Goods and Services Tax or GST is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. In other countries, GST is known as the Value-Added Tax or VAT.
GST exemptions apply to the provision of most financial services, the supply of digital payment tokens, the sale and lease of residential properties, and the importation and local supply of investment precious metals. Goods that are exported and international services are zero-rated.
Taxable and non-taxable goods and services
The table below lists the categories and types of taxable and non-taxable supplies.
Taxable supplies
| Goods | Most local sales fall under this category. E.g. sale of TV set in a Singapore retail shop Sale of imported low-value goods (from 1 Jan 2023) E.g. Sale of tennis racquet by overseas online merchant to customer in Singapore at $330, excluding freight and insurance | Export of goods E.g. sale of laptop to an overseas customer, where the laptop is shipped to an overseas address |
| Services | Most local provision of services fall under this category. E.g. provision of spa services to a customer in Singapore
E.g. Procurement of marketing services from overseas service provider | Services that are classified as international services E.g. air ticket from Singapore to Thailand (international transportation service) |
Non-Taxable supplies
| Goods | Sale and rental of unfurnished residential property Importation and local supply of investment precious metals | Sale where goods are delivered from overseas to another place overseas Private transactions See Out-of-scope supplies for more information. |
| Services | Financial services Digital payment tokens (from 1 Jan 2020) | Private transactions. See Out-of-scope supplies for more information. |
Businesses required to register for GST
If your business taxable turnover does not exceed $1 million, you may still choose to voluntarily register for GST after careful consideration.
Charging and claiming GST
Only GST-registered businesses can charge and claim GST from their effective date of GST registration. Non-GST registered businesses are not allowed to charge or claim GST.
Charging GST
If you are registered for GST, you must charge GST on all taxable supplies at the prevailing GST rate, except for supplies that are subject to customer accounting. The GST that you charge and collect is known as output tax. Output tax must be paid to IRAS within a month from the end of the accounting period. Refer to our page on filing and payment due dates for more information.
If you have wrongfully charged or collected GST, you must remit the GST wrongly collected to IRAS.
Exception
Claiming GST
If you are registered for GST, you can claim the GST incurred on business purchases (including imports) and expenses, as input tax in your GST return. This is subject to you fulfilling the conditions for claiming input tax.
Exception
There are exceptions where non-GST registered businesses in specific industries are given concessions (subject to conditions) by the Minister to claim the GST incurred. These exceptions are:
- Qualifying funds that are managed by a prescribed fund manager in Singapore can claim GST incurred on prescribed expenses at an annual fixed recovery rate via remission.
Details of the GST remission (such as the types of qualifying funds, qualifying conditions, prescribed list of expenses and procedures to claim GST) are explained in the circular issued by the Monetary Authority of Singapore (MAS).
- Real Estate Investment Trusts and Qualifying Registered Business Trusts listed on the Singapore Exchange (i.e. S-REITs and qualifying S-RBTs) can claim GST on expenses incurred for their business and their Special Purpose Vehicles (SPVs).
This GST concession applies regardless whether the S-REIT or S-RBT is eligible for GST registration.For details, please refer to GST: Concession for REITS and Qualifying Registered Business Trusts Listed in Singapore (PDF, 962KB)
To claim the GST incurred, qualifying funds, S-REITs and S-RBTs need to submit a quarterly Statement of Claims to IRAS within one month from the end of the respective quarters.
As an administrative concession, funds and trusts may file their quarterly Statement of Claims after the due date, subject to the following conditions:
- The GST claims are made on tax invoices dated within the relevant quarter; and
- The quarterly Statements of Claims are filed within 5 years from the end of the relevant quarter.
For example:
Period of claims: 1 Apr 2017 to 30 Jun 2017
Qualifying funds, S-REITs and S-RBTs can submit the Statement of Claims latest by 30 Jun 2022.
Additionally, you may be able to claim GST incurred before GST registration or incorporation, provided that you fulfil certain conditions. For more information, please refer to our page on claiming GST incurred before GST registration/ incorporation.
This input tax credit mechanism ensures the taxation of only the value-add at each stage of a supply chain.
Example 1: How a business charges output tax and claims input tax
A GST-registered manufacturer imports leather from overseas to manufacture a
bag. The manufacturer sells the bag to a GST-registered retailer. Thereafter, the retailer sells the bag to a consumer.
| 1. Manufacturer | Pays GST to Singapore Customs for the import of leather Import value = $100 Import GST paid = 7% X $100 = $7 (input tax claimable from IRAS) Charges and collects GST for sale of bags to retailer Selling price to retailer = $200 GST charged to retailer = 7% X $200 = $14 (output tax payable to IRAS) |
| 2. Retailer | Pays GST to Manufacturer Purchase value = $200 GST paid = 7% X $200=$14 (input tax claimable from IRAS) Charges and collects GST for sale of bags to end consumer Selling price to end consumer = $300 GST charged to end consumer = 7% X $300 = $21 (output tax payable to IRAS) |
| 3. End consumer | Pays GST to Retailer |
Paying output tax and claiming input tax
If you are a GST-registered business:
- You must submit your GST return to IRAS within a month from the end of each prescribed accounting period. This is usually done on a quarterly basis.
- You should report both your output tax and input tax in your GST return.
- The difference between output tax and input tax is the net GST that is payable to IRAS or refundable by IRAS.
FAQs
Why must Singapore implement GST?
GST was introduced in 1 Apr 1994 to enable Singapore to shift its reliance from direct taxes to indirect taxes. GST has also enabled Singapore to sustain a lower income tax rate. Being a tax on consumption, and not income, GST inherently encourages savings and investments.