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Basics of GST

GST registration Singapore is one of the most important compliance requirements that every business operating in the country must understand. The Goods and Services Tax (GST) is a broad-based consumption tax levied on the import of goods into Singapore, as well as on the supply of goods and services within the country. As a key source of government revenue, GST affects virtually every business transaction and plays a central role in Singapore’s tax framework.

Whether you are a new entrepreneur setting up a company or an established business owner looking to stay compliant, having a thorough understanding of GST registration Singapore requirements, obligations, and benefits is essential to running your operations smoothly and avoiding costly penalties.

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Who Is Required to Complete GST Registration Singapore?

Under Singapore’s Goods and Services Tax Act, businesses whose annual taxable turnover exceeds S$1 million are legally required to register for GST. This is known as compulsory GST registration Singapore. The Inland Revenue Authority of Singapore (IRAS) enforces this requirement strictly, and failure to register on time can result in backdated tax assessments and penalties.

In addition to turnover-based registration, businesses may also be required to register under the Reverse Charge regime or the Overseas Vendor Registration (OVR) regime, depending on the nature of their transactions. These provisions ensure that GST is applied fairly, even when services are imported from overseas suppliers.

If your business has not yet reached the S$1 million threshold, you may still apply for voluntary GST registration Singapore. Voluntary registration can be beneficial for businesses that wish to claim input tax on their purchases and expenses, especially if they deal primarily with other GST-registered businesses. However, once you register voluntarily, you must remain registered for at least two years and comply with all GST filing requirements during that period.

How GST Is Charged on Taxable Supplies

Once a business has completed GST registration Singapore, it is required to charge GST on all taxable supplies of goods and services made in Singapore, unless those supplies qualify for exemption or zero-rating. The current GST rate in Singapore is 9%, which took effect from 1 January 2024.

The GST that a business charges its customers on taxable supplies is referred to as output tax. Businesses must collect this output tax at the point of sale and remit it to IRAS within one month after the end of the prescribed accounting period, which is typically on a quarterly basis.

It is important to note that only GST-registered businesses are authorised to charge GST. If you have not completed GST registration Singapore, you cannot impose GST on your invoices and, correspondingly, you cannot claim input tax credits on your business purchases.

Claiming GST on Business Purchases and Expenses

One of the key advantages of GST registration Singapore is the ability to claim input tax credits. Input tax refers to the GST that your business pays on goods and services purchased for business purposes. These may include office supplies, professional services, raw materials, software subscriptions, and other operational expenses.

To claim input tax, your business must meet the conditions set out by IRAS, which include ensuring that the expenses are directly attributable to the making of taxable supplies, and that proper tax invoices are maintained as supporting documentation. Accurate record-keeping is vital, as IRAS may request documentation during audits or compliance reviews.

Filing GST Returns and Paying Net GST

Every GST-registered business in Singapore must file a GST return (GST F5) with IRAS within one month of the end of each accounting period. Most businesses file on a quarterly basis, although some may be placed on monthly filing cycles depending on their circumstances.

The GST return captures both output tax (the GST collected from customers) and input tax (the GST paid on business purchases). The difference between these two figures determines your net GST payable. If your output tax exceeds your input tax, you must pay the difference to IRAS. Conversely, if your input tax exceeds your output tax, you are entitled to a GST refund.

Filing GST returns accurately and on time is a critical obligation that comes with GST registration Singapore. Late or incorrect filings can attract penalties, surcharges, and increased scrutiny from IRAS.

Why Professional GST Advisory Matters

Navigating GST registration Singapore and its ongoing compliance obligations can be complex, particularly for businesses with diverse revenue streams, international transactions, or mixed supplies. Engaging a professional GST advisory service ensures that your business remains fully compliant while optimising your tax position.

At BluTrust, our experienced tax professionals provide end-to-end GST advisory services, from assisting with initial GST registration Singapore applications to preparing and filing quarterly returns, handling voluntary disclosures, and advising on complex transactions. We help businesses across a wide range of industries understand their GST obligations and make informed decisions.

