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GST Guide for Business Owners: What you need to know

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What is GST?

Goods and Service Tax (GST) is a consumption tax that is levied on the supply of goods and services and the importation of goods from other countries into Singapore. 

Goods and Service Tax is governed by Inland Revenue Authority of Singapore (IRAS). The current GST rate is 7%.

How does GST work?

GST tax is charged to the end consumer thus GST normally does not become a cost to the company. On the contrary, businesses act as tax collecting agents on behalf of Singapore tax department.

GST Return Figure 1

What does GST mean for company in Singapore?

Companies in Singapore are not automatically GST-registered. Businesses with a taxable turnover exceeding $1 million are required to register with IRAS. If your business doesn’t exceed $1 million in annual taxable turnover, you may still choose to voluntarily register for GST.

Every GST-registered company is required to collect GST from their customers for the goods and services provided. Subsequently, the company have to return the tax collected to IRAS on a quarterly basis via GST tax filing. This process is also known as GST Return

For example, if you charged S$100 for your product or service, you have to invoice your customer S$107 (S$100 for your product or service plus 7% GST).

Company can register for GST online via myTax Portal using CorpPass.

Calculating GST and issuing tax invoice

Simple formula for adding GST: Your price x 1.07 = GST inclusive price

Apart from adding GST to your prices, you also have to issue GST invoices to customers.

Using Ace Accounts, you can easily setup your businesses’ GST information.

GST copy

With Ace Accounts, you are able to generate tax invoices, simplified tax invoices, as well as debit and credit notes effortlessly. The generated invoice can provide essential details such as product name and model, unit price, tax applicable and payment terms.

This also helps businesses to obtain input tax claims, expediting the process of filing GST returns. 

What is GST form 5?

A document that consists of the income that tax payers have to file with IRAS. GST returns have to be filed by businesses which includes the purchases, sales, GST on sales and GST paid on any purchases together with an IRAS audit file in order for them to conduct audits.

With Ace Accounts, you are able to generate a GST F5 report to review your GST transactions before filing your GST F5 return. The figures have been populated for you based on your GST transactions recorded in the application. The GST detail report also shows the breakdown of all GST transactions which are grouped by GST rates. Filing of GST will be made easier using Ace Accounts.

GST F5

GST payment

Business has to make payment within one month after the return is filed. If you have existing GIRO arrangement, deduction will be on the 15th of the month following the filling.

If you are expecting a refund from IRAS, you will receive it via GIRO within 7 days.

Penalties on late and non-filing of GST returns

  • If you fail to file your GST return before the due date, IRAS will issue an estimated NOA and a 5% late penalty will be imposed based on the estimated tax.
  • Imposing a late submission penalty of S$200 monthly until the GST return is filed (Up to S$10,000)
  • Summon the business owner (including sole-proprietor, partner or director) to court

How can Ace Accounts can help businesses with GST accounting and filing for GST returns?

With Ace Accounts, your GST and tax submission are made simple, accurate and easy to use. Users are also allowed to check, edit and select the correct GST for every transaction. With the push notification, Users will be reminded to file their GST return on time. 

The all-in-one integrated app not only can help businesses with their accounting and bookkeeping, it also helps them with inventory management and HR, therefore this helps businesses to be more cost-efficient.

Thus, Ace Accounts is an easy-to-use accounting software which can help business owner to have lesser to manage hence, making their business more cost-efficient and productive.

 

You may check out more features on https://www.acesoft.com.sg/