GST Deregistration in Singapore: Essential Guide
If you are opting for GST deregistration in Singapore, you need to understand all the aspects of this move to ensure cancellation of your GST registration. You will need a complete guide giving details on the main requirements, steps, and post-deregistration tasks that you must execute to be compliant.
What is GST Deregistration?
There are situations when you may choose GST deregistration to cope with the changes. You may do so because you;
- Ceased operations
- Changed business structure or model
- Took a strategic decision
- Stopped selling taxable supplies
- Decided to enhance cash flow
Whatever the case, it is necessary to cancel your (GST) Goods and Services Tax deregistration. Doing so may make your company more agile financially. Well, it is easier said than done.
Cancelling your GST registration can adversely affect your competitiveness and financials. An experienced accountant can assist you in doing it correctly without harming your input tax credits.
Let us see the conditions that may drive you to this decision, understand the benefits, and judge whether or not voluntary deregistering will help your GST group.
Compulsory GST Deregistration in Singapore
There are certain cases where you must apply to cancel your GST registration within 30 days:
- When your company stops operating or producing taxable supplies
- When your turnover goes below $1 million, and you expect it to stay there
- When the structure of your business changes (like from a sole proprietorship to a private limited company)
- When you start dealing in exempt supplies
Voluntary GST Deregistration
If you expect your taxable turnover to fall below $1 million, you can voluntarily cancel GST registration in Singapore. If you registered for GST voluntarily, you have to stay registered for at least two years.
Before taking the decision, you must ensure that the fall in revenue is not temporary. Because, you do not want to rush to re-register for GST if your turnover rises.
If you find the decision too taxing, hire a provider that offers services for GST filing Singapore.
GST Deregistration Simplifies Your Business
Your provider will help you put together the necessary documents you must submit with your voluntary deregistration application. There must be an expected decline in revenue over the next 12 months.
Advantages of GST Deregistration
- It saves your time, effort, and resources by reducing the complexity of bookkeeping and tax filing
- It saves your time, effort, and resources by reducing the complexity of bookkeeping and tax filing
- You can keep all your sales revenue as you do not have to remit GST to IRAS
Disadvantages of Voluntary GST Deregistration
- You cannot deregister for at least two years after voluntary GST registration
- It is difficult to estimate future turnover precisely, which adds uncertainty to your decision to deregister
- After deregistration, you cannot claim input tax credits on your business purchases
- Your clients may go to your GST-registered competitors to claim input tax credits on their purchases
GST Deregistration Process in Singapore
To initiate the GST deregistration process in Singapore, log into the myTax web portal. IRAS may take up to 10 days to process your application.
Preparing GST Deregistration Application
Your application to cancel GST registration must abide by specific conditions: stopping business activities or ceasing taxable supplies within 30 days. To initiate the application process:
- Your provider logs into myTax Portal and completes the online forms
- After approval, a notification gives you the GST cancellation date
- From that date onwards, stop charging and collecting GST, mark all current tax invoices as GST cancelled
But, go on charging and collecting GST till the last authorised date. File your final GST return and store the records for at least five years.
Finalising GST Obligations: Filing Last GST Return
After GST deregistration in Singapore, you must complete the company’s final GST. Include details like:
- Output tax on your business assets (property and stock) if their combined value is more than $10,000
- Also, consider goods imported under special schemes
- Output tax for supplies received before deregistration
- Post-deregistration, under certain conditions, you can claim input tax for goods or services you purchased before deregistration
- If you cannot produce documents of foreign sales or payment of international services tax, include them as local supplies and include the current GST rate in the final GST return
- Check if the GST rate changed and correct the value of standard-rated supplies and impacted output tax
Post-Deregistration Considerations
Post-deregistration, stop collecting GST from your customers. You must adjust business practices to avoid incidences like issuing GST invoices. Failing to do so might attract fines.
Adjusting Business Practices
- Stop including GST in your displayed or advertised prices
- Check if you have any contracts signed before GST deregistration that need price adjustments
- Post-deregistration for returned goods and rebates on them, adjust the GST amount as per the GST rate at the time of sale
- For goods exchange, apply GST only on additional items received
Record Keeping is Mandatory
Even after GST deregistration in Singapore, you must keep financial records to be compliant. It is mandatory. Doing so enables you to negotiate any potential future audits, issues or inquiries.
Retention of Accounting Records
As per the law, you must maintain your accounts and transaction information for at least five years from the date of transactions. You have to do it even after your business has ceased operations or deregistered for GST. It helps avoid any penalties or legal issues.
Dealing with Audits
You can store accounts and transaction records in electronic format in compliance with the requirements advised by the GST Comptroller. These records will provide info on your past tax positions and help you survive an audit.
Changing Business Structure and GST Registration
If you want to convert your sole proprietorship to a private limited company, there may be a change in GST registration. You may have to start by GST deregistering it with IRAS.
Selling Your Business and GST Implications
The sale of a business and its property has GST implications. If the buyer is a GST-registered new business, you may not have to account for output tax in your final GST. The condition is that the buyer must ensure the continuity of your business and use its assets to achieve the same business purposes. Both you and the new owner must store records of the assets transferred.
GST deregistration in Singapore is a tough cookie to crack. An expert accountant can help you understand when to deregister compulsorily or voluntarily, face the application process and submit the final GST. Contact us at +65-6536 0036 or info@sbsgroup.com.sg to discuss your issues with our accountants.
Also Read: Ultimate Guide to GST Filing Singapore
