GST Registration in Singapore: A Complete Guide

Do you need to register for GST if your business is in Singapore? What are the advantages of being GST-registered?

Our easy-to-understand guide covers the basics of GST registration, including the S$1 million taxable turnover threshold and the benefits of being a GST-registered business. This will help you make informed choices for your company.

What is the Goods and Services Tax (GST)?

The Goods and Services Tax (GST) in Singapore is a tax on most goods and services, including imports. It helps the government raise money. Businesses in Singapore are important in this system. When they register for GST, they collect the tax for the government and pay it to them. It’s important to understand how to collect, pay, and manage GST transactions effectively.

Who Must Register for GST?

You are required to register for GST if your taxable turnover meets the following criteria:

Retrospective View:
If your taxable turnover exceeds $1 million at the end of the calendar year.

Prospective View:
If you anticipate your taxable turnover will exceed $1 million in the next 12 months.

GST Registration Process in Singapore

The GST registration process in Singapore might look complicated at first, but it’s actually simple once you know the steps. From checking if you're eligible to starting to charge GST, each step has clear guidelines to help you get your business registered properly. Let’s go through each step in detail.

Step 1: Check Eligibility
The first step is to check if you need to register. Businesses must register for GST if their taxable turnover exceeds S$1 million at the end of the year or if they expect it to go over that amount in the next 12 months. Even if you’re not required to register, you can choose to register voluntarily after considering the consequences. Remember, not registering on time can lead to penalties.

Step 2: Register Online
After checking your eligibility, you need to register online at mytax.iras.gov.sg, the official tax portal in Singapore. When registering, businesses may need to provide supporting documents and, in some cases, complete an e-learning course.

These e-learning courses offer important training on GST rules, compliance, and management. They help ensure your business understands the GST requirements in Singapore. While this step may seem a bit strict, it makes sure that all GST-registered businesses are ready for their tax responsibilities.

Step 3: Wait for Approval
Once you submit your GST registration application, you need to wait for the approval letter. The Inland Revenue Authority of Singapore (IRAS) reviews your application, which usually takes about 10 working days, but it can take up to 30 days for some applications. During this time, the Comptroller might ask for more information or documents from your business. So, it’s important to be patient and ready during this step.

Step 4: Get Your Registration Notice
After your GST registration is approved, you’ll receive a notice from IRAS confirming your GST registration number and the effective date. This official GST registration number must be printed on all invoices, credit notes, and receipts.

Remember, businesses cannot charge or collect GST until the official effective date of their registration.

Step 5: Start Charging GST on Goods and Services
The last step in the registration process is to begin charging GST on goods and services from your registration's effective date. In Singapore, output tax is the GST that a registered business charges on its taxable goods and services.

With your official registration number printed on all invoices, credit notes, and receipts, you can now legally collect GST from your customers. Just remember, you cannot charge GST before your official effective date of registration.

GST Registration Documents

For GST registration, businesses need to submit an online application with the required supporting documents to the corporate regulatory authority. This includes the business's ACRA Business Profile or, for overseas businesses, an English Certificate of Incorporation.

If you're registering voluntarily for GST, you also need to include a GIRO application form and the acknowledgment pages from the 'Overview of GST' e-learning course.

How Long Does GST Registration Take?

The GST registration process in Singapore usually takes about 10 working days for most applications. However, some cases may take up to 30 days if more review or documents are needed. Approval for GIRO applications can take up to 3 weeks.

Deadlines and Penalties

Understanding the GST rules in Singapore means knowing important deadlines and possible penalties. Businesses must register for GST and file their returns on time. If you register late or don’t comply, you could face penalties, including a 5% late payment fee and an extra 2% fee each month for GST payments that are more than 60 days late.

Responsibilities of a GST-Registered Business

If your business is GST-registered, you have certain responsibilities to meet. These include filing GST returns, paying GST, and keeping accurate records of business transactions and accounting for at least 5 years.

Let’s take a closer look at these responsibilities.

Filing GST Returns Using the myTax Portal
One important duty of GST-registered businesses is to file GST returns. You need to submit these online through the myTax Portal at mytax.iras.gov.sg. Most businesses must file their GST returns every three months, but you can apply to file them monthly if needed. Keep in mind that even if there are no transactions, you still need to file a 'NIL' return.

