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