GST is a broad-based tax on domestic consumption, it is also known as value added tax (VAT) in other jurisdictions. GST is charged to the end customer and the business selling the goods or services is responsible for charging and collecting the the tax from its customers as well as paying the tax to the IRAS, effectively, the business acts as a collection agent for IRAS. The tax is applied at the prevailing GST rate. The current rate in Singapore is 8%, although the Government has announced an intention to hike the rate to 9% in the near future.
There are certain services exemptions such as the provision of most financial services, supply of digital payment tokens, the sale and lease of residential properties and trading of investment precious metals.. GST is also levied on imported goods while export of goods and certain types of services provided to overseas clients are not charged GST.
GST can only be charged by GST registered businesses. Only businesses that exceed S$1 million in annual taxable turnover are required to be registered. However, companies with revenues below this threshold can voluntarily register as well.
The GST that a business collects from customers is called output tax. Conversely, GST paid on a business's purchases or paid to its suppliers is called input tax. A GST-registered business can claim credit for its GST input tax thereby only paying GST on the amount of value-add, which is calculated as the difference between its output and input tax. This allows companies to lower its cost by claiming credit on its input tax as output tax are eventually pass on to the end customer.
No, you cannot and must not claim any GST for purchases before the date of official registration for GST.
Under Regulations 26 and 27 of the GST (General) Regulations, some expenses are disallowed to be claimed as input tax. Common expenses include: employee family benefits, costs and running expenses incurred on motor registered under the business' or individual's name, or hired for business or private use, club subscription fees, non-obligatory medical expenses and medical and accident insurance premiums incurred for your staff and any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance.
Your GST number is your company UEN number.
If your company did not apply or did not get approval from the Inland Revenue Authority of Singapore (IRAS) for voluntary or mandatory GST, your company cannot charge GST on your customers.
You can check the official GST registration date and whether a company is GST-registered via this link.
Companies are only required to register for GST when its taxable revenue exceeds $1 million. However, if you are certain that your total taxable turnover for the next 12 months will not exceed $1 million because of specific circumstances(e.g. large-scale downsizing of business) and can substantiate this with documentation, you will not be required to register for GST.
The Inland Revenue Authority of Singapore (IRAS) usually takes 10 working days to process your GST application.