Paying GST
Another important responsibility is paying GST. After you submit your GST F5 tax return, you need to pay the amount due within one month. This helps keep the tax system running smoothly and efficiently.

Record-Keeping and Administrative Duties
Finally, GST-registered businesses must keep accurate records of their transactions and accounting for at least 5 years. This includes records of GST collected from customers and GST paid to suppliers or on imports. Good record-keeping is crucial for managing a GST-registered business, helping to ensure transparency and accountability.
GST on Imported Goods
When you import goods into Singapore, you must declare them to Singapore Customs by submitting an Import Declaration form. The GST you pay is based on the CIF (cost, insurance, and freight) value, along with any customs duty that applies. You need to pay the GST at the time of import, and you must pay it before the goods can be released from customs.
Cancelling Your GST Registration
Sometimes, you may need to cancel your GST registration. This could happen if you stop operating, transfer the business, or change the type of business entity. Businesses must cancel their GST registration within 30 days of these changes by submitting the necessary documents. After de-registering, businesses cannot charge GST or issue tax invoices, but they still need to pay GST on imported goods.

Need Help with GST Registration and Compliance?

The GST registration process in Singapore may seem overwhelming at first, but understanding the steps makes it easier. By knowing the requirements, following the process, and recognizing the benefits, businesses can confidently meet their tax duties. From checking if you're eligible, registering online, waiting for approval, getting your GST registration notice, to charging GST and filing returns – each step is important for successful GST registration. Benefits like input tax claims, better credibility, compliance with the law, a competitive edge, and global reach make GST registration a key business achievement.

Contact Clooud Consulting to register your company for GST status, whether it's on a compulsory or voluntary basis. If you're already registered but facing challenges with GST accounting, quarterly filing, or submissions, we're here to assist you. Reach out to us today!

What's the Difference Between ACRA and IRAS?

Singapore is well-known as a top business destination, thanks to its strong economy and attractive tax benefits. Because of this, many business owners and investors see it as a great place to set up a business. If you’re thinking about starting a physical or online business in Singapore, you’ll need to work closely with two main government agencies: the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). A detailed guide to learn more about the difference between ACRA and IRAS and why you need to work with these important things.

What is ACRA and What Does it Do?

ACRA is the authority that regulates public accountants and businesses in Singapore. It is often called the Registrar of Companies because its main role is to manage the lifecycle of businesses. ACRA handles the registration of new companies, monitors existing ones, and ensures proper closure when a business shuts down.

ACRA also oversees financial reporting and supports business operations. If companies don't meet their legal obligations, ACRA can issue penalties or court summons, especially when a business fails to comply with the requirements under the Companies Act.

ACRA's Online Services Platform: BizFile+

BizFile+ is ACRA's online filing portal that allows companies to submit applications and documents. Previously called BizFile, it was launched in 2004 to help businesses upload, access, and manage their data in Singapore. Today, BizFile+ offers over 300 services online.

Having these services readily available makes it much easier to do business in Singapore. Companies can use BizFile+ to send documents to ACRA and find information about other businesses. Here are some services you can access through BizFile+:

Registering companies (LLP, business, local, foreign, and Public Accountant)
Searching for information about registered companies online
Purchasing information about ACRA-registered entities
Uploading documents and filing changes required by ACRA, such as annual reports or updates to a director or company’s information.

What is IRAS and What Does It Do?

IRAS is the government agency in Singapore that is responsible for the regulation of enterprise disbursement schemes and the administration of taxes. Its principal role is to collect tax revenue through an extensive set of varying taxes. Aside from this, the institution also assists the Singapore government in matters related to tax legislation, tax treaties, and economic research with respect to the impact of new and existing taxes on the economy of the country.

Among the primary functions of IRAS is to perform audits and other procedures that are designed to ensure the accuracy of all the tax returns filed by taxpayers (both individuals and business organisations). It also oversees the management of different digital platforms intended to facilitate tax-related procedures in Singapore, including the myTax Portal. Like ACRA, IRAS has the power to impose penalties, specifically for non-payment or late payments of corporate income tax and errors in tax returns.

IRAS' Digital Services Platform: myTax Portal

IRAS provides a range of digital services to simplify tax reporting for individuals and businesses. These platforms connect with other government databases like CorpPass or SingPass to verify user identities and keep records up to date.

