Do I Need to Register for GST

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).

Compulsory Registration

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

  1. 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.

  2. Your taxable turnover at the end of any calendar year on or after 1 Jan 2019 is more than $1 millionNew!

    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.

You are encouraged to use the GST Registration Calculator (1.3MB) to assist you in the monitoring of your registration liability. 

 

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. 

To support that you are not liable to register under retrospective view, you are required to maintain: 

(a)   Documentary evidences to prove that the specified circumstances had occurred; and

(b)   Detailed computation showing how the projected taxable turnover for the next 12 months was determined to be $1million or less.

 Specified circumstances Examples of supporting documents

 1

Expiry/termination of high-value sales contract from a major customer and you are unlikely to enter into new sales contracts in the next 12 months

  • Sales contracts with details on the commencement and expiry/termination dates  
  • Correspondences with customers on early termination of sales contract and evidence of payment of early termination fees, if any 
  • Correspondences with customers to show that any new sales contracts entered into in the subsequent 12 months were unsolicited and unexpected

 2

Large-scale downsizing of business e.g. divestment of certain business lines, cessation of manufacturing activities, closure of retail shops/outlets, or relocation of business activities to overseas 

  • Notes of Board of Directors’ meeting/directors’ resolution (for corporate businesses) or management meetings (for non-corporate businesses) on decision   
  • Notification to employees or correspondences with third parties informing of the divestment, cessation, closure or relocation
  • Termination of lease of property arising from down-sizing

 

 3

 

Revocation of business licence or termination of sales distribution rights

 
  • Notification from external parties on the revocation of licence or termination of rights   
  • Records showing past revenue brought in by these activities that require the licence or rights

 

4

 

Cessation of all business activities or preparation to wind up, dissolve or strike-off business

 
  • Notes of Board of Directors’ meeting/directors’ resolution (for corporate businesses) or management meetings (for non-corporate businesses) on the decision   
  • ACRA business profile showing that business has ceased, wound up, dissolved or struck-off  
  • Notification to employees, suppliers/customers or correspondences with third parties informing them of cessation, winding up, dissolving or striking-off of business
  • Termination of lease of property arising from cessation, winding up, dissolving or striking-off of business

Notification Period and Effective Date of Registration

 

You are required to apply for GST registration within 30 days from the date your liability to register arose. 

 

The effective date of registration is as follows:  

  • Liable for compulsory registration under retrospective view

    You will be registered on the first day of the third month following the end of the calendar quarter (prior to 1 Jan 2019) or calendar year (on or after 1 Jan 2019).
     
    Taxable turnover exceeding $1millionDue date to apply for GST registrationEffective date of registration
    1 Apr to 31 Mar30 Apr1 Jun
    1 Jul to 30 Jun30 Jul1 Sep
    1 Oct to 30 Sep30 Oct1 Dec
    1 Jan to 31 Dec30 Jan 1 Mar
  • Calendar year with taxable turnover exceeding $1million Due date to apply for GST registrationEffective date of registration
     1 Jan to 31 Dec 30 Jan1 Mar 
  • Liable for compulsory registration under prospective view

    You will be registered on the 31st day from the date of forecast.

    Date of forecastDue date to apply for GST registration Effective date of registration
    Contract or agreement with more than $1 million value signed on 1 Jul 201631 Jul 2016 1 Aug 2016
    Quotation with more than $1 million value accepted by customer on 2 Sep 20162 Oct 2016 3 Oct 2016
    Past 12-month turnover as at 31 Dec 2015 was $900,000. As turnover has increased by 15% on year-to-year basis, turnover for next 12 months projected to be more than $1 million on 15 Jan 2016. 14 Feb 201615 Feb 2016 

    Late Notification of Liability for GST Registration

     

    There are serious consequences for late registration:

    1. Your date of registration will be backdated to the date that you were liable to be registered.
    2. You will have to account for and pay GST on your past sales starting from the effective date of registration, even if you did not collect any GST from your customers.
    3. You may face a fine of up to $10,000 and a penalty equal to 10% of the GST due. Prosecution action may apply.

    If you submit an application for GST registration and voluntarily disclose that you are late in registration, we will generally waive the late notification fine and penalties. If you have difficulties paying the GST due on the backdated period, we may allow you to pay the GST due in instalments.

Computing Your Business Turnover

The table below explains the different methods used to compute your business taxable turnover, depending on whether you are a sole-proprietorship, a partnership, or a private limited company.

 

Sole-Proprietorship (Individual)PartnershipCompany (e.g. Private Limited Company)

How do I compute business turnover?

Combine the turnover of: all your sole-proprietorship businesses, AND income derived from your trade, profession or vocation (e.g. a taxi driver, hawker, commission agent such as insurance agent or multi-level marketing agent, freelancer such as fitness instructor or book-keeper, accountant with own business practice, etc.) Refer to example below for illustration.

Combine the turnover of all partnership businesses with the same composition of partners.

Please refer to example below for illustration.

Compute the turnover of that single company. If your company (as a legal entity) owns sole-proprietorship businesses, you need to combine the turnover of

  • the company, and
  • all its sole-proprietorship businesses.

How will my businesses be registered for GST?

GST registration will be in the name of the sole-proprietor (i.e. your name). All sole-proprietorship businesses under your name will be GST-registered. This includes sole-proprietorship businesses which you may set up in the future.

