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Complete Guide to GST Registration in Singapore for Foreign Businesses
18/04/2023
Understanding the country’s tax laws is crucial if you’re a foreign business owner planning to expand into Singapore. One such tax law you must comply with is the Goods and Services Tax (GST). The GST is a value-added tax levied on the supply of goods and services in Singapore, and foreign businesses that meet certain criteria are required to register for GST.
However, registering for GST in Singapore can be overwhelming, especially if you need to become more familiar with the country’s tax laws. In this blog post, we will help foreign businesses navigate the GST registration process in Singapore.
What is GST in Singapore, and what is the rate?
The Goods and Services Tax (GST) is a consumption tax that applies to almost all supplies of goods and services in Singapore and imported goods. Essentially, it is the Singaporean equivalent of the Value-Added Tax (VAT) commonly used in other countries.
As of 1 January 2023, the prevailing rate of GST in Singapore is 8% and is charged on taxable goods and services sold by businesses registered under the GST scheme. However, starting in 2024, the GST rate will be increased to 9%, so businesses need to be aware of this change’s impact on their operations.
When do companies need to charge GST?
Previously, overseas businesses supplying services to customers in Singapore were not required to charge Goods and Services Tax (GST). However, to ensure consistency in the treatment of GST between local and foreign service providers, the Overseas Vendor Registration (OVR) regime was introduced. This means overseas businesses exporting services to Singapore must now charge GST under the OVR regime.
Initially, the OVR regime only applied to Business-to-Consumer (B2C) supplies of digital services. However, from 1 January 2023, it has also been extended to non-digital services and low-value goods. As a result, foreign vendors who provide digital or non-digital services to individuals or businesses in Singapore that are not registered for GST must charge and account for GST on those services.
If you are making a Business-to-Business (B2B) supply of services to a company, partnership, or sole proprietor registered for GST in Singapore, you do not need to account for GST. However, the recipient of the services is liable for accounting and paying GST on the value of the imported services, as if they were the supplier, under the Reverse Charge regime.
What digital services are subject to GST?
Digital services refer to services provided via the Internet or an electronic network, typically in an automated manner using computers. These services encompass a broad range of activities, such as:
- Downloadable electronic media, including mobile applications, e-books, and movies;
- Subscription-based media, such as streaming services for TV shows, music, and online gaming;
- Software programs, such as downloadable software, drivers, website filters, and firewalls;
- Electronic data management services, such as website hosting, online data warehousing, file-sharing, and cloud storage services; and
- Any support services performed electronically to facilitate a non-digital transaction, such as commission fees, listing fees, and service charges.
In the digital age, the supply of digital services is becoming increasingly common, and as such, businesses need to understand their GST obligations related to these activities.
What non-digital services are subject to GST?
Goods and Services Tax (GST) has also been extended to cover imported non-digital services. Non-digital services refer to services that require human intervention and are supplied over the Internet without the recipient needing to be physically present at the location where the service is being performed.
Examples of these services include:
- educational learning,
- fitness training,
- counseling,
- telemedicine, and;
- even hairdressing services.
This extension of GST to non-digital services will be effective on 1 January 2023. It is important for businesses that provide such services to familiarize themselves with the new rules and ensure that they comply with the relevant regulations.
What low-value goods are subject to GST?
Currently, Goods and Services Tax (GST) is collected on physical goods imported via land or sea, as well as those imported via air or post valued above S$400, except intoxicating liquors and tobacco which are subject to GST regardless of their value.
However, beginning on 1 January 2023, GST will also be imposed on low-value goods imported via air or post, i.e., physical goods valued at less than S$400. This includes goods purchased from popular online shopping platforms such as Lazada, Shopee, Taobao, and Amazon. As a result, overseas suppliers of such goods will be required to charge GST on selling these low-value goods starting from 1 January 2023.
In addition, GST-registered businesses that are subject to the Reverse Charge regime will also be required to account for GST on Business-to-Business (B2B) imports of low-value goods procured from local and overseas suppliers from 1 January 2023.
The following table provides a summary of how GST will be levied on goods and services imported into Singapore:
Source
| Type of goods/services | Imported goods (imported via land or sea AND goods imported via air or post that are valued above $400) | Low-value goods imported via air or post | Imported digital services | Imported non-digital services |
| Date from which GST will be levied | GST is already being levied for such goods | 1 January 2023 | 1 January 2020 | 1 January 2023 |
| Registration of GST | No registration is needed as import GST will be charged and collected by Singapore Customs | Overseas businesses are required to register under the OVR regime and charge GST | Overseas businesses required to register under the OVR regime have been required to charge GST | Overseas businesses are required to register under the OVR regime and charge GST |
How do you register for GST?
