Filing Goods and Services Tax (GST) returns (GST F5/F7/F8) is a crucial part of the compliance process for applicable companies in Singapore. The Inland Revenue Authority of Singapore (IRAS) mandates all GST-registered companies to file their GST returns, regardless of whether there are any transactions or not. This article will provide an overview of the GST return filing process in Singapore.
Who is Required to File GST Returns?
GST-registered businesses must file their returns. This includes companies, partnerships, sole proprietors, and limited liability partnerships who have exceeded the mandatory registration threshold of S$1 million in annual taxable turnover.
Companies that do not meet this threshold but wish to become a GST-registered business voluntarily may also be required to file GST returns. This article will highlight some common mistakes made when filing GST returns in Singapore and provide tips on how to avoid them.
Related Read: Singapore Goods and Services Tax (GST): An Essential Guide
Why is it Important to File Your GST Returns Correctly and On Time?
It is necessary to do so to avoid penalties arising from erroneous or untimely filing. Filing your returns correctly also ensures that the amount of tax collected from customers is accurately reflected, preventing any disputes with IRAS.
What Are Some Common GST Filing Mistakes?
We explore some common mistakes that happen when companies file their GST returns:
Filing After the Due Date
It is important to remember that the GST filing date is 14 days from the date of your request via myTax Portal. Missing GST filing deadlines or submitting incomplete or inaccurate GST returns can result in penalties and fines. Businesses must ensure that GST returns are filed on time and contain accurate information regarding taxable supplies, input tax claims, and other relevant details.
Incorrect Input Tax Claims
Claiming input tax on non-GST taxable purchases or expenses disallowed for GST recovery can lead to inaccuracies in GST returns. Businesses must ensure that valid tax invoices support input tax claims and relate to business expenses directly attributable to taxable supplies.
Failure to Account for GST on Imported Services
Overlooking the requirement to account for GST on imported services, including digital services purchased from overseas suppliers, can result in GST underpayment. Businesses must self-account for GST on imported services and report them accordingly in their GST returns.
Misclassification of Supplies
Misclassifying supplies as exempt or zero-rated when they should be standard-rated for GST purposes can result in underpayment of GST. Businesses must accurately determine the GST treatment of their supplies based on the nature of the goods or services provided and the relevant GST regulations.
Using Incorrect GST Treatment and GST Filing
Failure to accurately account for and report GST, including under-declaring sales, misapplying GST treatment, claiming disallowed input tax credits, or claiming credits without meeting conditions, may result in penalties.
Businesses can mitigate these risks by establishing robust accounting procedures and internal controls, and by seeking the expertise of qualified GST professionals. Qualified professionals can conduct regular reviews of GST returns to prevent filing errors and identify any incorrect GST treatment for transactions.
What Are the Penalties for Late, Non-filing, or Incorrect GST Returns?
The penalties for non-compliance with GST regulations in Singapore are strict. It is crucial for businesses to comply with GST regulations and avoid these penalties by accurately filing their returns on time and correctly reporting all relevant information.
Late or Non-filing of GST Returns
IRAS can implement these enforcement actions if you do not file your GST returns by the due date:
- Issue an estimated Notice of Assessment (NOA) and impose a 5% late payment penalty on the estimated tax
- Impose a late submission penalty
- Summon the company or persons in charge of the business operations to court
GST-registered businesses with no business activity during the accounting period must still file a ‘Nil’ GST return.
Estimated NOA
Once your business receives an NOA, you must file your GST return immediately and pay the GST, inclusive of the 5% late payment penalty, before the due date stated on the late payment penalty notice.
Penalty for Late Submission
If the GST return is not filed by the deadline, a late submission penalty of S$200 will be imposed immediately. For every completed month that GST F5/F8 is not filed, an additional penalty of S$200 will be imposed. The maximum amount that can be imposed per outstanding F5/F8 return is S$10,000. The penalty must be paid together with the GST payments, if any.
Court Summons
If you continuously fail to file your GST returns, your business or the people responsible for its operations may receive a summons to attend Court on a particular date. If you are convicted of an offence in court, your business may be fined up to S$5,000 per offence.
Incorrect GST Returns
Companies can be penalised for up to 200% of the undercharged tax when submitting the incorrect GST returns. They can also receive a fine and imprisonment term. Businesses that commit tax fraud will receive more severe penalties.
Companies can, however, have penalties reduced if they voluntarily disclose past errors and omissions if they meet the qualifying conditions under the IRAS Voluntary Disclosure Program. Voluntary disclosures can be made by sending an e-request for GST F7 (Disclosure of Errors on GST Return) via myTax Portal and e-filing the GST F7 within 14 days from the date of request.
What is the Timeline to Correct Errors in Past Returns?
Companies should rectify their errors once they discover them. Errors must be corrected within five years from the end of the relevant GST accounting period. Penalties may be imposed if they are corrected within one year of the end of the relevant GST accounting period.
Filing GST F7 to Correct Errors
For errors made in the GST F5/F7/F8, you must file GST to correct the errors. When you file your GST F7, you must request it and submit the form electronically on myTax Portal. Although the GST F7 is similar to the GST F5, you must regard it as a new GST return for the accounting period.
Note that the GST F7 submitted will override the GST F5/F7/F8 submitted previously for the same accounting period. You must also briefly describe the errors made in the GST F7 turned in.
Understanding the Treatment of Errors Affecting More Than One Accounting Period
When errors affect more than one accounting period, you can combine them and report them in a single GST F7 on a yearly basis, such as on a financial, tax year, or calendar year basis. This applies only if your errors are made in boxes 1 to 7 of your past GST F5 returns.
You should report the consolidated revised values, including the net adjustment in the GST F7 of:
- The last accounting period of the year; or
- The last accounting period when an error is made for the year
Tips to File GST Returns Accurately and Timely
To avoid penalties and ensure compliance with GST regulations, businesses should follow these tips when filing their GST returns:
Understand GST Regulations
Familiarise yourself with Singapore’s GST regulations and guidelines to ensure that you understand the GST treatment of different types of supplies, input tax claims, and compliance requirements.
Look Out for Common Errors
It helps to bear in mind the common errors businesses make when they file GST. Some typical GST errors include:
- Claiming GST without a tax invoice or on disallowed expenses
- Zero-rating supplies because your customer is not in Singapore
- Failing to account for GST on gifts
- Failing to account for GST on business assets sold
Maintain Accurate Records
Keep detailed and organised records of all transactions, including tax invoices, receipts, and accounting records. Accurate record-keeping ensures that you have the necessary information to complete your GST returns correctly.
File on Time
Adhere to the prescribed deadlines for filing GST returns to avoid late filing penalties. Set reminders or establish processes to ensure that GST returns are filed promptly each accounting period.
Outsource Your GST Filing to a Third-Party Provider
If you are unable to do the above, we highly recommend that you engage the services of a third-party provider such as InCorp to assist you. Our competent taxation team can handle all your GST filing requirements, so you can focus on running and growing your business.
FAQs About GTS Return
What is a GST return?
- Any business in Singapore that is GST-registered has to file a return through a document that acts as a declaration to IRAS that your company has complied with its legal obligations regarding the collection and payment of GST in Singapore.
What are the due dates for filing GST in Singapore?
- Most businesses are on a quarterly accounting period, so they file a GST F5 every three months. You must e-file your return within a month of the accounting period ending.
How do I calculate GST return?
- You can use a simple formula of comparing the amount you paid on purchases to the amount you collected on sales to derive your GST return. If the resulting number is positive, the sum must be paid to IRAS, and if negative, you can get a GST refund for it.
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