What is GST?
GST stands for Goods and Service Tax. It is the equivalent of Value Added Tax (VAT) that is levied in some countries. GST is a broad-based consumption tax collected on all supplies of goods and services made in Singapore as well as goods and services imported into Singapore. The liability to register for GST arises based on the value of the taxable turnover that the business generated from the supply of goods and services.
A business must be registered for GST if its turnover from taxable supplies had exceeded S$1 million in the past 12 months or is likely to exceed S$1 million in the next 12 months. The former is known as a retrospective liability to register, and the latter is a prospective liability.
What is a Taxable Turnover?
In the case of a Sole Proprietor, taxable turnover is the combined revenue, fees and income the proprietor earns from business, self-employment, profession or vocation, rental of commercial properties, furniture and fittings. In the case of Limited Liability Partnerships, it includes the turnover of all partnership businesses with the same composition of partners and rental of commercial properties, furniture, and fittings. In the case of a company, the turnover of that particular company, and if the company owns any sole-proprietorship, then the turnover of all such sole-proprietorship must be included in taxable turnover.
It must be noted that standard-rated (7% GST) and zero-rated (0% GST) supplies are part of the taxable turnover; exempt supplies and transactions that are out-of-scope are not part of taxable turnover. Export of goods from Singapore and international Services as described in Section 21(3) of the GST Act are Zero-rated; sale and lease of bare residential property and most financial services are exempted; third-country sales of goods that do not enter Singapore (goods in transit) and dividend income are out-of-scope supplies.
Read more about Singapore GST at Rikvin.com.