To comply with GST regulations in Singapore, overseas suppliers must register for GST under either the retrospective or prospective basis, provided they meet the following conditions:
Compulsory GST registration
Retrospective basis:
If the value of your global turnover at the end of each calendar year (i.e. 1 January – 31 December) exceeds S$1 million; and
If the value of low-value goods and digital services provided to non-GST registered customers in Singapore at the end of each calendar year (i.e. 1 January – 31 December) exceeds S$100,000
Prospective basis:
If you can reasonably expect the value of your global turnover to exceed S$1 million for the next 12 months; and
If you can reasonably expect the value of your supply of low-value goods and digital services to non-GST registered customers in Singapore to exceed S$100,000 for the next 12 months.
If you are liable for registration, you are required to apply for GST registration within 30 days of:
- The end of the relevant calendar year (i.e. 1 January – 31 December) under the retrospective basis; or
- The day when you became liable for GST registration under the prospective basis
Voluntary GST registration
- If you are an overseas supplier but not liable for GST registration in Singapore, you can still apply for voluntary GST registration if you wish to do so. To apply for voluntary registration, you will have to let Singapore’s tax authority, namely the Inland Revenue Authority of Singapore (IRAS), know in writing that you are operating a business and have the intention to make:
- Supplies that would be taxable if made in Singapore; and
- Supplies of digital services, directly or on behalf of overseas suppliers, to non-GST registered customers in Singapore.
Upon approval of your application, you must be registered for at least 2 years. IRAS can impose other conditions for your GST registration, e.g., making you take up a banker’s guarantee.
Registering for GST as an overseas supplier
As an overseas supplier registering for GST in Singapore, you will be enrolled under a simplified pay-only regime that does not allow you to claim input tax on taxable purchases made in Singapore. However, you will benefit from simplified GST reporting and documentation requirements.
How do I register for GST?
o apply for GST registration in Singapore as a foreign business, you can complete an online form and submit a few required documents, including;
- a signed Declaration Form by the director/partner/sole proprietor and;
- a certificate of incorporation. The certificate of incorporation should include the entity name, date of incorporation, and country of incorporation. If the certificate is not in English, an official translation into English and notarization is required before submission.
While appointing a local agent to handle your tax matters in Singapore is not mandatory, you may choose to do so.
When do companies in Singapore need to pay GST?
After registering for GST under the simplified pay-only regime, you must submit simplified GST returns. This means you only need to report the value of digital services supplied and the GST collected in the relevant accounting period on a quarterly basis.
Following this, you must file your GST returns and pay within a month of the end of the accounting period. The relevant accounting periods are as follows:
- January to March
- April to June
- July to September
- October to December
Therefore, if you are filing your returns for April to June, the due date for filing and payment of GST would be 31 July.
What happens if I don’t pay GST?
Failure to pay the tax by the due date may result in a penalty of 5%. In addition, if the tax remains unpaid 60 days after the due date, an additional penalty of 2% will be imposed for every month that the tax remains unpaid, subject to a maximum of 50% of the outstanding tax.
How can Belaws help?
If you have a question about GST in Singapore, please speak directly with one of our experts.
You can also view our Singapore incorporation services here.
This article is for information purposes only and does not constitute legal advice.
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Frequently Asked Questions
How do I register my GST number in Singapore?
You can register your GST number in Singapore by submitting an application online through the Inland Revenue Authority of Singapore (IRAS) website using your SingPass or CorpPass account. Alternatively, you can also submit a hard copy of the application form to the IRAS.
Who needs to register for GST in Singapore?
Businesses that make taxable supplies of goods and services and have an annual turnover of more than S$1 million are required to register for GST in Singapore. However, businesses that have an annual turnover of less than S$1 million may choose to register for GST voluntarily.
When should I register for GST in Singapore?
You should register for GST in Singapore within 30 days of your business exceeding the annual turnover threshold of S$1 million, or if you anticipate that your business will exceed the threshold within the next 12 months.
What does it mean to be GST registered in Singapore?
Being GST registered in Singapore means that your business is registered with the Inland Revenue Authority of Singapore (IRAS) and is authorized to charge GST on taxable goods and services provided to customers. GST-registered businesses can also claim input tax credits on GST paid on business purchases and expenses.
Is GST number the same as business number in Singapore?
No, GST number and business number are not the same in Singapore. A GST number is a unique identification number assigned by the Inland Revenue Authority of Singapore (IRAS) to businesses that are registered for GST. On the other hand, a business number in Singapore generally refers to the Unique Entity Number (UEN) which is a standard identification number used by government agencies to identify businesses.
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