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For non-GST registered businesses (including registering for GST)

Where it is not a requirement under the law for you to register for GST, you may choose to apply for GST registration on voluntary basis if you satisfy any of the following.

  • You make taxable supplies
  • You make only out-of-scope supplies. Out-of-scope supplies mainly refer to sales of goods which did not enter Singapore and goods in transit. 
  • You make exempt supplies of financial services that are also international services.

If you carry on a business and intend to make any of the above types of supplies in the course or furtherance of that business, we may also allow you to register voluntarily. However, should your intention fail to materialise and the Comptroller is not satisfied that you have firm intention to make taxable supplies from the start, the input tax you have claimed following your GST registration may be recovered from you.

On this page:
Requirements for voluntary registration
Should I register voluntarily?
     To consider – Responsibilities of a GST-registered business
     To consider – Profile of your suppliers
     To consider – Profile of your customers
     To consider – Type of sales which you make
     To consider – Your pricing decision after GST registration

Requirements for voluntary registration

  1. Be on GIRO Plan for payment and/ or refund of GST. 
  2. Provide the security deposit as may be imposed by the Comptroller on a case-by-case basis.
  3. The director of the company/ sole-proprietor/ partner/ trustee has to complete the e-Learning course “GST-Before I Register” and its quiz before submitting the registration form. This 20-minute course includes the following information:
    • Responsibilities and obligations of a GST-registered business;
    • Factors to consider before registering voluntarily; and
    • Conditions for voluntary registration.
  4. Complete the e-learning course "Introduction to GST" within three months from the effective date of registration.
  5. Remain GST-registered for at least two years
  6. Make taxable supplies within two years if you have not started making taxable supplies at the point of applying for GST registration.
  7. Comply fully with the responsibilities of a GST-registered business
  8. Any other conditions as may be imposed by IRAS. 
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Should I register voluntarily?

A benefit of registering for GST is that you can claim the GST incurred on your purchases, subject to the conditions for claiming input tax. If your turnover is near but below the S$1 million threshold for compulsory registration, registering voluntarily means that you will not need to monitor your turnover constantly.

However, the cost of being GST-registered may outweigh the benefits that you can enjoy. Since a voluntarily registered business needs to remain registered for two years, you are advised to perform a cost-benefit analysis based on a two-year period before registering. You should consider the following factors carefully.

To consider – Responsibilities of a GST-registered business

Once registered, you are a GST collecting agent of the government. This means that there are responsibilities that you need to fulfill. Complying with these responsibilities may increase your administrative costs.

1) e-File accurate GST returns in a timely manner

  • You need to e-File your GST returns in a timely manner. You will have prescribed accounting periods of monthly, quarterly or half-yearly basis. GST returns must be e-Filed within one month after the end of each accounting period. If there is no transaction done, you are still required to submit a "NIL" GST return.    
  • You need to submit accurate GST returns. To do so, you need to be familiar with the GST rules relating to your business.

Therefore, you may have to engage the required assistance for GST reporting (e.g. full-time accounting staff, computers) and put in place accounting and record-keeping systems (e.g. buy or make modifications to existing accounting system). You may also need to train your staff to ensure they perform the charging and claiming of GST correctly for your business transactions.

2) Pay tax in a timely manner

  • When GST charged on your sales is more than GST incurred on your purchases, you need to pay the difference within one month after the end of each prescribed accounting period.  

You will need to account for and pay GST to IRAS even if you receive payment from your customers after the end of the prescribed accounting period.

3) Keep business and accounting records for 5 years

Types of records to keep include:

  • Tax invoices and receipts issued/ received
  • Credit notes and debit notes
  • Business contracts and agreements
  • Tourist refund claim forms (if any)
  • Import and export documents (e.g. permit, bill of lading, air waybill)
  • Business and accounting records (e.g. general ledgers/ debtors, creditors ledgers, purchase orders, delivery notes, purchase and sales books, cash books, records of daily takings, stock records, bank statements, bank-in slips, relevant business correspondences, GST accounts and financial statements)
  • Other documents supporting GST declaration

4) Change of price displays and invoices

  Any price displays, advertisements, publications or quotations in respect of goods or services made to the public must be inclusive of GST.
  You are required to reflect your GST registration number on all tax invoices, simplified tax invoices and receipts.