The main digital platform is the myTax Portal, which is easy to use and allows individuals and organizations to complete various transactions. Here are some key functions available on myTax Portal:

Filing and paying tax returns
Checking employment income status
Requesting extensions for filing tax returns after the due date
Searching within the IRAS database
Sending secure messages to IRAS
Updating contact information
Viewing account balances and past filings

Read more on the importance of IRAS to your company.

Conclusion

While ACRA and IRAS both work with businesses, they have different roles and responsibilities. ACRA mainly focuses on registering and overseeing businesses in Singapore, whereas IRAS ensures that all businesses pay their taxes correctly. Both agencies are essential for Singapore's economic success.

If you need help with accounting services for small businesses in Singapore to meet ACRA and IRAS requirements, Clooud Consulting is here to assist you! We are a trusted provider of corporate secretarial services, offering everything from business incorporation and secretarial support to accounting and corporate tax filing. Our services can help ensure your business's long-term financial success.

Understanding Taxes and Accounting in Singapore

Singapore is known as a top financial hub due to its organized tax and accounting systems. Businesses benefit from competitive tax rates and international agreements, while also complying with government policies and standards.

Corporate tax Singapore

Your company in Singapore will be taxed on income earned within Singapore, which includes:

- Profits from any trade or business
- Income from investments like interest and rental earnings
- Royalties, premiums, and other profits from property
- Other gains classified as income

Income earned outside Singapore and received in Singapore is generally taxable, unless specific exemptions apply under certain conditions.

Corporate Tax in Singapore: Simplified

Since January 1, 2003, Singapore has operated under a single-tier corporate income tax system. This means that the tax your company pays on its chargeable income is final, and dividends given to shareholders are not taxed further. Currently, Singapore maintains a flat corporate tax rate of 17%.

To uphold its reputation as a leading business destination and remain competitive, Singapore has kept its corporate tax rate steady at 17%.

Depending on your business’s eligibility for tax exemptions, your effective tax rate may be lower than the headline rate. You can also take advantage of industry-specific tax incentives and concessional tax rates available.

Furthermore, Singapore does not impose taxes on capital gains. This includes profits from selling fixed assets and gains from foreign exchange transactions on capital.

Income Tax Basis Period

In Singapore, corporate income tax is assessed based on the preceding year. This means the basis period for any Year of Assessment (YA) corresponds to the financial year ending (FYE) in the year just before the YA.

For instance, in 2024, you would file a corporate tax return for your company’s financial year that ended between January 1, 2023, and December 31, 2023. Your company's accounts should be prepared up to the FYE each year.

Income tax filing due date

Corporate tax filing for Singapore companies is due on November 30th. You need to submit a full set of documents to IRAS, including Form C/Form C-S, audited or unaudited accounts, and tax calculations.

Other taxes

When deciding to incorporate a business in Singapore, one of the most crucial considerations is the type of business structure you select.

Personal income tax

For effective management of employees and compliance in Singapore, it's crucial to understand the personal income tax rules.

From YA 2024 onwards, Singapore tax residents are taxed progressively from 0% to 24% based on their income. If a resident earns SG$20,000 or more annually, they must file a tax return. Those earning less than SG$20,000 annually are exempt from income tax.

Non-residents are taxed at a flat rate of 15% on employment income, or at resident rates if higher, including 24% on other income like directors’ fees.

If your company has five or more employees, joining the Auto-Inclusion Scheme (AIS) is mandatory. This involves submitting employees’ income details to IRAS, simplifying their tax filing process as they only need to verify and submit their tax returns.

Goods and services tax

GST, also known as value added tax (VAT) in other countries, applies a consumption tax to goods, services, and imports in Singapore. GST-registered businesses currently set it at 9%, adding it to the selling price.

Companies in Singapore aren't automatically registered for GST. You need to monitor your taxable turnover. Registration becomes mandatory if your turnover exceeds SG$1 million by the end of the year or if you expect it to exceed this amount in the next 12 months. Voluntary registration is also an option.

After registration, you must e-file your GST return quarterly to IRAS. Even if you have no tax to pay for a period, you must submit a ‘nil’ return. Late filing incurs penalties.

