Goods & Services Tax

When Should Your Company Register For GST?

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Recently I received a few enquiries on this topic.

Hope to share here with more business owners…

GST is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. In some countries, GST is known as the Value Added Tax (VAT).

Your liability for GST registration depends on the value of your taxable turnover. This refers to the value of goods and services supplied by you which are regarded as taxable supplies for GST purposes.
You must register for GST if:

 

Retrospective View

* Your taxable turnover at the end of the calendar quarter (i.e. 3 months ending Mar, Jun, Sep or Dec) prior to 1 Jan 2019 and the past three quarters is more than $1 million.

You will have to monitor at the end of every calendar quarter and register for GST if your taxable turnover for the past 12 months exceeds $1 million.
* Your taxable turnover at the end of any calendar year on or after 1 Jan 2019 is more than $1 million. (This is new)

For periods on or after 1 Jan 2019, taxable turnover will be computed on a calendar year basis for the purpose of determining registration liability. You have to monitor at the end of every calendar year (i.e. 31 Dec) and register for GST if your annual taxable turnover exceeds $1 million.

 

Prospective View

If at any time, you can reasonably expect your taxable turnover in the next 12 months to be more than $1 million.

You will have to register for GST when there is certainty that your taxable turnover will exceed $1 million in the next 12 months. You must have supporting documents to support your forecast value of $1million. For example:

* Signed contracts or agreements

* Quotations accepted by customers

* Confirmed purchase orders received from customers

* Invoices to customers with fixed monthly fee charged

* Income statements showing that past 12-month period was already close to $1 million and that annual turnover is on an increasing trend
On the other hand, you are not required to register for GST if there is no certainty that your taxable turnover will exceed $1 million in the next 12 months. For example, you made a forecast based on market assessment, business plans or sales targets.

 

Exception

You will not be required to register for GST if:

a. Your taxable turnover is wholly or mainly from zero-rated supplies and you can choose to apply for exemption from registration.

b. You are liable for GST registration under the retrospective view but not under the prospective view and the following conditions are met: 
* You are certain that your taxable turnover for the next 12 months will not exceed $1 million

* The taxable turnover is projected to be lower due to specific circumstances(e.g. large-scale downsizing of business)

* You have supporting documentation to substantiate your projection

You must nonetheless continue to monitor your taxable turnover at the end of the next calendar quarter (prior to 1 Jan 2019) or next calendar year (on or after 1 Jan 2019).

If you are not liable for GST registration, you may still choose to do so voluntarily after careful consideration.

Hope the above clarifies, otherwise feel free to leave your comment / query below.

If you need help, feel free to contact us at :

(O) +65 63851011

(M) +65 90880669

(E) [email protected]

www.corporatebackoffice.com.sg

Written by Kelvin Loh