If you own a business that is registered under the government of Singapore, then you will have to file a monthly, quarterly, or yearly Goods and Services Tax (GST) Return which will depend on the nature of your business.
For the ease and comfort of the citizens, the state has set up online GST portals where people will file their GST returns without any difficulties. It saves them from the hassle of waiting in long queues to get their procedure done. However, since many people make simple mistakes in filing their returns, this guide should help you differentiate yourself from those people.
What is a GST Return?
A GST return is a document that is used by tax authorities to calculate the tax liability of each company. A taxpayer is required to show their annual income, sales, services, and purchases to the authorities to file their GST. While the process to file your GST used to be extremely hectic and tedious, the e-filing facility that is commonly available now has effectively decreased the complexity of the process.
Avoid these Common Errors While Filing Your GST Returns
● GST Requirement for Gifts
A recipient who receives goods as gifts is not supposed to pay tax. However, the sender is responsible to pay the output tax according to the open market value (OMV) of the goods as instructed on the website of IRAS. if you have claimed tax on the purchase of gifts worth more than $200 then they will receive a GST amount.
● Zero-Rated GST
Export and international services do not require filing GST. However, you need to ensure what kind of international and export services you are providing? Since the export industry is widespread in many areas, your niche needs to be specified. To be a zero-rated service, your niche must correspond to the state’s GST filing requirements and limitations, such as an international service must align with section 21(3). On the other hand, the goods must be exported to the foreign receiver to be considered as zero-rated. If the goods are not exported and only labeled as an export service, then they will be accounted as GST.
● Tax Invoices Must be Valid
It is obligatory for every business that the GST registered to claim a correct input tax invoice for goods worth $1000 or above. The tax invoice must include the following details:
- Business title and their GST number,
- Date of the invoice issued,
- The total amount including and excluding GST,
- Total GST to be paid.
Which Expenditures Are Not Claimed as Input Tax
Some expenditures according to the GST regulations 26 and 27 are not deemed as input tax payable. These expenses include medical aid and other benefits provided to the staff and their family members, the cost and other expenses associated with the vehicle owned and used by individuals or companies, sports or recreational fees.
GST is a tax that is paid in exchange for goods and services provided to the citizens by businesses. It is more like an indirect tax that the customers pay to the businessmen, who will then forward it to the government with which the state earns revenues. Make sure to go through the details of the procedure when filing GST returns to avoid any mistakes since the government of Singapore has a strict law and can impose high penalties against anyone who delays it or does it incorrectly.