What Companies Need To Know About The Goods And Services Tax Policy Of Singapore

By Aaron Smith

Entrepreneurs opt to establish their operations in Singapore because of the ease of registering a company in the city-state. One more basis that Singapore is top selection for entrepreneurs is that the country offers attractive incentives and tax exemptions for foreign corporations who wish to invest in the city-state.

The Singapore government levies different types of taxes. Goods and services, owning and operating motorized vehicles, individual earnings, company earnings, real estate, legal gambling, stamp dues, and immigrant levies are a number of the taxes that the Singapore imposes on its citizens.

This article will provide an overview of the Singapore GST policy.

Goods and services tax is the tax that is levied on the costs of goods and/or services acquired in Singapore.|Goods and services tax is the tax collected by the Singapore government for goods and services bought or availed of in the The goods and services tax collected by the Singapore government refers to the tax placed on goods and services availed of or bought within the boundaries and jurisdiction of the Palm Bay The Value Added Tax (VAT) familiar to other countries is another name for Singapore's goods and services tax.

The goods and services tax is rather new in the city-state's taxation scheme, having been implemented only in April 1994. Currently, Singapore's goods and services tax is at seven%, and the IRAS is the governing agency that administers, implements and collects goods and services tax.

Goods and services tax is categorized as an indirect tax. It is levied on the expenditure rather than the earnings of individuals.

A company operating in Singapore is required to continually appraise if it is eligible to register for goods and services tax. The IRAS has 2 categories available of registration methods for companies registering for goods and services tax.

The first type of registration is compulsory. Companies that have earnings of more than a million Singapore dollars within a year or in less than a year (prospective basis) have to to register for goods and services tax. Failure of registration for goods and services tax by eligible corporations will be subject to penalty by the Inland Revenue Authority of Singapore.

The second type of registration is voluntary. A company that doesn't earn over SGD 1 million within 1 year or in a prospective basis may also register for goods and services tax. The advantage of being able to claim input tax acquired from business operations is one incentive for some companies to register for GST.

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