Singapore Issues New Guidance on GST Rate Increase to 9% from Jan 2024
In the VAT landscape, rate changes are part and parcel of playing compliance catch-up. This time, Singapore has issued new guidance on their GST (goods and services tax) rate increase.
In the VAT landscape, rate changes are part and parcel of playing compliance catch-up. Are you in the lead? This time, Singapore has issued new guidance on their GST (goods and services tax) rate increase to 9%, starting January 2024. Here's what you need to know.
Which GST rates to apply (and when)?
Not sure what GST rate we're talking about? No worries. According to the new guidance, the GST rate in question depends on the timing of your supply. This is especially important as we transition into the new year. In other words, if you issue an invoice or receive payment in 2023, “you should” charge GST at 8%. However, for invoices issued and payments received on or after 1 Jan 2024, the GST rate should be 9% unless you've chosen to charge 8% under specific transitional rules.
What about price displays?
According to the requirements issued by Singapore's Revenue Service, businesses are mandated to exhibit prices that include GST on all public price displays. This includes price tags, lists, ads, brochures, and websites. Transparency is always a must in the GST and business environment, so naturally, it's quintessential that all quoted prices (whether written or spoken) incorporate GST, ensuring customers know the final price they'll pay upfront.
However, a special exemption is given to hotels and food & beverage (F&B) establishments imposing a service charge on their goods and services. These service industries are not required to exhibit GST-inclusive prices for items subject to service charges, simplifying their operations. Still, they must ensure that the customers are fully aware of including GST and service charges in the prices.
Common errors to avoid
The transition and prep period may feel trickier than initially anticipated as we enter the new year. Therefore, it's important to keep your eye on these common mistakes and how to avoid them.
Charging GST at 9% before January 2024
All payments received in 2023 are still subject to GST at 8%. This is still the case even if the goods and/or services will be delivered on or after 1 Jan 2024. To avoid and mitigate this error, it's best practice to ensure that all your accounting systems are configured GST rate change (but no earlier than 1 January 2024).
Charging or displaying GST at 8% after January 2024
The GST rate change may take more work than you think, especially regarding smaller admin tasks and configurations. So, should you use multiple sales platforms such as mobile apps, self-ordering kiosks, brick-and-mortar stores, and online websites for displaying prices and conducting sales, it's crucial to update all receipts and invoices across these channels to reflect the 9% GST rate starting from 1 Jan 2024, onwards.
Enter the new year with confidence (and compliance) with VAT IT
Fortunately, you don't have to enter the new year with doubt - especially regarding your GST/VAT rates and compliance. Curious about what other changes may have happened overnight? We've got you covered.