Entrepreneurs opt to put up their businesses in Singapore due to the straightforwardness of registering a company in the country. One more basis that Singapore is prime selection for business investors is that Singapore provides enticing incentives and tax exemptions for multinational companies who wish to invest in the country.
The Singapore government collects different types of taxes. There are tax impositions on individual and corporate incomes, properties, estate dues, motor vehicles, customs and excise dues, betting, stamp dues, foreign worker levies, airport passenger service charges, and goods and services.
An overview of the GST collected by Singapore is provided in this article.
Goods and services tax is the tax levied by the Singapore government for goods and services bought or availed of in the country of Singapore. Other jurisdictions have a similar tax collected from goods and services, and it is known as the Value Added Tax.
Being implemented in April of 1994, the goods and services tax is a rather new tax imposition in Singapore. Currently, Singapore’s goods and services tax is at 7%, and the Inland Revenue Authority of Singapore is the agency that manages, enforces and collects goods and services tax.
Goods and services tax is classified as an indirect tax. It is collected each time a person purchases goods or avails of services, and is not collected from people’s incomes.
Companies in Singapore are advised to be personally responsible for evaluating if their businesses are eligible to charge customers GST. The Inland Revenue Authority of Singapore has two categories available of registration process for companies registering for goods and services tax.
Some corporations will have to abide by the compulsory registration. If a corporation has an income of more than SG$1 million in a single year – or has already earned more than a million Singapore dollars in less than 1 year (called the prospective basis) – it is compelled by The Inland Revenue Authority of Singapore to register for goods and services tax. Eligible companies that fail to register for goods and services tax will be penalised by the Inland Revenue Authority of Singapore.
Some corporations will voluntarily register their businesses for GST. A company that doesn’t have an income of more than SG$ 1 million within a single year or in a prospective basis may register for goods and services tax as well. One advantage that corporations acquire in registering for GST is that they can claim input tax obtained in their business operations.
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