Withholding Tax

Withholding tax is important for non-resident companies in Singapore. A company is non-resident if its management is outside Singapore, including:

- Companies from outside Singapore operating within Singapore
- Singapore offices managed outside Singapore
- Singapore branches of foreign companies

Non-resident companies may face withholding tax on certain incomes like royalties, interest, or fees for technical services. The payer deducts this tax from payments and sends it to IRAS. This ensures that non-resident entities pay taxes on income earned in Singapore.

The withholding tax rate depends on the type of payment and can reduce the net income received by non-resident companies. Singapore has double tax treaties with many countries to avoid double taxation.

Double taxation agreements

As a company expanding internationally, you might worry about paying taxes twice—once in the host country and again in your home country on the same income. Singapore’s network of over 80 double taxation agreements (DTAs) can simplify your tax responsibilities.

What is a double taxation agreement (DTA)?

A DTA is a mutual agreement between two countries aimed at preventing the same income from being taxed twice under their respective national tax laws. Only individuals and entities considered residents under the DTA can benefit from its provisions, which define residency criteria for tax purposes.

Types of income included in double taxation agreements (DTAs)

Income types typically addressed in a DTA encompass:

- Income from real estate
- Shipping and transportation earnings
- Royalties
- Dividends
- Capital gains
- Interest
- Director's fees
- Employment compensation
- Professional fees

If you earn income from a treaty country, you can seek relief under the applicable tax treaty by submitting a Certificate of Residence to prove your Singapore tax residency.

Conversely, if you are a tax resident of a treaty country, you must furnish IRAS with a completed Certificate of Residence, certified by the tax authority of that treaty country.

Accounting standards in Singapore

Once you know your tax obligations, it’s crucial to ensure that your accounting practices follow Singapore’s rules.

In Singapore, accounting standards are called Singapore Financial Reporting Standards (SFRS), aligned with the International Financial Reporting Standards (IFRS). From 1 January 2003 onward, all companies must adhere to these standards.

The SFRS consists of various standards, labeled as Financial Reporting Standard (FRS) X, such as FRS 1. Each standard specifies areas such as the presentation of financial statements, revenue recognition, and inventory accounting. You can find the SFRS on the Institute of Singapore Chartered Accountants (ISCA) website.

SFRS for Small Entities

Eligible entities in Singapore can use the SFRS for Small Entities (SE) as an alternative set of financial reporting rules. It offers a simplified framework for small businesses starting from 1 January 2011.

The aim of SFRS for SE is to reduce the reporting burden for small entities while ensuring their financial statements remain clear, trustworthy, and comparable for investors and other users.

Your business may qualify for SFRS for SE if it:

Is not accountable to the public
Issues general-purpose financial statements for external users
Qualifies as a small entity based on at least three of these criteria:
1. Annual revenue is below SG$10 million
2. Gross assets are below SG$10 million
3. Has fewer than 50 employees

Entities meeting these criteria can use SFRS for SE until they exceed the size limits for two consecutive reporting periods. At that point, they must switch to the full SFRS.

Reach for A Trusted Solution

At Clooud Consulting, we provide a wide array of tax and accounting services to businesses in Singapore. Moreover, we customize our solutions to fit your requirements, whether you're a large multinational or a small startup. Our experienced teams use their global insights and expertise to assist you. This allows you to concentrate on your primary operations, knowing that we have everything else covered. Contact us by visiting our website or email to [email protected].

Understanding IRAS: Its Importance for Your Company

If you pay taxes in Singapore, you deal with the Inland Revenue Authority of Singapore (IRAS). They collect taxes, make tax laws, and help the government with tax matters.
Here's what you should know about IRAS and when you might need to contact them.

WHAT IS IRAS?

IRAS, or the Inland Revenue Authority of Singapore, started in 1947 as the Singapore Income Tax Department. Its main job is to collect taxes from people and businesses. Additionally, it has departments dedicated to investigations, enforcement, and international taxation.IRAS collects about 70% of the government's money, which is used for Singapore's economy and social programs.

RESPONSIBLE OF IRAS:

1. Tax Collection

The IRAS collects various types of taxes, including income tax, goods and services tax, property tax, stamp duty, casino tax and taxes for charities.

2. Tax Advisory

It advises the government on tax matters. Furthermore, it includes helping to make tax policies and laws, as well as creating tax treaties.

