This guide outlines the main concepts of Singapore Goods and Services Tax (GST) system related to Singapore companies-the definition of GST, registration requirements, advantages and disadvantages of GST registration, submission of GST return forms and plans to help enterprises.

Singapore began to implement the goods and services tax on April 1, 1994. The GST Act is based on the UK VAT Act and the New Zealand GST Act. The Inland Revenue Service of Singapore (IRAS) is an agency in Singapore, which is responsible for the management, assessment, collection and payment of consumption tax. Levying goods and services tax is regarded as a strategy to reduce personal and corporate income tax rates while maintaining stable income. Consumption tax is an indirect tax because it will tax expenditure. The current GST rate is 7%.

1. What are the consumption taxes?

goods and services tax (GST), also known as value-added tax (VAT) in many other countries/regions, is a consumption tax levied on goods and services provided in Singapore and goods imported into Singapore. GST is an indirect tax, which is expressed as a percentage of the selling price of goods and services provided by registered commercial entities of Singapore GST (currently 7%).

consumption tax is charged to the end user, so it usually does not become a company expense. The enterprise only acts as a collection agent on behalf of the Singapore tax authorities.

second, what does the consumption tax mean to Singapore companies?

if you are a registered goods and services tax company, you need to collect goods and services tax from your customers for the goods and services you provide, and then pay the tax collected to the tax authorities. For example, if you charge a customer in Singapore a service fee of S $111, you must invoice the customer S $117 (S $111 service fee plus 7% GST). Thereafter, the goods and services tax (GST) amount collected from the customer on behalf of the tax authorities must be paid to the Singapore tax authorities through the quarterly GST tax return. Companies registered in Singapore will not take the initiative to register for GST. Companies that meet certain conditions must apply to IRA to become GST registered companies before they can levy and collect GST.

third, does my company need to register consumption tax?

consumption tax is a kind of self-assessment tax, which requires enterprises to constantly assess whether it is necessary to register consumption tax. Consumption tax registration is divided into compulsory registration and voluntary registration.

A, compulsory registration, GST registration is necessary in the following circumstances:

1. In the past 12 months, your business turnover exceeded S $1 million-called retrospective benchmark;

2. You are currently engaged in a sale, and you can reasonably expect that the turnover of your business will exceed S $1 million in the next 12 months, which is the basis of expectation. This includes any agreement/contract you have signed, and your expected income will exceed S $1 million in the next 12 months.

When your income exceeds S $1 million, you need to submit a GST application to IRAS within 31 days. Failure to register your company on IRAS within the specified time will be fined. There are anti-tax avoidance provisions to ensure that the goal of setting up an entity is not only to make the turnover below the threshold, so as to avoid registration.

B, voluntary registration, choose to register GST voluntarily under the following circumstances:

If you are not responsible for compulsory registration, you can also register GST voluntarily, depending on your business operation. Enterprises must plan to sell in Singapore or have already started to sell (taxable terms). Please note that if you voluntarily choose to register for GST, there are other conditions.

after voluntary registration, you must insist on registration for at least two years and abide by GST regulations, submit GST returns on time every quarter, and keep all records for at least five years. Even if your business has terminated, you have been cancelled GST. You may also have to comply with any other conditions stipulated by the tax.

if you only provide products with zero tax rate in exemption registration:, you can apply for exemption registration even if your taxable turnover exceeds the registration limit. This allows you to avoid the management requirements of GST registration and subsequent quarterly GST declaration. If more than 91% of your taxable income is zero tax rate, and the input tax is greater than the output tax, the IRA will agree to be tax-free.

In deregistration: When your business stops or your whole business is sold to others, or when your sales do not exceed one million yuan, you can cancel your registration. You must submit the application form and other relevant documents to the tax authorities within 31 days from the date of stopping the transaction.

4. Do Singapore companies need to levy consumption tax?

you can't. Only when the company's annual turnover exceeds S $1 million or you have applied to become a GST registered company of IRAS, your company needs to register GST and collect GST.

