Who should register for Singapore 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 (collected by IRAS). In some countries, GST is known as the Value Added Tax (VAT).

Singapore government plans to raise GST by two percentage points, from 7 per cent to 9 per cent, some time in the period from 2021 to 2025, said Finance Minister Heng Swee Keat in his Monday Budget speech.

So today we are going to refresh the topic of Singapore GST registration, focusing on compulsory registration.

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 any of the following happened:

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 million. New requirement!

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.

3. 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

Here's the IRAS Calculator to help determine whether Singapore GST registration is a must for your business. GST Registration Calculator

Computing Your Business Turnover

Below we explain 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

Combine (please take note, 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.)

Here is an example for illustration.

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.

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.

Partnership

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

Please refer to example below for illustration.

Here is an example for illustration.

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

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

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.

Company

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

Here is an example for illustration.

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:

The turnover of Company F exceeds $1 million.

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.

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 .