KEEPING RECORDS FOR IRAS

IRAS asks companies to maintain accurate records and accounts of their business operations. This involves documenting financial transactions, maintaining accounting records, and storing bank statements.

Using IRAS-approved accounting software is recommended for businesses to ensure their records are well-maintained. Failure to keep proper accounts can result in penalties and fines from enforcement authorities.

UNDERSTANDING TAXATION IN SINGAPORE

Territorial Tax System:

In Singapore, companies are taxed based on their profits, not where they are registered. For example, if a company is registered in Singapore but does most of its business in another country, it may only need to pay tax on the money it makes there.

Low Corporate Income Tax Rates:

Companies in Singapore pay corporate income tax from 0 to 17%. After paying taxes, they can share profits with shareholders through dividends without extra taxes. Moreover, companies also get tax rebates and incentives to lower their tax bills.

Free-Trade Agreements (FTA):

As of 2021, Singapore has made 26 free trade agreements (FTAs). These agreements are meant to remove obstacles to trade and encourage investments among countries. Businesses in Singapore can use these FTAs to get advantages like lower tariffs, quicker access to new markets, and better protection for their inventions and ideas.

CONCLUSION

These are the key points to remember about IRAS. It's important to follow tax rules by understanding them. Tax matters can be intricate, so consider hiring a qualified tax agent like Clooud Consulting for guidance. We're here to assist you with any tax-related inquiries you may have!

Tax Planning in Singapore

Tax planning involves analyzing a company's finances to find ways to reduce taxes efficiently. This is also possible in Singapore, where the government offers incentives, grants, and subsidies to help minimize taxes even further. Our Singapore accountants outline the main tax optimization strategies available in the city-state. We also offer services to help you reduce tax payments within the law.

The primary taxes individuals and businesses need to pay in Singapore.

Individuals and businesses in Singapore are required to pay taxes as per the country's tax laws. They need to file tax returns to determine the amount they owe. Taxpayers can explore tax planning options to claim deductions and exemptions.

Income tax is imposed on personal income for individuals and business profits for companies based on their residency status. Additionally, property tax is another significant tax obligation in Singapore.

Here are some key considerations for tax planning in Singapore:

Tax Authority:
The Inland Revenue Authority of Singapore (IRAS) oversees tax laws in the country. It's essential to understand IRAS rules to ensure compliance and avoid tax evasion.

Tax Rates:
Singapore's tax rates are competitive, with a corporate income tax rate of 17%, one of the lowest globally. Before starting tax planning, understand the applicable rates for different income levels to optimize tax planning strategies.

Tax Reliefs:
Look into tax-saving plans like deductions for employment expenses and charitable donations. Understanding these reliefs can help maximize tax savings for your business.

Objectives in knowing how to do Singapore corporate tax planning

Ensure Economic Strength:

Taxpayer money contributes to the city-state's progress.
Effective corporate tax planning boosts economic growth, benefiting citizens.

Leverage Productivity:

Channel funds from taxable sources to income-generating activities.
Optimize fund usage for productive purposes.

Minimize Litigation:

Avoid tax disputes with local or foreign tax authorities.
Learning corporate tax planning in Singapore can reduce legal conflicts.

Reduce Tax Charges:

Aim to lower tax liabilities by leveraging tax benefits.
Arrange investments to capitalize on incentives provided by tax laws.

What is a Service Charge in Singapore?

In bustling Singapore, figuring out taxes can be confusing, especially when it comes to service charges. If you're running a business or living in Singapore, it's important to understand what service charges are and how they work. In this guide, we'll explain what is a service charge in Singapore and how to apply for Goods and Services Tax (GST) registration. We'll also break down how service charges are calculated in the city-state. Let's dive in!

What is the Service Charge in Singapore?

In Singapore, the service charge, also known as the service fee, is an extra cost added to certain services. It's charged by businesses, especially in the service industry, to cover their service-related expenses. This charge is separate from the Goods and Services Tax (GST), which is a tax on most goods and services in Singapore.

When you eat out or stay at a hotel in Singapore, you might notice that your bill is higher than the advertised price. That's because of two charges: GST and the service charge. GST is 8% of the item's price, while the service charge is usually around 10%. You'll see these charges on your bill at most restaurants and hotels across the island.

In some places, the prices on the menu already include GST, so what you see is what you pay. But in other places, you might see "++" added to the price, which means GST and the service charge are extra. It's good to know about these extra charges so you're not surprised when you get the bill.

