Worldwide VAT, GST and Sales Tax Guide
However, if any material change occurs with respect to the nature of supplies or the proportion of zero-rated supplies, the taxable person is required to notify the Comptroller within 30 days after the date of the change or, if no particular date is identifiable as the date of the change, within 30 days after the end of the quarter in which the change occurred.
Voluntary registration and small businesses. If the value of taxable supplies made by a business is below the registration limit, the business may register for GST voluntarily. Approval is subject to the Comptroller’s discretion. A business that registers for GST voluntarily must remain registered for at least two years, unless otherwise allowed by the Comptroller.
Under GST law, “taxable supply” is defined as a supply of goods or services made in Singapore other than an exempt supply. Based on this definition, businesses that make wholly exempt supplies would not be eligible for GST registration. However, the GST Act allows a person that is not liable to be registered to apply for voluntary registration if it makes exempt supplies of financial services (as specified in Part 1 of the Fourth Schedule to the GST Act) and the services would have qualified as international services if they were made by a taxable person.
In addition, a person who is not liable for GST registration may also apply for voluntary registration if the person makes or intends to make the following supplies:
• Supplies outside Singapore that would be taxable supplies if made in Singapore
• Supplies that are disregarded for GST purposes under the warehousing regime or Approved Contract Manufacturer and Trader Scheme and that would otherwise be taxable supplies.
However, a person in the above scenarios must have a business establishment in Singapore or have its usual place of residence in Singapore.
Group registration. Businesses that are under “common control” may apply to register as a GST group. Each member must be individually registered for GST. After group members are registered as a GST group, they are treated as a single taxable person and submit a single GST return. Supplies made between members within the same GST group are disregarded for GST purposes. All members of a GST group in Singapore are jointly and severally liable for all GST debts and penalties.
A person who is not resident in Singapore or does not have an established place of business in Singapore may be part of the GST group if certain criteria are satisfied. If the GST group includes a person not resident in Singapore or not having an established place of business in Singapore, the representative member must satisfy additional criteria.
There is no minimum time period required for the duration of a GST group.
Divisional registration. If a taxable person carries on more than one business or operates several divisions, the person may apply to the Comptroller to register any of the businesses or divisions separately. Divisional registrations ease the GST administration for such businesses. On approval, each division is given a separate GST registration number and submits its own GST return. Supplies made between divisions within the divisional registration are disregarded for GST purposes.
Fixed establishment. In Singapore there is no legal definition of a fixed establishment for GST purposes. However, while the GST Act does not define the term fixed establishment, the IRAS has clarified in its guidelines that a fixed establishment is an establishment, other than a business establishment, that has both human and technical resources necessary to provide or receive services on a permanent basis. This means the human and technical resources are available in Singapore for an aggregate of more than 183 days in any 12-month period (“period threshold”) or are present in Singapore on a recurring basis.
Human resources refer to the presence of staff to provide or receive the services and this refer to the employees of the company (i.e., it does not include employees of a third party such as the
Businesses must apply for GST registration online via myTax Portal by the relevant personnel who have been authorized to use the IRAS website’s e-services.
Deregistration. A business that ceases operations must cancel its GST registration. The business must notify the GST authorities within 30 days after ceasing to make taxable supplies.
A GST-registered person whose value of taxable supplies is not expected to exceed SGD1 million in the next 12 months may request deregistration from GST.
Changes to GST registration details. Change in business name or registered office address – the change is to be filed with the Accounting and Corporate Regulatory Authority (ACRA) online. IRAS will update its records based on the information filed with ACRA. Separate notification to IRAS is not required.
Change in mailing address – a business may have separately requested GST-related correspondences (including any refund checks) to be sent to another address (i.e., GST mailing address). Updates can be made to the mailing address by logging into myTax Portal and accessing “Update GST Contact Details.” Updates should be made in a timely manner to ensure that the business continues to receive the correspondences in a timely manner.
Change in GST return filing frequency or cycle of accounting periods – a business can write in to request a change in filing frequency (e.g., change to monthly GST accounting period) or apply for special accounting periods for its GST returns via myTax Mail (log into myTax Portal). All requests will be subject to IRAS’s approval. In applying for special accounting periods for its GST returns, a business is required to inform the IRAS at least 30 days before the start of the first accounting period. Otherwise, the business will be placed on the standard GST accounting periods by default.
Change in financial year end – the change is to be updated online (www.bizfile.gov.sg) for local companies and branches of foreign companies registered with Accounting and Corporate Regulatory Authority (ACRA). IRAS will update its records based on information filed with ACRA. Separate notification to IRAS is not required. For all other entities, the business is required to inform IRAS via myTax Mail (log into myTax Portal).