5. can this Singapore company offset the goods and services tax charged by its provider when paying the goods and services tax charged by its customers?

yes. GST collected by corporate customers is called output tax, while GST paid by companies to providers is called input tax. You pay taxes.

what you pay (or claim back from the tax) is the difference between your output tax and your input tax.

6. If a Singapore company is not registered for GST, can it levy GST?

no. Merchants who are not registered with GST may not charge GST. If you are not a GST registered enterprise, it is illegal to collect and collect GST.

7. Is it necessary for Singapore companies to charge GST when exporting goods or services from Singapore?

no. Export goods and services are called zero-tax-rate goods, and GST tax is not levied.

8. If the company is not required to register, is there any advantage in registering the goods and services tax?

it depends, if you need to register GST, you have no choice. However, otherwise, you should consider the following advantages and disadvantages of GST registration:

Advantages:

For me:

1. In both good and weak economic environment, it can generate stable and predictable tax revenue.

2. It is an effective tax because of its lower management and collection costs.

3. It allows the reduction of corporate and personal income tax, thus encouraging more foreign direct investment. This has led to an increase in the overall economy.

For enterprises and individuals:

1. Most large and established enterprises have registered GST-obtaining GST registration of your enterprise usually sends a signal to customers that your enterprise has been established and has a certain scope.

2. Consumption tax is a fairly taxation system. It only taxes self-employed and migrant workers when they pay.

3. Consumption tax is only applicable to consumption. Savings and investments are not taxed. This will encourage people to be frugal and invest in productive activities.

4. the cost of doing business is reduced, which helps to reduce the price. Because the real taxpayer is the end user, because of the multi-stage reputation mechanism, enterprises do not have to bear the tax cost.

Disadvantages:

1. The disadvantage of goods and services tax registration is the administrative burden brought by the duty of implementing goods and services tax registration.

2. It is necessary to study the complexity of goods and services tax or hire an accountant to do this work, which may be a fairly high fee in some cases.

3. effectively registering consumption tax can increase your selling price by 7%. Customers who have not registered GST will not be able to recover the GST you charged. Therefore, although the cost is reduced because GST can be recovered, your customers may not be satisfied.

4. Consumption tax may become a burden to low-income people, especially in the era of high inflation, when the price of daily necessities rises, 7% tax will be paid.

9. which goods and services are subject to GST?

consumption tax is charged on dutiable articles, and taxable provision refers to the provision of goods or services made in Singapore, except duty-free provision. Taxable provision can be standard rating (currently 7%) or zero rating provision.

In Singapore, most local goods are sold and local services are provided in standard grades. The goods and services are subject to zero-rate goods and services tax of 1%. It is important to export goods and provide international services with zero-rate goods. GST registered entities with zero consumption tax can request to pay input tax on purchased goods.

consumption tax does not include duty-free goods, which are divided into two categories: sales, leasing and financial services of residential land, and the input tax incurred in providing duty-free goods cannot be claimed.

the provision beyond the scale refers to the provision beyond the scale of GST Act. Usually, they are:

1. Transfer of continuous business;

2. Private transactions;

3. sale in a third country–refers to the sale of goods from a place outside Singapore to another place outside Singapore;

4. Sale in the warehouse with zero consumption tax;

11. What are the GST registration procedures?

Singapore goods and services registration form and necessary supporting documents must be sent to tax. If it is a partnership, an additional form must be filled in, which provides the details of all partners. There are separate application processes/forms for overseas companies, group registration and department registration. It is expected that the overseas registrant will appoint a local agent who will act on behalf of the agent and must attach a letter explaining the letter to the application form.

The registration process takes about 3 weeks. After successful GST registration, you will receive a GST registration notice. This letter will include your goods and services tax (GST) number, the effective date of your enterprise becoming a GST registered enterprise, the frequency and deadline of application and any other special instructions. You must submit the goods and services tax return electronically.

Xi. How to pay, collect and implement consumption tax?