These charges help cover the costs of running the restaurant or hotel, like paying staff and keeping things in good shape. The service charge specifically goes towards recognizing and rewarding the staff for their hard work in giving you good service.

Looking ahead, Singapore plans to raise its GST rate to 9% in 2024. This will affect the prices of things, including those with a service charge. So it's a good idea to stay updated on changes like these to plan your spending better.

How to Sign Up for Goods and Services Tax (GST)?

Signing up for Goods and Services Tax (GST) in Singapore is simple and involves two main steps. This guide explains how to register for GST, making sure businesses follow tax rules.

Step 1: Applying for GST Registration
To start the process, you need to apply for GST registration with the Inland Revenue Authority of Singapore (IRAS). You can do this online using the myTax Portal or by filling out a paper application form and sending it to the IRAS address: 55 Newton Road, Revenue House, Singapore 307987.

Remember, you can't charge GST until you receive approval from IRAS. Make sure your GST registration is confirmed before you start collecting GST.

Step 2: Getting the GST Registration Notification
After your GST registration application is approved by IRAS, you'll receive an official notification about when your registration takes effect. This usually comes as a confirmation letter from IRAS and includes important details like:

Your unique GST Registration Number
The date your GST registration starts

Once your GST registration kicks in, you need to start charging and collecting GST on your taxable supplies. This also means you have to file GST returns and send the collected GST to IRAS.

How to Figure Out Service Charge in Singapore

Knowing how to calculate service charge in Singapore is important for anyone eating out or staying in hotels in this lively city. While Goods and Services Tax (GST) is always 8%, service charge is usually 10% of your total bill. Understanding how it's calculated helps you avoid surprises when paying. Here’s a simple guide:

Step 1: Check the Service Charge Rate
Before dining out or booking a hotel, find out the service charge percentage, usually listed on the menu or displayed in the establishment. It’s usually around 10%, but make sure to confirm.

Step 2: Calculate the Service Charge
Multiply the service charge percentage (as a decimal) by the total bill before adding GST. For example, if your bill is SGD 200 before GST and the service charge is 10%, the calculation is:

Service Charge = 0.10 (10% as a decimal) × SGD 200 = SGD 20

Step 3: Add Service Charge to the Bill
Add the calculated service charge amount to your total bill. In this case, your bill would be SGD 220 (SGD 200 + SGD 20 service charge).

Step 4: Apply GST
Calculate GST based on the total bill amount, including the service charge. The current rate is 8%. Using the same example:

GST = 0.08 (8% as a decimal) × SGD 220 = SGD 17.60

Step 5: Calculate Final Bill Amount
Add the GST to the total bill, including the service charge:

Final Bill = SGD 220 (total bill + service charge) + SGD 17.60 (GST) = SGD 237.60

That's the total amount you'll need to pay.

Note: Service charges are not taxed, but GST applies to the entire bill, including service charge and goods or services.

In summary, knowing how to calculate service charges in Singapore helps you make informed choices when dining out or staying at hotels. It gives you a clear idea of your expenses and allows you to value the service you receive. Keep updated on changes like the upcoming GST increase to 9% in 2024 as you explore Singapore's vibrant food scene and hospitality industry.

Calculating GST & Service Charges in SG 2024

How the GST Rate Change Impacts You

In Singapore, when you buy something, you almost always pay more than the stated price due to GST and service charge. These charges, at 8% and 10% of the item's retail price, respectively, are payable when you receive the bill at most restaurants and hotels. As many of us know, commencing from 1 January 2024, Singapore will implement the second tranche of its Goods and Services Tax (GST) hike, transitioning from 8% to 9%. Let's find out more in this post on calculating GST & service charges in SG 2024.

There are scenarios where one or more of the following events straddle 1 Jan 2024:

Issuance of invoice
Payment for the goods or services
Receipt of goods or services

Easy Way to Add GST and Service Charge to Your Bill

No need for complicated calculators! Here’s a super simple way to figure out your bill with extra charges:

GST (9%): Multiply your bill by 1.09.
Service Charge (10%): Multiply your bill by 1.10.
Both GST and Service Charge: Multiply your bill by 1.199.