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of GST, including the zero-rate.
The GST rates are:
• Standard rate: 9%
• Zero-rate: 0%
The standard rate of GST applies to all supplies of goods or services unless a specific measure provides for a reduced rate, the zero-rate or an exemption.
The Singapore government increased the standard rate of GST from 8% to 9% from 1 January 2024.
Examples of goods and services taxed at 0%
• Exports of goods and international services
The term “exempt” refers to supplies of goods and services that are not liable to GST and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Sale or lease of residential property
• Certain financial transactions
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for business purposes (for example, goods acquired for private use by a taxable person and fringe benefits provided that these are not for the purpose of business). In addition, input tax may not be recovered for some items of business expenditure. The following lists provide some examples of items of expenditure for which input tax is not deductible and examples of items for which input tax is deductible if the expenditure is related to a taxable business use.
Examples of items for which input tax is nondeductible
• Purchases used for nonbusiness purposes
• Purchase, lease, hire, maintenance and running costs of private motor cars
• Medical and insurance expenses for employees
• Recreational club subscriptions
Examples of items for which input tax is deductible (if related to a taxable business use)
• Advertising
• Purchase of inventory
• Purchase, lease, hire and maintenance of trucks and vans
• Business entertainment
• Attendance at conferences
Partial exemption. Input tax directly related to making exempt supplies is generally not recoverable. If a taxable person makes both exempt and taxable supplies, the person may not recover input tax in full. This situation is referred to as “partial exemption.” Zero-rated supplies are treated as taxable supplies for these purposes.
Unless otherwise approved by the Comptroller, partial exemption recovery is calculated in the following two stages:
• The first stage identifies the input tax that may be directly attributable to taxable and to exempt supplies. Input tax directly attributable to taxable supplies is deductible (unless specifically not deductible under the GST Act), while input tax related to making exempt supplies is generally not deductible (subject to exceptions).
• The second stage identifies the amount of the remaining input tax (for example, input tax on general business overhead) that may be allocated to taxable supplies and recovered. The calculation may be performed using the ratio of the value of taxable supplies over the value of total supplies (that is, taxable and exempt supplies), or it may be based on a special calculation agreed with the Comptroller.
Notwithstanding the above provisions, if the value of a taxable person’s exempt supplies for an accounting period does not exceed both the average of SGD40,000 per month and does not exceed 5% of the total value of taxable and exempt supplies made in that accounting period, the input tax relating to the exempt supplies is treated as entirely attributable to taxable supplies. The GST Act provides relief for certain businesses to be treated as fully taxable if they make only certain types of exempt supplies.
Approval from the tax authorities is not required to use the partial exemption standard method in Singapore. Special methods are allowed in Singapore, but approval for them is required (see above).
Capital goods. Capital goods in Singapore are defined as items of capital expenditure that are used in a business over several years. There are no special input tax recovery rules for capital goods. The normal input tax rules for GST apply (as outlined above).
Refunds. If the amount of input tax recoverable in a GST period exceeds the output tax in the same period, the excess is refundable. Refunds are generally made within three months from the date on which the GST authorities receives the GST return. If a taxable person submits monthly
sends a copy to the supplier. The customer can adopt self-billing if it satisfies all the conditions as follows:
• It is more convenient for the customer to self-bill because the customer will determine and verify the final value of the goods and services purchased from the suppliers; or self-billing facilitates the customer’s internal controls and accounting system given that the supplier will be working with uniform purchase documentation.
• There is a written agreement with each supplier that the supplier will not issue tax invoices and/ or customer accounting tax invoices for goods and services purchased by the customer.
• Instead, the supplier will authorize the customer to issue the tax invoices and/or customer accounting tax invoices on its behalf.
• Each supplier agrees in writing that he will notify the customer immediately if the supplier’s GST registration is canceled or issued with a new GST registration number.
• The customer will provide the suppliers with the tax invoices and/or customer accounting tax invoices issued under self-billing and the customer will retain copies of them. The customer will keep the tax invoices/customer accounting tax invoices issued under self-billing for a period of not less than five years.
• The customer must keep and maintain an up-to-date list showing the names, addresses and registration numbers of all the suppliers covered by the self-billing arrangement.