Get Started with BluTrust Today

If you are unsure whether your business needs to complete GST registration Singapore, or if you need expert guidance on charging, claiming, and filing GST, our team is ready to help. Contact BluTrust today to book a consultation and ensure your business stays on the right side of Singapore’s GST regulations.

Capital Allowances

Deductions for the decline in value of depreciating assets are available under the Uniform capital allowance (UCA) system. In addition to the rules for depreciating assets, deductions are allowed for certain other capital expenditure.

Small business entities have the option of choosing simplified depreciation rules. Under these rules, small business entities can claim an immediate deduction if the cost is below the relevant threshold or else add the asset to the small business depreciation pool.

Land, trading stock and most intangible assets (excluding exceptions such as intellectual property and in-house software) are not depreciating assets.

The decline in value is generally calculated by spreading the cost of the asset over its effective life, using one of two methods:

Prime cost method – decline in value each year is calculated as a percentage of the initial cost of the asset
Diminishing value method – decline in value each year is calculated as a percentage of the opening depreciated value of the asset
MORE: Australian Taxation Office (ATO) Decline in value calculator.

For most depreciating assets, taxpayers can either self-assess the effective life, or use estimates published by the ATO. Taxpayers can recalculate, either up or down, the effective life of an asset if the circumstances of use change and the effective life initially chosen is no longer accurate. An improvement to an asset that increases its cost by 10% or more in a year may result in an obligation to recalculate the effective life of the asset.

Decline in value of cars is restricted to the car limit. From 1 July 2022, the luxury car tax threshold for luxury cars is $64,741 (it was $60,733 for the year commencing 1 July 2021). Luxury car leases are treated as a notional sale and purchase, with decline in value restricted to the car limit.

The decline in value of certain depreciating assets with a cost or opening adjustable value of less than $1,000 can be calculated through a low-value pool. The decline in value for depreciating assets in the pool is calculated at an annual diminishing value rate of 37.5%.

Changes for 2022 and 2023

From 12 March 2020 until 31 December 2020, the asset cost threshold for the instant asset write-off (which is usually only available to small business entities) has increased from $30,000 to $150,000 and the eligibility criteria expended to cover entities with an aggregated turnover threshold of less than $500 million (up from $50 million).

Further, from 12 March 2020 until 30 June 2021 the Backing business investment measure applied to businesses with aggregated turnover below $500 million and provides either:

A deduction of 50% of the cost or opening adjustable value of an eligible asset on installation (existing depreciation rules apply to the balance of the asset's cost), or
For businesses using a small business depreciation pool, a deduction of 57.5% of the cost of the asset in the first year, with the balance added the asset to the small business pool
In addition, from 6 October 2020 to 30 June 2023, full expensing applies to allow eligible businesses with an aggregated turnover of less than $5 billion to deduct the full cost of new eligible depreciating assets. For businesses with aggregated turnover of less than $50 million, full expensing also applies to eligible second-hand assets.

Activity Statement

Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business taxpayers who need to pay quarterly PAYG instalments also use activity statements.

Activity statements are personalised to each taxpayer to support reporting against identified obligations.

Activity statements for businesses may be due either quarterly or monthly. Generally, businesses can lodge and pay quarterly if annual turnover is less than $20 million, and total annual PAYG withholding is $25,000 or less. Businesses that exceed one or both of those thresholds will have at least some monthly obligations. Non-business taxpayers are generally required to lodge and pay quarterly.

Taxpayers with small obligations may be able to lodge and pay annually. Some taxpayers may receive an instalment notice for GST and/or PAYG instalments, instead of an activity statement.

The Australian Taxation Office (ATO) web site provides instructions on lodging and paying activity statements. Detailed instructions are provided for each of the different tax obligations:

GST (Goods and Services Tax)
PAYG (Pay As You Go) Instalments
PAYG (Pay As You Go) Withholding
FBT (Fringe Benefit Tax)
LCT (Luxury Car Tax)
WET (Wine Equalisation Tax)
Fuel Tax Credits