Here's the example:

Its is easy to calculate Singaporean GST at 9% rate:

1.If $100 is the GST exclusive value

$100 * 0.09 = $9 GST amount.

2. To get the GST inclusive amount, multiply the GST exclusive value by 1.09.

For a $100 GST exclusive value, $100 * 1.09 = $109 GST inclusive amount.

3. To extract the GST part from a GST inclusive amount, divide the GST inclusive amount by 109 and multiply by 9.

If $109 is the GST inclusive value, then ($109/109) * 9 = $9 GST value.

Calculating GST & Service Charges in SG 2024 can be daunting. Here's more on Things you need to know about GST in 2024
Read more: What is GST and how it works!

Understanding Corporate Tax Filing

Who is obligated to file corporate income tax?

Understanding Corporate Tax Filing is important and let's dive deeper into it. The Inland Revenue Authority of Singapore (IRAS) mandates the following entities to file their corporate income tax:

Business entities incorporated or registered under the Companies Act 1967 or any prevailing law in Singapore. Typically, such entities bear the designations 'Pte Ltd' or 'Ltd' as part of their names.

Foreign companies registered in Singapore, including branches of foreign companies.

Foreign companies incorporated or registered outside Singapore.

It is important to note that sole-proprietorship's or partnerships are not classified as companies. Tax obligations for sole-proprietorship's or partnerships are to be fulfilled through individual income tax filings.

How to Determine Your Taxable Income

Companies are taxed based on the income earned in the preceding financial year. For the tax assessment year 2023, income generated in the financial year 2022 will be taxed. Most companies end their financial year on 31 December, but some may choose alternative year-end dates. It's important to inform IRAS if your company's financial year-end differs from 31 December or extends beyond 12 months.

In Singapore, companies are taxed at a standard rate of 17% of their chargeable income, which is the income after deducting tax-allowable expenses. Capital allowances and reliefs may further reduce the taxable income and tax liability.

Tax Filing for Sole-Proprietorships or Partnerships

Sole-proprietors and partnership owners are responsible for filing their taxes as part of their individual income tax. To facilitate this process, they must maintain accurate records and accounts of all business transactions, supported by relevant documents like invoices and receipts.

At the end of the accounting period, owners must compile a statement of accounts, including profit and loss accounts and balance sheets, to ascertain business income and expenses.

Owners typically receive a filing notification or Income Tax Return (Form B or B1 or P) from IRAS by March each year. Upon receipt, they must submit either a 2-line or 4-line Statement for tax filing. The 2-line Statement is for businesses with revenue under S$200,000 for the YA, while the 4-line Statement is for those exceeding this threshold. In the 2-line Statement, businesses declare revenue and adjusted profit/loss, while the 4-line Statement requires additional information such as revenue, gross profit/loss, allowable business expenses, and adjusted profit/loss.

Filing a GST F5 return directly to IRAS using Xero

File your GST F5 return directly with the Inland Revenue Authority of Singapore (IRAS) from Xero.
Any GST owed to IRAS must be paid separately.
Xero transmits the amounts on the GST F5 return to IRAS, excluding the individual transactions.
To file a GST F5 return from Xero, you must have the adviser or standard and view reports user role.
Any GST owed to IRAS must be paid outside of Xero.
If you are due a GST refund, it will be received outside of Xero.

GST Claims for Businesses in Singapore

How to claim GST for business at Singapore

Entrepreneurship can be an exhilarating journey, filled with the excitement of bringing your vision to life and navigating the complexities of business ownership. From conceptualizing your idea to achieving product-market fit and targeting your desired customer segments, every step is a thrilling adventure. However, amidst the hustle and bustle of entrepreneurship, it's crucial not to overlook essential tasks like managing accounting, cash flow, and taxes.

Fortunately, with the assistance of Xero, handling these critical aspects of business management becomes remarkably streamlined and efficient. This allows entrepreneurs to devote more time and energy to realizing their visions and driving their ventures forward. While it may be tempting to overlook accounting and tax-related matters, adhering to Singapore's regulatory frameworks is fundamental to the success and sustainability of any business endeavor. Let's dive to learn more on how to claim GST for business in Singapore.

Exploring the nuances of GST claims accessible to Singaporean businesses

Within the realm of GST, two primary components dictate financial transactions:

Input Tax:
This refers to the GST paid for business-related purposes on invoices issued by GST-registered entities for goods and services procured from suppliers, contractors, and business associates.

