GST, also known as VAT, was introduced in Singapore on 1 April 1994 at the rate of 3%. This has progressively increased and currently it is at 8%. With effect from 1 January 2024, this will be increased to 9%. Only GST registered businesses can charge GST.
GST can be broadly classified into two categories:
– Taxable supply
- Standard-rated supply
- Zero-rated supply
– Non-taxable supply
- Exempt supply
- Out-of-scope supply
Standard-rated supply is when GST is charged at the prevailing rate by GST-registered businesses on all sales of goods and services made in Singapore.
Zero-rated supply relates to export of goods and the provision of international services where GST is charged at 0%.
Exempt supply includes the provision of financial services, sale and lease of residential properties and local supply of investment precious metals. No GST is charged on exempt supplies.
Out-of-scope supplies include supplies where the place of the supply is outside of Singapore. No GST is charged. Examples of out-of-scope supplies include:
- Sales of goods delivered from a place outside of Singapore to another place outside of Singapore
- Sales of overseas goods within a Free Trade Zone (FTZ)
- Sales of overseas goods within Zero GST/Licensed warehouse
- Private transactions
Compulsory GST registration is required under the following conditions:
- Under the retrospective view, the taxable turnover is more than SGD1 million at the end of the calendar year, or
- Under the prospective view, the taxable turnover is expected to be more than SGD1 million in the next twelve months
Taxable turnover refers to the total value of all taxable supplies made in Singapore, which includes standard-rated supplies and zero-rated supplies. Taxable turnover does not include exempt supplies, out-of-scope supplies and sale of capital assets.
At Sheltons Accountants Singapore we have extensive experience in providing Singaporean and international tax advice. This includes advice not only on GST but also on tax treaty issues and cross-border tax efficient structuring.
If you need advice or assistance with your Singaporean tax obligations, we’re here to help.
Simply send us an email at SG@SheltonsGroup.com.