Who Can Register for VAT Registration and GST in Singapore?

Can Anyone Register for VAT Registration?

VAT (Value Added Tax) registration is a prevalent taxation system that allows businesses to reclaim VAT on goods and services purchased. Interestingly, any individual operating as a sole trader can register for VAT. However, it is crucial to note that individuals cannot register solely for the purpose of reclaiming VAT on personal expenditure. The primary objective of VAT registration is to facilitate the recovery of VAT incurred on business-related costs.

Which Items Are Exempt from GST in Singapore?

Despite the comprehensive nature of GST (Goods and Services Tax) in Singapore, certain items have been specifically excluded from its coverage. These items include:

Alcohol for human consumption Petrol and diesel Aviation turbine fuel

Businesses dealing with these exempt items must obtain VAT registration in the state where their business is located. This is to ensure that all transactions involving taxable goods or services fall within the purview of GST.

Registration Criteria for GST in Singapore

The criteria for GST registration in Singapore are designed to ensure that businesses with significant taxable turnover are subject to GST. A person in Singapore is liable to register for GST if their taxable turnover in certain periods meets specific thresholds. Here are the key criteria:

Taxable Turnover over the Past Three Calendar Quarters

If the taxable turnover at the end of the calendar quarter (i.e., March, June, September, or December) and the total of the past three quarters exceeds SGD 1,000,000, then registration becomes mandatory.

Expected Turnover in the Next 12 Months

If at any point in time, a person reasonably expects their taxable turnover in the next 12 months to exceed SGD 1,000,000, they must also register for GST. This forward-looking expectation ensures that businesses anticipate growth and comply with tax obligations accordingly.

In summary, while sole traders and businesses dealing with categories such as alcohol, petrol, and aviation turbine fuel must register for VAT, the registration process for GST in Singapore is based on rigorous turnover thresholds. Proper understanding and adherence to these criteria are essential for ensuring compliance with Singapore's tax regulations.