You may have repeatedly heard the term "GST" in  Singapore. For the curious, GST actually stands for Goods and Services  Tax. This is Singapore’s broad-based tax on domestic consumption. This  tax is paid when cash is spent on goods and services that are supplied  in Singapore by a taxable person in the course of his business, and on  goods which are imported into Singapore. The only exceptions in this  category are the sale or lease of residential properties which are  exempt supplies.

To make it simpler, GST is actually the equivalent of Value Added  Tax (VAT) in most countries. In Singapore, however, GST is pegged at a  considerably lower rate than most Asian countries. In fact, the  Singapore GST is currently charged and accounted at a rate of 7% on the  value of supply.

You must register for GST in Singapore, if at the end of a quarter,  your taxable supplies amount to more than SGD1 million for 1 quarter  and the past consecutive 3 quarters; or at any time, if you expect your  taxable supplies to exceed SGD1 million for the next 12 months.

Here is an important note: GST registration for companies with annual turnover below $1 million is not mandatory.  If you, however, believe that it makes economic sense for you to  register your company for GST, then you can opt to register voluntarily.

Security Deposit

If you have outstanding tax penalties, or are a  director/partner/sole proprietor of other business which have  outstanding taxes or penalties, you may be required to provide a  security deposit upon registering for GST.

Late Notification of Liability for GST Registration

Please note that if you are required to register for GST, you must  apply within 30 days of becoming liable. If you are one of these  Singapore companies with mandatory GST registration, you may be fined  up to S$10,000 and a penalty of 10% of the tax due, if you fail to  apply for GST registration on before the deadline.