Output Tax:
Conversely, Output Tax pertains to the GST charged or collected for business purposes, acting as a representative of the government for GST-registered entities when selling goods or services.

Duration for GST Claims & Filing?

When it comes to Singapore GST claims, understanding the time frame is crucial. As a business owner, you often juggle multiple responsibilities, particularly in the early stages of your venture. It's imperative to ensure that any GST claims align with your company's accounting period.

The accounting period typically corresponds with the financial year, which can vary among entities. A prevalent accounting period spans from April to March, although some companies, like HP Inc and HP Enterprise, operate on a November to October fiscal year. Alternatively, some businesses and entrepreneurs opt for a January to December financial year, which is often chosen for its simplicity and alignment with the standard calendar period.

Unlocking the Benefits of GST Claims for Businesses

For Singapore startups and SMEs, claiming GST refunds can be a game-changer. Especially for those in STEM fields, where R&D activities often eat into financial resources. Being GST-registered means potential refunds from IRAS, injecting much-needed funds into day-to-day operations. This financial boost, though seemingly modest, can cover essential expenses like office rent, salaries, and utilities, helping businesses stay afloat and focused on growth.

How to switch to Xero from a different accounting system

How to transition to Xero from another accounting system

Are you struggling to switch to Xero from a different accounting system? Dive into this guide to learn more.

Firstly, how to transition to Xero:

Set up your organization within the Xero platform.
Select the commencement date for recording transactions in Xero.
Incorporate a bank account and input its initial balance.

Transfer data from your previous system to Xero

For users of alternative systems, data migration to Xero can be facilitate through importing CSV files in bulk. You can import the following categories:

Xero chart of accounts
Customer invoices
Supplier bills
Contacts
Fixed assets

Input historical transactions by:

Entering any sales invoices or bills not previously imported into Xero from your conversion date.
Recording receive money and spend money transactions for sales and purchases without invoices or bills.

Record historical transactions starting from the conversion date, including:

Any outstanding sales invoices or bills not yet imported into Xero.
Transactions for received and spent money related to sales and purchases without invoices or bills.

Process payments and reconcile your bank account with these steps:

Record payments made or received on invoices or bills directly in Xero.
Next, set up a bank feed to automatically import transactions from your bank into Xero. If a bank feed isn't available or doesn't import older transactions, manually import bank statements into Xero.
Thirdly, reconcile your accounts by comparing transactions in your bank account with those recorded in Xero. At the same time, confirm the matches suggested by Xero and adjust them if needed.
If setting up a bank feed or importing statements manually isn't possible, mark transactions as reconciled when they appear in your bank account.
In addition, if you prefer not to enter items into Xero before they appear in your bank account, import your bank statement first. Then, while reconciling, add spend or receive money transactions. Also, invoices or bills must be entered into Xero first to match payments on your bank statement.

Generate reports to assess your business performance, start with these key reports:

Aged Payables Summary or Aged Receivables Summary: Provides details of outstanding invoices or bills.
Profit and Loss report: Displays income minus expenses for a specified period, indicating profit or loss.
Balance Sheet: Compares your current assets to liabilities, revealing your total equity.

Finalize your tax returns:

Review your Sales Tax Report, which displays the current sales tax period if your sales tax settings are configured.
Utilize the Sales Tax Audit Report to ensure all transactions for the period are accurately recorded at the appropriate tax rate.
Transfer relevant figures from your Sales Tax Report in Xero to the tax authority submission form.
Conclude the sales tax period by publishing your report in Xero, preparing it for the upcoming period.

Howevery, the terminology for sales tax may vary depending on your organization's country. For instance, South African entities may refer to it as VAT on reports and screens within Xero.

Finally, if transitioning from another accounting system to Xero is proving to be a challenge, explore additional guidance available here.

Experience seamless transition to Xero:

In conclusion, at Clooud Consulting, we understand the urgency of your business needs. As a result, we prioritize providing swift and efficient solutions to help you switch to Xero from a different accounting system. As a result, from initial consultation to full setup, our team works tirelessly to complete the migration, because we aim to minimize disruptions to your operations. Trust Clooud Consulting to seamlessly move your business to Xero and unlock its full potential. Contact us today to get started.