1. As a registered entity of Goods and Services Tax (GST), you are obliged to collect GST for the provision of goods and services, and remit the GST collected to IRAS. GIRO payment control is preferred through Singapore bank account.

2. You can charge GST above the selling price, or you can treat the price as GST (including GST) to receive GST.

3. As a registered trader of GST, you must display and quote the price including GST on all the prices displayed, advertised, published and quoted orally or in writing. Not showing the price including consumption tax to the public is illegal and will be punished. However, for food and services (catering industry) that require additional service charge, the price shown may not include GST.

4. When billing a customer, if the customer is a GST registered entity, it is necessary to issue a tax invoice, so that the latter can be used as a supporting document to claim input tax for the purchase at the standard tax rate, which includes information about the goods sold and the corresponding GST charges, and can be used to exchange ordinary invoices. Tax invoices must be kept for at least five years as part of your business records. Please note that it is not necessary to submit the tax invoice together with the goods and services tax declaration. Usually, it should be sent within 31 days after delivery. Customers with zero tax rate, tax exemption and regarded as providing or non-GST registration need not issue tax invoices.

5. after paying you, if you don't issue a tax invoice or a simplified tax invoice, you must issue a serial printed receipt to the payer.

6. You must keep all business transaction records that affect the GST statement. In addition, opening a GST account (a summary of the total amount of input tax and output tax in each accounting period) will help you to successfully declare GST.

7. You should file an input tax claim in the accounting period according to the date of the tax invoice or import license.

XII. How to declare GST tax refund?

as a registered entity of goods and services tax, you need to submit a tax return (GSTF5) to the tax according to the accounting cycle (usually quarterly). In your tax return, you will indicate the local sales, exports and purchases you made in the GST registered entity during the accounting period, the total value of GST collected and GST claimed. Now, GST returns are filed electronically. Once you start filing GSTF5 electronically, the next GST return will be provided online at the end of each accounting period. You can archive GSTF5 electronically after the accounting period stops. You must ensure that IRAS receives your return no later than one month after the specified accounting period stops. If there is no tax payable within the above period, you must still submit a "zero" return. If you pay GST late, you will be fined, regardless of whether the declared net GST is perfunctory or refundable.

you must pay the net GST within 1 months after the end of the specified accounting period. You will be fined if you pay GST late. Consumption tax refund will usually be refunded within 31 days from the date of receipt of the return.

XIII. Are there any goods and services tax schemes that can help enterprises?

Singapore has launched several support schemes related to goods and services tax, which usually help to ease the cash flow of enterprises and create a favorable environment for enterprises.

1. tourist tax refund scheme–tourists who buy goods from registered retailers that have joined the GST in Singapore are allowed to ask for a refund of the GST that has been taken out of Singapore.

2. Cash accounting plan–specifically for small enterprises with annual sales of not more than S $1 million.

3. Gross profit margin plan–-GST is only charged according to the gross profit margin of goods.

4. Important Exporter Program (MES)–designed to help the cash flow of important exporters with a large number of imported goods.

5. Manual export plan–If you want to return the price of goods provided to overseas customers to zero, and your goods are manually shipped out of Singapore through Changi International Airport.

6. Zero consumption tax warehouse plan–enterprises can change their warehouses into zero consumption tax warehouses to reduce red tape and bypass the process of goods and services tax.

7. Discount sale price plan–enables you to charge 51% consumption tax on second-hand/used cars.

8. Import Goods and Services Tax Deferred Payment Scheme (IGDS)–allows you to pay goods and services tax on imported goods when the monthly GST return is due, instead of at the time of import.

9. Other industry-specific plans–various goods and services tax plans have also been formulated for different industries such as shipping and logistics.

if you want to know more about Singapore tax, please contact a consultant, and a professional one-on-one business manager will give you detailed answers immediately.

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Shenzhen registered company ... agent bookkeeping newspaper ... Hong Kong company note ... Qianhai company note ... agent registrar ... overseas company note ... business start-up subsidy information general taxpayer ... financial knowledge and tax knowledge

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