GST Registration – When Should You Register?

Doing business in Singapore comes with a multitude of rules and requirements, one of which pertains to the GST (Goods and Services Tax) registration. The threshold for compulsory GST registration is set at an annual taxable turnover of SGD 1 million. Hence, companies must stay vigilant about their financial obligations and regulatory compliance.

Opting for voluntary registration also presents its own benefits, including the ability to claim input tax credits and enhance market competitiveness. However, understanding when to register for GST, the potential impacts on clients and the business, and the consequence of non-compliance is crucial. 

GST Registration Criteria: Understanding the Basics

GST registration in Singapore is not a blanket requirement for all businesses. Instead, it is contingent upon certain criteria that determine whether your business needs to be registered mandatorily. For some, they consider voluntary registration as an option.

Mandatory GST registration is required for businesses if:

• Your taxable turnover at the end of the calendar year exceeds SGD 1 million (approx US$743k). This includes the sale of goods and services that are deemed taxable under the GST Act.
• You are currently making taxable supplies and expect your taxable turnover in the next 12 months to exceed SGD 1 million based on reasonable forecasts.

Businesses that do not meet these criteria can opt for voluntary GST registration. Although this might seem unnecessary, voluntary registration can provide significant advantages, such as the ability to claim back GST incurred on business expenses.

Example: When Company A imports goods from China valued at S$100,000, they incur an input GST of S$9,000 (9% of S$100,000). If Company A is GST-registered in Singapore, they can reclaim the S$9,000 input GST. However, for non-GST-registered businesses, this S$9,000 cannot be reclaimed, thus becoming part of their cost of goods sold.

The GST Registration Process: A Step-by-Step Guide

The government has streamlined and simplified the process of GST registration in Singapore and designed it to be business-friendly and manageable for both local and foreign businesses. Here’s a detailed guide to navigating the GST registration process:

1. Determine Eligibility: Assess whether your business meets the mandatory registration criteria or if voluntary registration would benefit your business model.
2. Prepare Necessary Documents: Gather all required documents such as details of business activities, financial statements, and particulars of owners/directors. All those required documents are be provided by your accountant or tax agent in Singapore.
3. Submit Application: Applications for GST registration can be submitted online via the IRAS (Inland Revenue Authority of Singapore) website. It typically takes about two to three weeks for the application to be processed.
4. Attend GST E-Learning Course (if applicable): If you have opted for voluntary GST registration, you are required to attend a compulsory IRAS e-Learning course with some exception.

Following these steps will ensure a smooth registration process and set your business up for compliance with Singapore tax laws.

GST Registration Benefits: Why Consider Registering Early?

While the mandatory requirements for GST registration are clear, many businesses benefit from registering before they reach the SGD 1 million threshold. Here are a few reasons why early GST registration can be advantageous:

• GST on Purchases / Input Tax: After you register for GST, you can start claiming GST incurred on your business expenses, which can lead to significant cost savings.
• Cash Flow Management: Enables better financial planning and management of cash flow.
• Enhance Business Credibility: As a GST-registered company, it enhances your business’s image and credibility. Additionally, it shows potential clients that you are a serious and compliant business entity.
• Operational Efficiency Practice: Integrating GST from the outset streamlines accounting processes, allowing businesses to prepare in advance and avoid the chaos of meeting filing deadlines once the threshold is reached.
• Business Growth and Compliance Readiness: Early registration ensures compliance with GST regulations, avoiding penalties for late registration.

GST Registration Compliance: Keeping Up with Regulations

After successfully registering for GST, it is imperative to comply with the ongoing requirements, which include charging GST on taxable supplies and filing regular GST returns. Here are key aspects of compliance that you should be aware of:

• Filing GST Returns: Depending on your turnover, you need to file GST returns quarterly or monthly. It’s crucial to maintain accurate records to support your GST claims.
• Record Keeping: The government require businesses to keep records for five years in case of any future audits by IRAS.
• Staying Updated on Changes: GST rates and regulations can evolve over time. Therefore, it is essential to monitor any GST tax updates, as these changes are vital for maintaining compliance.

Read our article for update for Recent Changes in Singapore’s GST Regulations

By keeping these factors in mind, you can ensure that your business remains compliant with Singapore’s GST Regulation and avoid any potential fines or legal issues.

How Aura Partners Can Assist with Singapore GST Registration

Navigating the complexities of GST registration in Singapore can be challenging. Partnering with an experienced accounting firm like Aura Partners simplify this process for businesses offering comprehensive GST registration services. Our team of experts ensures that your registration is seamless and compliant with all regulatory requirements. Here’s how we can help:

• Expert Guidance on GST Registration: We provide tailored advisory services to determine the most suitable company structure for GST compliance.
• Preparation and Submission of GST Returns: Our team of experts ensures accurate and timely preparation and submission of GST returns. This helps businesses avoid common pitfalls and penalties associated with non-compliance.
• Comprehensive Tax Planning and Advisory: With a deep understanding of Singapore’s tax environment, we offer strategic tax planning to optimise tax liabilities. We make sure that your business benefits from all available tax advantages.
• Support for Both Local and Foreign Businesses: We assist both local enterprises and foreign companies looking to establish a presence in Singapore. Our services are designed to cater to a diverse clientele. Moreover, we help ensure compliance and financial efficiency.

Lastly, by choosing Aura Partners for GST registration and compliance, you ensure that your business meets all regulatory requirements. They also help with your tax responsibilities, ultimately supporting your company’s growth and financial health in Singapore.