Therefore, you may need to incur cost to re-print your price displays and tax invoices to reflect the changes.

5) Assist in GST Audit

As a GST-registered business, you are subject to audit. Audits can be via telephone interviews, arranged or surprise visits. In the course of audit, your GST refunds (if any) can be withheld.  We can also request your suppliers or customers for confirmation of information furnished. Therefore, you need to consider the cost of time and work required in providing assistance.

6) Accounting for GST On Business Assets At Point Of De-Registration

In the event that your GST registration is cancelled, you need to account for GST on business assets held on the last day of registration if GST was previously claimed on these purchases. This applies when the total market value of these business assets is more than $10,000.

To consider – Profile of your suppliers

If your suppliers are GST-registered or you import goods, you will benefit from GST registration because you will generally be able to claim the GST paid.  However, if your suppliers are not GST-registered, you cannot claim any GST since these suppliers did not charge you GST. 

Example:

Your suppliers are not GST registered. Assuming that your sale prices are fixed (e.g. due to market competition), this numerical illustration shows that registering for GST will result in a reduction of your gross profit.

 
  Before GST Registration After GST Registration
Sale price of goods $214 $214
(inclusive of GST $14)
Purchase price of goods $100 $100
GST paid to/ claimed from IRAS
(GST charged on sale – GST incurred on purchase)
$0 Paid $14
Gross profit
(Sale price – Purchase price – GST paid to IRAS)
$114 $100

To consider – Profile of your customers

If your customers are GST-registered, they can claim the GST that you need to charge after registering for GST. However, if your customers are not GST-registered (e.g. end-consumers), they cannot claim the GST charged. You may lose your customers when you increase your price to include the GST amount. On the other hand, maintaining the same price means that you need to “absorb” the GST amount (i.e. reduce your profit).

Example:

Your customers are not GST-registered. Assuming that your sale prices are fixed (e.g. due to market competition), this numerical illustration shows that registering for GST will result in a reduction in gross profit.

  Before GST Registration After GST Registration
Sale price of goods $214 $214
(inclusive of GST $14)
Purchase price of goods $107
(cannot claim GST)
$107
(inclusive of GST $7)
GST paid to/ claimed from IRAS
(GST charged on sale – GST incurred on purchase)
$0 Paid $7
Gross profit
(Sale price – Purchase price – GST paid to IRAS)
$107 $100

To consider – Type of sales which you make

If you export your goods or provide services to overseas customers, you are likely to charge GST at 0% for such sales (i.e. zero-rated supplies) after GST registration. In effect, the GST implication on your sales is the same as before GST registration. On the other hand, you may benefit from GST registration because you will be able to claim the GST incurred on your purchases.  Please refer to Exporting goods out of Singapore and Providing international services to check if your sales can be zero-rated.

Example:

You make zero-rated supplies. Therefore, your sale price remains the same before and after GST registration. This numerical illustration shows that registering for GST will result in an increase of gross profit. 

  Before GST Registration After GST Registration
Sale price of goods $200 $200
Purchase price of goods $107
(cannot claim GST)
$107
(inclusive of GST $7 )
GST paid to/ claimed from IRAS
(GST charged on sale – GST incurred on purchase)
$0 Claimed $7
Gross profit
(Sale price – Purchase price + GST claimed from IRAS)
$93 $100

To consider – Your pricing decision after GST registration

You need to decide whether to pass on the cost of GST (i.e. increase your price to include GST amount) or ‘absorb the GST’ to maintain your price competitiveness. 

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Last Updated on 27 October 2014


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