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What are the Responsibilities of a GST-Registered Company in Singapore?
Posted: Apr 25, 2017
"Do I need to register for GST in Singapore?" This question often swirls in the mind of every business owner when it comes to GST registration Singapore. Many businesses often end up facing severe penalties for not complying with the law. More often than not, it happens due to their lack of knowledge about GST Singapore. Since it is a self-assessing tax, one should be well aware of the process to determine the liability for the registration of Goods & Services Tax (GST). Essentially, there are two methods upon which one can determine their compliance towards GST registration- Retrospective view and Prospective view.
Before diving a little deeper into the methods, let us discuss in brief details about GST Singapore.
What is GST Singapore?
GST, an acronym to Goods and Services Tax, is a consumption tax that is levied on the supply of goods and services. It is an indirect tax applied to the selling of goods and services provided by a GST-registered business. GST is also known as VAT (Value Added Tax) in many other jurisdictions. The current rate of Singapore GST is 7%, which is considered to be one of the lowest rates in the world.
Technically, an end consumer is the one who pays the GST tax amount indirectly to the tax authority, and the GST-registered business merely acts as a collecting agent for the government.
There are two types of GST registration in Singapore: 1) Compulsory Registration and 2) Voluntary Registration.
Being a GST-registered business, you are responsible for collecting GST tax from the end consumers of the goods and services offered by you and then pay the collected tax to the tax authority, i.e., IRAS (Inland Revenue Authority Singapore). As per the law, you must invoice 7% GST amount to your customer along with the cost of services/products. For e.g. If the cost of your services or product is $100, you must add $7 (7% GST) to the final bill. The total cost would be $107. You are then liable to submit the $7 (GST amount) to the authority by GST filing.
GST return must be filed on a quarterly basis. You must pay the net GST within 30 days after the end of your accounting period of the business. Late GST payment may attract penalty fines. To avoid penalties of government, you may hire the assistance of an accounting firm in Singapore. The tax consultant of the firm will assist you all along the way right from GST registration to timely GST filing.
How to Determine the Liability for GST Registration Singapore?
The liability of business for GST registration depends on the value of its annual turnover. Reiterating, you can use two views Retrospective and prospective to the determine the GST registration liability.
There are some serious consequences for late GST registration. So, you are advised to assess the requirement for GST on a timely basis.
About Us:
SBS Consulting Pte Ltd is a Singapore-based firm specializes in accounting, taxation (GST, Corporate tax), company registration services, corporate secretarial, payroll, etc. It houses a team of professionals from diverse fields. The experts have industry-wide experiences in their areas of expertise. A huge clientele base is enjoying the unparalleled services of the firm.
SBS Consulting is one of the leading corporate services provider in Singapore. It specializes in Company Incorporation, Accounting, Preparation of director's report, Taxation, GST, Payroll, XBRL, IT software development and maintenance, etc.