• Each tax invoice or customer accounting tax invoice issued under self-billing must contain all the details required on a normal tax invoice and customer accounting tax invoice respectively as well as the following details:
– “Buyer created tax invoice – Approved by the Comptroller of GST” in place of the words of “Tax invoice”
– The statement “The tax shown is your output tax due to the Comptroller of GST”
Proof of exports. Exports of goods are zero-rated for GST purposes if they are supported by evidence confirming the departure of the goods from Singapore within 60 days from the time of supply (subject to exceptions). The evidence required includes the following documents:
• Export permit
• Bill of lading or airway bill
• Original invoice
Export documents prescribed by the Comptroller for supporting the zero-rating GST treatment vary according to the export scenario.
Foreign currency invoices. If a tax invoice is issued in a foreign currency, the total amount payable before GST, the GST chargeable and the total amount payable including GST must be converted to the domestic currency, which is the Singapore dollar (SGD). The foreign currency must be converted to the SGD equivalent based on the selling rate of exchange prevailing at the time of supply. The Comptroller allows taxable persons to adopt their own in-house exchange rates if the rates satisfy the following conditions:
• They are reflective of the Singapore money market at the relevant date. For example, exchange rates obtained from local banks, Singapore Customs, locally circulated newspapers, reputable news agencies and foreign central banks without exchange controls are acceptable to the IRAS.
• They are the daily buying rates, average of the buying and selling rates, or a good approximation of the daily exchange rates, corresponding to the time of supply.
• They are updated at least once every three months.
• They are consistently used for internal business reporting, accounting and GST purposes.
• They are used consistently for at least one year from the end of the accounting period in which the method was first used.
If the exchange rates used by taxable persons do not comply with these conditions, it is necessary for the taxable persons involved to seek the Comptroller’s approval of the use of an acceptable exchange rate.
Supplies to nontaxable persons. GST invoices are not required to be issued to nontaxable customers (i.e., private individuals). However, a simplified GST invoice or a receipt must be issued if requested by the customer.
Records. In Singapore, examples of what records must be held for GST purposes include records relating to a taxable person’s income and business expenses, such as tax invoices, agreements, credit notes and import/export documents.
In Singapore, GST books and records can be held outside of the country. This is allowed so long as the records can be made available to the IRAS upon request.
Record retention period. Taxable persons are required to maintain records for five years.
Electronic archiving. Electronic archiving is allowed in Singapore. Records can be kept electronically using a computer and/or accounting software. Physical copies of source documents need not be kept substantiating the business transactions for tax purposes if the source documents are kept electronically. Taxable persons should ensure that proper internal controls are put in place to ensure the integrity, completeness, accuracy, availability and reliability of electronic records, including all transactions executed electronically, where applicable.
I. Returns and payment
Periodic returns. Taxable persons generally file GST returns quarterly. However, taxable persons that receive regular refunds of GST may seek approval to file their returns monthly, to ease cash flow. The GST return is generally due one month following the end of the return period.
Periodic payments. The GST payment in full is generally due the same date as the GST return filing deadline, i.e., one month following the end of the return period.
Most taxable persons use the General Interbank Recurring Order (GIRO) for tax payment. Other electronic payment modes, such as internet banking, phone banking, PayNow QR, DBS PayLah! are also available.
Electronic filing. Electronic filing is mandatory in Singapore for all taxable persons. Submissions must be made via myTax.iras.gov.sg. Taxable persons are not required to submit any other documents when the GST return is filed. Under exceptional circumstances (e.g., business is under liquidation), a taxable person may file paper GST return.
Payments on account. Payments on account are not required in Singapore.
Special schemes. Major exporter scheme (MES). The MES is designed to ease the cash flow of businesses that import and export goods substantially. Businesses granted the MES can import non-dutiable goods with GST suspended and enjoy GST suspension on goods removed from a Zero GST warehouse.
Approved contract manufacturer and trader (ACMT) scheme. Contract manufacturers and traders under this scheme do not need to account for GST on value-added activities supplied to non-GSTregistered overseas customers or overseas persons who are registered under the Overseas Vendor Registration (OVR) regime as a pay-only person. The scheme is available to contract manufacturers within the semiconductor industry, printing industry and biomedical industry (active pharmaceutical ingredients manufacturing).
Approved marine fuel trader (AMFT) scheme. This scheme is designed to benefit qualifying businesses in the bunkering industry that make local purchases of approved marine fuel oil. Under AMFT, qualifying GST-registered businesses need not pay GST on local purchases of approved marine fuel oil from any GST-registered suppliers. This eases cash flow difficulties of the approved businesses by eliminating the need to pay GST up front and to subsequently reclaim it by obtaining a refund from IRAS.