Singapore's Goods and Services Tax (GST) is a key component of its tax system, introduced on 1 April 1994 as part of a broader fiscal strategy to shift towards consumption-based taxation. Originally set at 3%, the GST rate has gradually increased over the years, reaching 9% as of 1 January 2024. This indirect tax, similar to the Value-Added Tax (VAT) in other countries, is levied on the sale of goods and services as well as imported goods. While businesses collect and remit GST, the final tax burden falls on consumers, ensuring a broad-based approach to revenue generation.
This guide provides a comprehensive breakdown of Singapore’s GST framework, covering:
Aspect | Key Details |
Definition | Singapore GST is a consumption tax imposed on goods, services, and imports at the rate of 9% or 0% for nil rated. |
GST Mechanism | A multi-stage tax where businesses charge GST on sales (Output Tax), pay GST on purchases (Input Tax), and remit the net GST to IRAS. |
GST Rates | Standard-rated (9%), Zero-rated (0%), Exempt (No GST charged, no input tax claimable), Out-of-scope (not subject to GST). |
GST Registration | Mandatory if turnover > S$1M (Retrospective/Prospective Test). Voluntary registration possible for businesses making taxable supplies. |
Tax Invoices & Collection | GST-registered businesses must issue tax invoices and collect GST from customers at the time of sale. |
GST Filing & Payment | Quarterly (default), monthly, or biannual returns via IRAS myTax Portal. Payment through GIRO, bank transfer, or AXS. |
Penalties for Non-Compliance | Late filing: S$200/month (up to S$10K). Late payment: 5% penalty + 2% interest/month. Fraudulent GST evasion: Up to 7 years imprisonment + fines. |
GST Refunds & Reliefs | Input Tax Claims (for registered businesses), Tourist Refund Scheme (TRS), Major Exporter Scheme (MES), Import GST Deferment Scheme (IGDS). |
Goods and Services Tax (GST) in Singapore is a broad-based consumption tax levied on selling goods and services and imported goods. It is like a Value-Added Tax (VAT) in other countries. GST is imposed at every stage of the supply chain, but the end consumer bears the actual tax burden.
GST was introduced in Singapore on 1 April 1994 at 3% and has gradually increased over the years. As of 1 January 2024, the GST rate is 9%. GST is governed by the Inland Revenue Authority of Singapore (IRAS), which oversees GST registration, collection, and compliance.
Key Features of GST:
GST operates under a multi-stage tax mechanism, meaning that GST is levied at each stage of the supply chain but is ultimately paid by the final consumer.
GST in Singapore involves three key steps:
Note: Input Tax is greater than Output the business can claim a GST refund from IRAS.
Example: How GST Works in a Supply Chain?
At each stage, businesses only remit the net GST after deducting input tax, ensuring GST is applied fairly across the supply chain. Consider a furniture supply chain where GST is levied at each stage:
Stage | Seller | Selling Price (Excl. GST) | GST Charged (9%) | Total Price (Incl. GST) | GST Paid to IRAS |
1 | Manufacturer sells raw materials to Supplier | S$100 | S$9 | S$109 | S$9 |
2 | Supplier sells materials to Furniture Retailer | S$200 | S$18 | S$218 | (18-9) = S$9 |
3 | Retailer sells to Consumer | S$500 | S$45 | S$545 | (45-18) = S$27 |
In Singapore, different types of goods and services are categorized under four main GST classifications:
Standard-rated supplies are taxable supplies where GST is charged at the prevailing rate, which is currently 9% as of 1 January 2024. Businesses registered for GST must charge GST on these supplies and report the GST collected as output tax in their GST returns.
Examples of Standard-Rated Supplies:
Zero-rated supplies are also taxable supplies, but GST is charged at 0%. Businesses making zero-rated supplies do not collect GST from customers, but they can still claim input tax credits for GST incurred on purchases related to these supplies.
Examples of Zero-Rated Supplies:
Singapore’s GST rate has changed incrementally over the years. When GST was first implemented in 1994 it was 3%. Table below summarizes the historical GST rate changes in Singapore:
Effective Date | GST Rate |
1 April 1994 (introduction) | 3% |
1 January 2003 | 4% |
1 January 2004 | 5% |
1 July 2007 | 7% |
1 January 2023 | 8% |
1 January 2024 | 9% |
Exempt supplies are not taxable under GST, meaning that GST is not charged to customers. However, businesses cannot claim input tax credits on purchases related to exempt supplies.
Examples of Exempt Supplies:
Out-of-Scope Supplies (Not Subject to GST)
Out-of-scope supplies are transactions completely outside the scope of Singapore’s GST system, meaning GST does not apply at all, and these supplies are not reported in GST returns.
