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You need to understand that any kind of GST errors will attract a penalty that is as high as 200% of your tax owed. However, if you are smart enough to correct your GST errors from your GST F5 filing deadline, then you can escape from such penalties.
Therefore, you must discuss with a professional before getting any advice regarding your yearly GST filing or any other services related to your accounting and bookkeeping services so that you may avoid committing any mistake.
Alternately, you can also form your internal team who can review and regulate your GST filings and returns to stay ahead and correct any errors now in advance.
While buying from any GST-registered suppliers or even importing goods into Singapore, most of you must have incurred your GST as an input tax. You can claim such input tax after meeting a certain set of conditions.
All input tax claimed however, must be supported by any original tax invoices in the name of your company or any other proof as simplified tax invoices. Here, you are eligible for claiming input tax during the accounting period that is corresponding to your date mentioned on your invoice or import permit.
No zero-rating of goods will be allowed if goods have been delivered to any local address or in case there are no sufficient documents available to support the export. Often a few companies make the mistake of zero-rating supplies because they are only serving a certain overseas customer.
The international services can only qualify for zero-rating, which is not applicable if the services are any way directly connected with goods in Singapore.
Another GST errors can also be no accounting for GST for any gifts and on certain business assets sold. Remember, GST is chargeable for gifts that are costing more than $200.
Common errors while filing GST returns
Preparing and reporting GST is very simple thanks to the IRAS website’s e-services and publicly available calculators for your various tax concerns still there are some instances that may not be handled correctly resulting in GST filing errors.
The following are a few very common situations that can lead to mistake according to the IRAS:
- GST claiming without any proper supporting documents
Your each expense will generate an input tax should be accompanied by a proper invoice with the legal details of the company that is claiming the tax. Any GST claim for unsubstantiated expenses must be adjusted in a subsequent GST filing or via a F7 form.
- You must apply zero-rate to all clients located overseas:
Although international sales will be exempt from any GST output tax, however, there are few scenarios where you have to apply GST, and these situations are:
- If goods have been delivered to any address in Singapore.
- In case, there exists no sufficient evidence to demonstrate where the goods were exported.
- Any services that are directly related to land or goods within Singapore.
- Any services that benefitted any Singaporean resident
- Failing to apply any GST to assets sold
The GST should be applied to any sale of fixed assets e.g., furniture, equipment, or machinery.
- Invalid tax invoice
If you do not have any proper tax invoice for purchases above $1000 or a simplified tax invoice for transactions under $1000 containing all of the relevant elements, it is improper to claim any input tax on the purchases/expenses.
- Gifts
Free goods are viewed as a supply you make to your recipient. You do not have to charge GST to your recipient because the products are handed away for free. However, according to the GST approach outlined on the IRAS website, you may be obliged to account for your output tax as per the open market value of the products.
The following are a few things that you must be updated with to avoid any mistakes.
- Information you need
While filing your return, you must declare how much GST have you collected on your sales, and also how much GST that you paid on purchases.
- When to file
Usually, most businesses accounts are on a quarterly basis, which means they will file a GST after every 3 months. However, you may ask to file monthly. Better, you should e-file your return just within a month of your accounting period ending.
You may check the due dates on the web page of IRAS. If you had no transactions, then submit a zero return.
- GST payment
When the return is going to be filed, you will make GST payments. If you have any existing GIRO arrangement, then the payment will get deducted on the 15th day of the following month you will be filing.
- Getting your GST refund
In case you have paid more GST as compared to what you have collected, then you will be eligible for refund from IRAS. Your refunds paid via GIRO will arrive within seven days. Usually most other refunds come within 30 days.
