A Foreign Founder's Guide to Singapore's GST

Goods and Services Tax (GST) is a broad-based consumption tax levied on the import of goods, as well as nearly all supplies of goods and services in Singapore. In other countries, GST is also known as Value-Added Tax (VAT). The current GST rate in Singapore is 9%.

GST registration is not required for all businesses. There are two scenarios for registration:

Compulsory Registration:

You must register for GST if:

• Your taxable turnover for the past 12 months was more than S$1 million (retrospective basis).
• You reasonably expect your taxable turnover to exceed S$1 million in the next 12 months (prospective basis).

Voluntary Registration:

You may choose to register for GST voluntarily even if your turnover is below S$1 million. This can be beneficial if your business primarily serves GST-registered businesses, as you can claim back the GST you pay on your business purchases (input tax).

Once your business is GST-registered, you must charge 9% GST on all standard-rated supplies to your customers in Singapore. This collected GST is known as "output tax."

Simultaneously, you can claim back the GST incurred on your business purchases and expenses. This is known as "input tax." On a quarterly basis, you will file a GST return and pay the net difference (Output Tax - Input Tax) to the Inland Revenue Authority of Singapore (IRAS).