Important Things Every Business Owners Must Know About GST
Do you own a business in Singapore? Then, perhaps you have already heard about GST (Goods and Service Tax). This is a relatively new type of tax and it is similar to Value Added Tax (VAT) in other nations. Implemented from the 1st of April 1994, Goods and Service Tax has been formed, based on the New Zealand Goods and Service Tax legislation and the UK VAT legislation. This tax is operated by the Inland Revenue Authority of Singapore (IRAS) that operates as an agent of the Government of Singapore.
What is Goods and Service Tax?
According to the GST Act, this tax is mainly applied on the supply of goods and services made by a businesses or organizations. The current rate of this tax in Singapore is 7 percent. If your business annual turnover reaches or exceeds S$1m with the sale of taxable goods and services, then it becomes compulsory for you to register to collect GST. Apart from that, if you are presently making sales and you are expecting that it will reach or exceed 1 million SGD annually, then also you need to register for this tax.
Remember, if you do not register for this tax, you may face penalties in the long run. There are strict rules for businesses who do not register for this tax, mainly to show their turnover is less than the actual amount. So, if you do not want to get into such hassles, you must register if you are eligible for it.
Who can register for Goods and Service tax?
You are eligible to register if you are one of the following:
- Sole proprietorships
- Business partnerships
- Business or company owners
- Organizations, associations, clubs, or management corporations
- Non-profit organizations
- Government bodies
Why you need to register?
- Business owners or organizations register for goods and service tax mainly to claim back the GST that was incurred on their business purchases.
- If the amount of tax exceeds the amount of tax collected, then you can claim it back from IRAS as a GST refund.
- When the rate of goods and service tax increase, you may need to register your business voluntarily to collect GST to claim back the tax that was incurred on your business purchases.
If you are confused about the total process of GST Singapore, then you must get in touch with professionals like accredited tax practitioners providing value-added services to new or established businesses and organizations at affordable prices.
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