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Considering that it is fairly uncomplicated to register a business venture in Singapore, many companies pick out Singapore as their hub of operations in Asia. One more motivator for business investors is the taxation system of the country, which provides attractive incentives and tax exclusions to business enterprises.

There are a variety of tax levies collected by the Singapore government. For example, there are taxes collected on personal and corporate earnings, real properties, estates, motorized vehicles, customs and excise, betting and legal gambling, stamp dues, immigrant worker levies, service charge on airport passengers, and good and services.

This article’s discussion will focus on the GST collected by the Singapore government.

Goods and services tax is the tax that is levied on the costs of goods and/or services availed in Singapore. In other countries, the GST is called Value Added Tax (VAT).

Having been first implemented in April of 1994, the goods and services tax is a fairly new tax levy in the city-state. At present, Singapore’s goods and services tax is at 7%, and the Inland Revenue Authority of Singapore is the agency that manages, implements and collects goods and services tax.

Goods and services tax is classified as an indirect taxation. It is imposed each time a person purchases something or avails of services, and is not collected from personal incomes.

A company operating in Singapore is advised to constantly appraise if it is qualified to register for goods and services tax. Basically, there are two categories of GST registration.

The first type of registration is compulsory. Companies that have incomes of more than SG$1 million within a single year or in less than a year (prospective basis) have to to register for GST. Failure of registration for GST by eligible companies will be subject to penalty by the IRAS.

The 2nd type of registration is voluntary. A company that doesn’t earn more than a million Singapore dollars within a year or in a prospective basis may also register for GST. The benefit of registering a business for GST is that the company can claim input tax acquired in business operations. – 35634

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