Zero GST

Zero GST | Bestar

Singapore's Zero-Rated GST Explained

In Singapore, "Zero GST" refers to zero-rated supplies under the Goods and Services Tax (GST) system. While the standard GST rate in Singapore is currently 9% (as of 2025), certain goods and services are "zero-rated," meaning that GST is charged at 0%.

Here's a breakdown of what that means and the key aspects:

1. What are Zero-Rated Supplies? Zero-rated supplies are considered taxable supplies, but the GST rate applied to them is 0%. This is different from "exempt supplies," where no GST is charged at all, and businesses cannot claim input tax (GST paid on their purchases) related to these supplies. For zero-rated supplies, businesses can still claim input tax on their purchases that are used to make these zero-rated supplies.

2. Key Categories of Zero-Rated Supplies in Singapore:

• Export of Goods: When goods are sold and shipped from Singapore to an overseas customer for consumption or use outside Singapore, they are typically zero-rated. This is a crucial measure to keep Singapore's exports competitive in the global market. Businesses must have proper documentation to prove the export.

• International Services: Services classified as "international services" under Section 21(3) of the GST Act are also zero-rated. These generally involve services provided to overseas persons or consumed entirely outside Singapore. Examples include:

  • Consultancy services provided overseas.

  • International transport services (e.g., air tickets for international flights, sea freight).

  • Telecommunication services provided to non-residents.

  • Services directly related to land or property outside Singapore.

  • Certain services supplied to approved marine customers (shipping companies, airlines, etc.) for use on qualifying vessels in international voyages.

• Sales of Investment Precious Metals (IPM): Sales of specific investment precious metals (gold, silver, platinum, and palladium meeting certain purity and tradeability criteria) to approved persons can be zero-rated.

3. Why is Zero GST Important?

• Promotes Exports: By zero-rating exports, Singapore avoids imposing a consumption tax on goods and services consumed outside its borders, making its exports more price-competitive internationally.

• Avoids Double Taxation: It prevents goods and services from being taxed both in Singapore and in the destination country.

• Maintains Competitiveness: It helps Singapore remain an attractive hub for international trade and services.

4. Documentation and Compliance: Businesses making zero-rated supplies must maintain accurate and complete documentation to support their zero-rating claims. Failure to do so can lead to penalties. The Inland Revenue Authority of Singapore (IRAS) provides detailed guidelines on the specific conditions and documentation required for each type of zero-rated supply.

5. Exemption from GST Registration: In some specific cases, a business that primarily makes zero-rated supplies (where the proportion of zero-rated supplies over total taxable supplies exceeds 90%) and would be in a net refundable position for GST, may apply for exemption from GST registration. If approved, they do not need to collect GST on sales or file GST returns, but they also cannot claim input tax.

How Bestar can Help

Bestar can help businesses in Singapore in a vast array of ways, leveraging our specialized knowledge, experience, and networks to drive growth, ensure compliance, and overcome challenges. Here's a breakdown of how we can assist:

1. Strategic & Business Development:

• Consulting Services: Bestar can help businesses analyze their current situation, identify opportunities, develop growth strategies, optimize operations, and navigate market complexities. This includes areas like market entry, mergers & acquisitions (M&A), and digital transformation.

• Business Advisory: Bestar can provide guidance on business planning, risk management, and overall corporate governance, ensuring businesses have a solid foundation for sustainable growth.

• Expansion and Globalisation: With Singapore being a hub for regional expansion, Bestar can assist businesses in understanding and entering new markets, navigating international regulations, and establishing regional operations. Bestar offers resources and networks to support this.

2. Financial Management & Compliance:

• Accounting and Bookkeeping: Bestar ensures accurate financial records, handles day-to-day bookkeeping, prepares financial statements, and provides insights into financial health.

• Tax Advisory: Bestar helps businesses understand and comply with Singapore's tax laws (including GST, corporate tax, etc.), optimize tax structures, and identify potential tax incentives or reliefs. This is particularly relevant when dealing with complex areas like zero-rated GST.

• Audit & Assurance: Independent auditors provide credibility to financial statements, ensuring transparency and compliance with accounting standards and regulatory requirements.

• Financial Planning & Analysis: Bestar can assist with budgeting, forecasting, cash flow management, and investment decisions to optimize financial resources.

3. Legal & Regulatory Compliance:

• Corporate Secretarial Services: Bestar ensures businesses comply with the Companies Act, manages corporate records, handles annual filings with ACRA (Accounting and Corporate Regulatory Authority), and provides guidance on corporate governance.

• Professional Counsel: Bestar provides advice on a wide range of matters, including contract drafting, intellectual property protection, employment law, and regulatory compliance. 

• Compliance & Risk Management: Bestar helps businesses identify, assess, and mitigate risks, ensuring adherence to industry-specific regulations and preventing potential legal issues.

4. Human Resources & Talent Management:

• HR Consultancy: Bestar can advise on HR policies, talent development, performance management, compensation and benefits, and employee relations, ensuring compliance with local labor laws.

• Payroll Management: Outsourcing payroll to Bestar ensures accurate and timely salary processing, tax deductions, and compliance with CPF (Central Provident Fund) contributions.

Benefits of Hiring Bestar:

• Access to Expertise: Gain specialized knowledge and skills that may not be available in-house.

• Cost-Effectiveness: Often more economical than hiring full-time employees for specific tasks or short-term projects.

• Time Savings: Free up internal resources to focus on core business activities.

• Reduced Risk: Ensure compliance with complex regulations and mitigate potential legal or financial pitfalls.

• Increased Efficiency: Streamline processes and improve operational effectiveness.

• Objectivity and Fresh Perspectives: Bestar offers an unbiased view and can identify opportunities or challenges that internal teams might overlook.

• Networking: Leverage our networks to connect with other valuable resources and partners.

In essence, Bestar acts as strategic partners, enabling businesses in Singapore to navigate its dynamic and competitive environment, achieve their goals, and sustain long-term growth.

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