Each partnership business that is required to register for GST will be separately registered under its own name. Once your partnership is GST-registered, all businesses with the same composition of partners need to be GST-registered. This includes businesses with the same composition of partners which you may set up in the future.

GST registration will be in the name of your company.

You have two sole-proprietorship businesses (Businesses A and B). You also drive a taxi on a part-time basis.

In the past 12 months:

  • Business A turnover is $500,000.
  • Business B turnover is $490,000.
  • Income derived from your taxi driving is $30,000.

Example 1

To compute your business turnover:

  1. Combine the turnover for Business A, Business B and the income derived from taxi driving.
  2. Total Turnover/Income: $500,000 + $490,000 + $30,000 = $1,020,000
  3. The combined turnover (including the income from the taxi driving) exceeds $1 million.
  4. You must register for GST immediately if you can reasonably expect your total turnover to be more than $1 million for the next 12 months.

Scenario 1:

You and Mary own two partnership businesses (Businesses C and D). You also own a partnership business (Business E) with John.

In the past 12 months:

  • Turnover of Business C is $200,000
  • Turnover of Business D is $300,000
  • Turnover of Business E is $600,000

doineedtoregister2

To compute your business turnover:

  1. Combine turnover of all partnership businesses with the same composition of partners.
  2. You own Businesses C and D with Mary. Your Business Turnover is $200,000 + $300,000 = $500,000.
  3. The combined turnover is $500,000. You need not register for GST if you expect your business turnover to be less than $1 million for the next 12 months. You may, however, apply for voluntary GST registration after careful consideration .

You should calculate the business turnover for Business E separately because you have a different business partner - John.

Scenario 2:

You and Mary own two partnership businesses (Businesses C and D).

In the past 12 months:

  • Turnover of Business C is $500,000
  • Turnover of Business D is $600,000

doineedtoregister3

To compute your business turnover:

  1. Combine turnover of all partnership businesses with the same composition of partners.
  2. You own Businesses C and D with Mary. Your Business Turnover is $500,000 + $600,000 = $1,100,000.
  3. The combined turnover is $1,100,000. You need to register your partnership businesses C and D for GST immediately if you reasonably expect your business turnover to be more than $1 million for the next 12 months.
  4. Upon registration, each of your partnership businesses will be registered under their own individual GST registration number and you will need to file separate GST returns for them.

Scenario 3:

You and Mary own two partnership businesses (Businesses C and D). You, Mary, and John also own one partnership business (Business E).

In the past 12 months:

  • Turnover of Business C is $200,000
  • Turnover of Business D is $300,000
  • Turnover of Business E is $600,000

doineedtoregister4

To compute your business turnover:

  1. Combine turnover of all partnership businesses with the same composition of partners.
  2. You own Businesses C and D with Mary. Your Business Turnover is $200,000 + $300,000 = $500,000.
  3. The combined turnover is $500,000. You need not register for GST if you expect your business turnover to be less than $1 million for the next 12 months. You may, however, apply for voluntary GST registration after careful consideration .

You should calculate the business turnover for Business E separately because you have a different composition of business partners - John and Mary.

You are the director of private limited company F which is operating a trading business selling goods in Singapore. You incorporated another private limited company G a few years ago for the purpose of diversifying into a different line of business of rental of commercial properties.

In the past 12 months:

  • Turnover of Company F is $1,100,000
  • Turnover of Company G is $500,000

To compute your business turnover:

  1. The turnover of Company F exceeds $1 million.
  2. Company F must register for GST immediately if it reasonably expects its total turnover to be more than $1 million for the next 12 months.
  3. The turnover of Company G is $500,000. Company G need not register for GST if it expects its total turnover to be less than $1 million for the next 12 months. Company G may, however, apply for voluntary GST registration after careful consideration .

For GST purposes, all currency/monetary amounts refer to Singapore dollars.

  • Do I need to include income from sale of capital assets when computing my business turnover for GST registration purpose?

    No, you can exclude income from sale of capital assets when computing my business turnover for GST registration purpose.
  • My partnership is running a property trading business. Do I need to include the proceeds from the sales of commercial properties that were held in the name of the partners as bare trustees of the partnership, when computing my partnership’s taxable turnover for GST registration purpose?

    Yes, you have to include the proceeds from the sale of these commercial properties when computing your partnership's taxable turnover for GST registration purpose. As your partnership is in the business of trading in properties, the properties held by the partners as bare trustees of the partnership are not capital assets of the business. The sales of commercial properties by the bare trustees are the taxable supplies made by your partnership. 

  • If i am late in notifying my liability to register for GST, can the requirement for backdating the effective GST registration date and payment of backdated tax be waived?

    No. GST is a self-assessed tax. Businesses are responsible to monitor their sales and register for GST once the annual taxable turnover exceeds S$1 million.

  • If my effective date of registration is backdated due to late notification, can I recover the GST on the past sales from customers?

    It depends on the terms of agreement with your customer. If your customer agrees to pay the GST for the backdated period, you may issue a credit note to cancel the original invoice and issue a tax invoice with GST to your customer. If you have more than one invoice issued to the same customer, as an administrative concession, you may issue a tax invoice quoting the invoice numbers of all the original invoices and showing only the GST amount to your customer. The credit note and new tax invoice should show a current date. For customers who are GST-registered, they may claim back the GST paid as their input tax if they satisfy the input tax conditions.

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