In addition to the administrative aspects of having Singapore companies which we discussed in the previous article, it is also necessary to pay attention to their tax obligations in Singapore.
Singapore has Goods and Service Tax (GST). In other countries analogue of GST is VAT (see VAT in Europe). As a general rule, registration for GST purposes is mandatory if the amount of GST taxable transactions of a Singapore company exceeds S$ 1,000,000.
The amount of taxable transactions is the sum of all taxable deliveries made to Singapore company in Singapore (both at the standard GST rate of 7% and at the GST rate of 0%). This does not include transactions that are not subject to GST in Singapore (e.g. shipments outside Singapore, dividend income, etc.). As of January 1, 2019, the Singapore tax authorities – IRAS – have slightly changed the requirements for registering companies for GST purposes.
Before the 1st January 2019 company registration for GST was required if the sum of its taxable transactions over the last 12 months at the end of each calendar quarter exceeded S$ 1 000 000. From 1st of January 2019 registration of GST number for companies is required if the amount of taxable transactions of the company during the last 12 months to the end of the calendar year exceeds S$ 1 000 000.
On the IRAS website, you can use an auxiliary calculator that will help you calculate the amount of taxable transactions to understand whether your company needs to register for GST purposes or not.
The legislation sets a 30-day deadline for registering a company for GST purposes. As of January 1, 2019, this is 30 days from the end date of the calendar year in which the S$ 1,000,000 threshold was exceeded.
In fact, the company’s registration in the GST is carried out within a maximum of 2 months from the end date of the calendar year. For example, if a company’s taxable turnover exceeds S$1,000,000 as of December 31, 2019, it will need to apply for GST registration by January 30, 2020, and the latest effective registration date will be March 1, 2020.
The application for GST registration is submitted online on the myTax Portal. The application can be submitted either by the company itself or by an authorized service provider. The application must be accompanied by the documents from this list, in particular the company’s corporate documents and primary transactions documentation.
Late registration or no such registration for GST purposes is punishable by law. The company may be subject to the fine of S$10,000 and penalties of 10% of the tax due.