Examples of Out-of-Scope Supplies:
GST Category | GST Rate | Can Businesses Charge GST? | Can Claim Input GST? | Examples |
Standard-Rated | 9% | Yes | Yes | Local sales of goods & services, restaurant meals, office rentals |
Zero-Rated | 0% | Yes, but at 0% | Yes | Exports of goods, international transport services |
Exempt | No GST | No | No | Bank loans, insurance, residential property transactions |
Out-of-Scope | No GST | No | N/A | Salaries, donations, overseas-to-overseas sales |
Every person or entity involved in the sale or purchase of taxable goods or services in Singapore has some obligations related to GST. While the obligations for consumer is to pay the applicable GST to seller. Businesses have different types of obligations under GST rules and regulations in Singapore
Businesses must register for GST if their taxable turnover exceeds S$1 million within a 12-month period. There are two tests for registration:
Voluntary Registration: Businesses below the S$1M threshold may voluntarily register for GST if they mainly make taxable supplies.
Registration Process: GST registration is completed via the IRAS myTax Portal by submitting Form GST F1. Processing typically takes two to four weeks, and IRAS will issue a GST registration number and effective date upon approval.
GST-registered businesses must charge 9% GST (as of 2024) on standard-rated supplies. Zero-rated, exempt, and out-of-scope supplies follow different tax treatments.
Issuing Tax Invoices: A tax invoice must be issued within 30 days of a taxable supply and must include:
For transactions ≤ S$1,000, a simplified invoice may be used. Businesses must display GST-inclusive prices to consumers, ensuring transparency in pricing.
GST must be collected at the point of sale or when issuing an invoice. Even if a customer refuses to pay GST, the business remains liable to remit the tax to IRAS. For instalment payments, GST must be reported in full upon invoicing rather than upon receipt of payments.
GST collected from customers must be remitted to IRAS after deducting input tax (GST paid on purchases). Payment is made through Form GST F5 during the return filing process. GST can be paid via GIRO, bank transfer, AXS, or internet banking. GIRO payments are deducted automatically on the 15th of the month following the return due date.
All GST-registered businesses must file GST returns online via IRAS myTax Portal. The filing frequency depends on the business's assigned filing cycle:
GST Return (Form GST F5): Businesses must report:
Businesses must retain invoices, receipts, credit notes, and import/export documents for at least five years. Failure to maintain proper records can result in fines of up to S$5,000 per offense.
Singapore's GST system includes various refund mechanisms and special schemes designed to ease cash flow for businesses, support exports, and provide relief for specific groups like tourists and importers.
Businesses registered for GST can claim back the GST paid on business-related purchases, ensuring they only bear tax on final consumption.
International tourists can get a refund of the GST paid on shopping, encouraging retail spending by visitors.
Tourists can claim GST refunds on goods purchased in Singapore if they meet criteria such as a minimum S$100 purchase, departing via Changi or Seletar Airport within 2 months, and using the eTRS system at airport kiosks. Services like hotels and food are not eligible.
Businesses involved in imports and exports can benefit from schemes that reduce GST cash flow burdens.
GST Relief for Individuals
Singaporeans and travelers receive targeted GST relief to reduce the tax burden in specific circumstances.
Singapore’s Inland Revenue Authority of Singapore (IRAS) imposes strict penalties for non-compliance with GST regulations to ensure businesses fulfill their tax obligations. Late filings, incorrect reporting, or fraudulent activities can lead to financial penalties, asset seizures, or even criminal prosecution. The table below summarizes the key penalties businesses may face for GST-related violations.
Type of Offense | Penalty/Fine |
Late Filing of GST Returns | S$200 fine immediately after due date per return Additional S$200 per month if not filed, up to S$10,000 per return IRAS may estimate tax and enforce payment |
Late Payment of GST | 5% penalty on unpaid tax 2% additional penalty per month after 60 days (capped at 50% of unpaid tax) IRAS may appoint agents (e.g., banks) to recover unpaid GST, seize assets, or issue Travel Restriction Orders (TRO) |
Incorrect GST Reporting (Errors in Returns) | Negligence: Penalty up to 100% of underpaid GST Careless mistakes: Fine up to S$5,000 per error False reporting or misrepresentation: Up to 200% of underpaid GST |
Wilful GST Evasion and Fraud | Up to 7 years’ imprisonment and/or fine up to S$10,000 Additional penalty of 3x tax evaded False invoicing or fraudulent claims: Fine up to S$50,000 or 3 years jail |
Failure to Register for GST (when required) | Fine up to S$10,000 + backdated GST owed |
Charging GST when not registered | Fine up to S$10,000 + required to pay wrongly collected GST |
Issuing Incorrect GST Invoices | Fine up to S$5,000 per invoice |
Failure to Keep Proper Records (min. 5 years) | Fine up to S$5,000 per offense |
Continued Non-Compliance or Severe Violations | Legal action by IRAS, seizure of assets, court summons, travel bans, or business closure |
Singapore’s GST model ensures stable revenue while keeping corporate and personal taxes low. The consumption-based system supports economic growth and funds public services without excessive tax burdens on businesses or individuals.
Despite the increase to 9% in 2024, Singapore’s GST remains lower than the Asia-Pacific (11-12%) and global average (19%). Many developed nations have VAT/GST rates of 10-20% or higher. This broad-based yet modest GST structure balances revenue generation with targeted rebates to protect lower-income groups.
For businesses, GST compliance is essential to avoid penalties and manage cash flow. With stricter enforcement and digitalization, businesses must stay updated and integrate GST best practices. As Singapore expands GST to the digital economy and e-commerce, the system remains efficient, competitive, and future-ready.