In Singapore, GST is introduced as a broad based consumption tax that is levied on goods importation collected through the Singapore Customs, as well as other services supplied. Depending on circumstances, certain corporations are required to register for GST while others do not. It is imperative to know if one’s business type requires registration before proceeding with Singapore company incorporation so as to avoid future problems.
Business owners are highly recommended to check for GST liabilities before they proceed with Singapore company incorporation by looking at the projected value for their taxable turnovers. Companies are usually liable for GST registration if their total taxable turnover exceeds $1 million for past three calendar quarter ends. This can be determined by using the GST registration calculator provided by Singapore’s official IRAS website. Business owners who are liable for GST registration but have a taxable turnover that is mainly or even wholly from supplies that are zero-rated can also apply for GST exemption. The application is to be submitted to the Comptroller of GST for exemption via completing the necessary form (Form GST F2, Application for exemption from registration) along with other documents.
If the business owner’s application is successful, they will receive a notification from the Comptroller. They will also no longer be able to collect GST on the sales they make as well as be exempt from having to file GST returns. Businesses that did not have their application approved will still be required to register for GST.
If there are material changes, the business has the responsibility of notifying the Comptroller. Typically, business owners are allowed a time period of 30 days within/from the date in which the change happened. Businesses that have monitored and noted the fact that they are no longer able to qualify for the GST exemption will have to register for GST.
The GST registration process for previously non-GST registered businesses is the same. They will only differ based on registration type and business constitution, for example overseas and joint ventures. Business owners are advised to make sure that their application forms are submitted with complete information including all supporting documents since there is a chance that the application may be withdrawn otherwise.
Yet another important factor to remember is that businesses are not able to collect or charge for GST before they are officially registered. They must receive applicant confirmation presented in a letter to the business to inform that the business is registered, with a GST registration number and the effective date of the registration.
In addition, business owners can also check if businesses are GST registered by accessing the Register of GST registered businesses under IRAS and searching with the business name or tax reference number. These are just some of the factors to be prepared for before proceeding with singapore company incorporation. By better understanding the processes that need to be completed and monitored, business owners will be able to reduce the risk of accidentally incurring penalties or even more dire consequences.