Apply for GST Registration
Before registering for GST voluntarily, you should consider whether:
- you qualify for voluntary registration;
- you are able to meet the conditions imposed for voluntary registration; and
- the benefits outweigh the costs of registering for GST.
On this page:
Qualifying for voluntary registration
You may apply to be GST-registered on a voluntary basis even if it is not compulsory for you to register for GST.
To qualify for voluntary registration, you must satisfy any of the following:
- Your business makes taxable supplies;
- Your business only makes out-of-scope supplies. Out-of-scope supplies mainly refer to sales of goods which did not enter Singapore and goods in transit;
- Your business makes exempt supplies of financial services that are also international services; or
- Your business procures services from overseas service providers or imports low-value goods and you would not be entitled to full input tax credit even if you were GST-registered.
If you have not started any of the above transactions, but intend to do so in future, you may also apply for voluntary GST registration. You will have to satisfy the Comptroller that you are operating or carrying on a business, and have firm intentions
to carry out the above transactions.
If you do not have firm intentions or plans to carry out any of the above transactions, you should not apply for GST registration.
For more information on the different categories and
types of taxable and non-taxable supplies, refer to the page on Goods and Services Tax: What it is and how it works.
Conditions for voluntary registration
If you qualify for voluntary GST registration (see the section above), you will need to fulfill conditions for voluntary registration before and after you are registered for GST.
For further details on these conditions, please refer to GST: Conditions for GST Voluntary Registration at paragraph 3 (PDF, 145KB).
Benefits and costs of voluntary registration
One of the benefits of registering for GST is that you can claim the GST incurred on your purchases, subject to the conditions for claiming input tax. However, if you are a partially exempt business (PDF,459KB) or an organisation with business and non-business activities (PDF, 696KB), you will not be able to claim your input tax in full, as the input tax attributable to the making of exempt supplies, wholly non-business activities and activities with non-business elements are not claimable.
When 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 costs of being GST-registered may outweigh its benefits. As voluntarily registered businesses must remain registered for 2 years, you should assess the costs and benefits over a 2-year period before making the decision to register for GST.
The following are the areas you should consider before registering for GST:
A. Responsibilities of being GST-registered
B. Profile of your suppliers
C. Profile of your customers
D. Type of sales made by you
A. Responsibilities of being GST-registered
Once registered, you will be a GST collecting agent of the government. This means that there are responsibilities that you need to fulfil. Complying with these responsibilities may increase your administrative costs.
For details on your responsibilities, you may refer to our webpage on Responsibilities of GST-Registered Businesses.
B. Profile of your suppliers
You may benefit from GST registration when your suppliers are GST-registered or you import goods and pay import GST to Singapore Customs. This is because you will generally be able to claim the GST paid, subject to the conditions for claiming input tax.
However, when your suppliers are not GST-registered, there will be no GST to be claimed on your purchases, as your suppliers should not be charging GST.
Examples 1 and 2 below illustrate the possible impact on your gross profit after GST registration, based on the GST registration status of your supplier.
Example 1: Supplier is GST-registered
| Before you are GST registered | After you are GST registered | |
|---|---|---|
Purchase price from supplier | $109 ($100 + $9 (GST)) | $109 ($100 + $9 (GST)) |
Sales price to customer | $200 | $218 ($200 + $18 (GST)) |
GST (payable to IRAS or claimable from IRAS) | $0 | Payable $9 GST ($18 - $9) |
Your gross profit (sales price - purchase price - GST pay to IRAS) | $91 ($200 - $109 - $0) | $100 ($218 - $109 - $9) |
Example 2: Supplier is not GST-registered
| Before you are GST registered | After you are GST registered | |
|---|---|---|
| Purchase price from supplier | $100 | $100 (no GST) |
| Sales price to customer | $200 | $218 ($200 + $18 (GST)) |
GST (payable to IRAS or claimable from IRAS) | $0 | Payable $18 GST ($18 - $0) |
Your gross profit (sales price - purchase price - GST paid to IRAS) | $100
($200 - $100 - $0) | $100 ($218 - $100 - $18) |
C. Profile of your customers
Once you are GST-registered, you will have to charge and collect GST from your customers.
If your customers are GST-registered, you may be able to increase your selling price to include the GST chargeable, as your customers may be able to claim the GST charged by you.
However, if your customers are not GST-registered, you may find it more difficult to increase your selling price to include the GST chargeable, as your customers will not be able to claim the GST that you charge. Hence, there may be a need for you to absorb the GST.
Example 3 illustrates the impact on your gross profit after GST registration, if you have to maintain your selling price to remain competitive.
Example 3: Your customer is not GST-registered
Your customer is not GST-registered. Assuming that your sale price is fixed (e.g. due to market competition), registering for GST results in a reduction in gross profit.
| Before GST registration | After GST registration | |
|---|---|---|---|
| Increase sales price | Maintain sales price | ||
Purchase price from supplier | $100 (no GST) | $100 (no GST) | $100 (no GST) |
Sales price to customer | $200 (no GST) | $218 (GST $18 (9% x $200)) | $200 (GST $16.51 (9/109 x $200)) |
GST (payable to IRAS or claimable from IRAS) | $0 | Payable $18 GST | Payable $16.51 GST |
Gross profit (Sale price - Purchase price - GST paid to IRAS) | $100 | $100 ($218 - $100 - $18) | $83.49 ($200 - $100 - $16.51) |
D. Type of sales made by you
When you export goods or provide services to overseas customers, you may zero-rate your supplies (i.e. charge GST at 0%), provided that the supplies qualify for zero-rating.
Since the supplies are zero-rated, there will be no impact on your selling price after GST registration.
You may benefit from GST registration because you may be able to claim the GST incurred on your purchases. Example 4 illustrates how your gross profit will be higher after GST registration if you make only zero-rated supplies.
To check whether your supplies may be zero-rated, please refer to:
Example 4: Zero-rated supplies
| Before you are GST registered | After you are GST registered | |
|---|---|---|
Sale price of goods | $200 | $200 |
Purchase price of goods | $109 (cannot claim GST) | $109 (inclusive of GST $9) |
GST paid to/ claimed from IRAS (GST charged on sale - GST incurred on purchase) | $0 | Claimed $9 |
Gross profit (Sale price - Purchase price + GST claimed from IRAS) | $91 | $100 |