Singapore’s Goods and Services Tax (GST) is a consumption tax (broad-based) levied on imported goods into Singapore and on almost all supplies of goods and services found in Singapore, with the exception of residential properties (sales and leases), provision of most financial services, and the import and local supply of investment based precious metals. Exporting goods and providing international services are zero-rated — which means the GST on these goods and services is at 0%. GST levied on imported goods is collected by the Singapore Customs. In Singapore the tax is known as GST, whereas in some other countries, the tax is known as Value Added Tax (VAT).

The current GST rate in Singapore is 7%. Businesses in Singapore with an annual turnover in excess of one million Singapore dollars are required, by law, to to register for GST. Businesses in Singapore with a turnover of less than one million Singapore dollars may voluntarily register for GST. Upon registering for the GST, businesses must charge the GST at the prevailing rate. This GST, that businesses in Singapore charge, is known as output tax, which will be paid to the Inland Revenue Authority of Singapore (IRAS). GST incurred on business purchases and expenses (including the importation of goods) is known as input tax. Businesses in Singapore can claim input tax if relevant conditions for claiming are met to the satisfaction of the IRAS.

GST compliance is regarded seriously, along with the responsibilities of each company in Singapore in charging the tax. RCW professional accounting firm Singapore helps businesses comply with the obligations and requirements of charging GST, and educates its clients on procedures and changing policies set by the IRAS.

Businesses, for one reason or another, may become non-compliant for GST-related matters. This often happens when business owners or relevant accounting departments are not fully aware of their responsibilities, obligations or changes to policies. In such cases, businesses faces a slew of potential issues, from late filing and incorrect charging, to tax evasion and fraudulent practices. Such issues may result in severe consequences for businesses, with stiff penalties from law enforcement agencies. A precursor to such proceedings may be an audit by the IRAS or by an appointed entity in Singapore. In such cases, a professional accounting !rm in Singapore is an invaluable source of knowledge and direction for businesses to get their GST matters aligned with government policy, and to potentially reduce the penalties imposed, if found guilty of non-compliance.

RCW accounting firm Singapore specializes in GST compliance matters, and has highlighted the more common issues related to GST, together with solutions to prevent and remedy non-compliance.

According to the IRAS, GST returns and payments from Singapore-based companies and businesses are due one month after the end of the accounting period covered by the return. There are four GST accounting periods in the year together with corresponding filing and payment due dates for businesses with or without GIRO plans for payment. For businesses in Singapore without a GIRO payment plan, deductions are made on the same day as the filing due date. For businesses in Singapore with a GIRO payment plan, deductions are made on the 15th day of the month immediately after the filing due date. Please refer to the table below:

Source: Inland Revenue Authority of Singapore 2013

In the event your business in Singapore does not have an GST accounts or payments due, your business still has to file a nil return for business done during that corresponding GST accounting period. In Singapore, businesses use the GST F5 / F8 Return to file their GST accounts. If the F5 / F8 Return is not submitted to the IRAS by the due date, the IRAS may any number of steps to rectify the matter.

The IRAS may issue an Estimated Notice Of Assessment (more on Estimated NOA in the section titled ‘Estimate Notice of Assessment’) to your business in Singapore, together with a 5% late payment penalty, over and above the estimated tax calculated. This is issued in the form of a demand note with a due date to pay. A professional accounting firm will be able to advise you on how to deal with the Estimated Notice of Assessment and demand note. If the IRAS feels stronger steps are required, they may impose a late submission penalty on all GST accounting periods for which the business has been non-compliant.

If payment has not been made by the demand notice due date, the IRAS may take additional steps to recover the due payment(s) by appointing your business’s bank in Singapore, your business’s tenant, lawyer, or another entity to act as the agent to pay the money owed. The IRAS may also stop the business from operating and/or restrict the owners, sole proprietor, or partners from leaving Singapore. At its discretion, the IRAS may also pursue legal action against the business or set up a warrant for the arrest of the business owners. RCW accounting firm Singapore can provide your business with expert advice and practices to keep your business compliant from the start, or to rectify the errors your business may have made for its GST accounting.

In some cases, RCW accounting firm Singapore can help your business appeal for a waiver of penalty. This is contingent on several factors and is considered by the IRAS on a case-by-case basis. However, RCW accounting firm Singapore can help your business make a more favourable case for itself by helping you to prepare and submit your F5/F8 Returns, overseeing the full outstanding amount of tax has been paid by your business, and keeping your business compliant (from the beginning) by following up that your business has paid its GST accounts on time over the past two years.

If the IRAS has appointed your bank as an agent, you can take steps to release your bank as agent only if your F5 / F8 Returns are filed and any outstanding tax amounts have been paid. In such cases, RCW accounting firm Singapore can help you follow up with the bank’s remittance and liaise with the IRAS to expedite the release of your business’s bank as agent for your outstanding tax payments. Similarly, RCW accounting firm Singapore can help your business and its owners deal with the more serious matters of being prevented from leaving Singapore, or having to appear in court, by providing you with expert advice on your next steps, together with the proper procedure for getting your tax and accounting matters back on track and fully compliant.

Whatever issues your business is facing with GST compliance, or other accounting and tax matters, RCW accounting firm Singapore has the resources and expertise to educate and help your business in getting its tax and accounting matters aligned with the laws and policies of Singapore.