GST guide for Shopify stores in Singapore

If you’re running a Shopify store in Singapore, then it’s crucial to understand how Goods and Services Tax (GST) operates in the country.

For those of you who have never heard of GST before, it’s good to remember that most other countries have a similar system called Value Added Tax, or VAT, so you can view GST as almost the same thing.

Singapore’s regulations give different rules depending on where your customers are located and if they are GST registered themselves.

This article will help you navigate these rules and configure taxes for your Shopify store correctly.

The key factor in deciding if you should charge GST is if your business is GST registered already.

You are required to register for GST if your taxable turnover in a 12-month rolling period exceeds SGD 1,000,000. It is not compulsory to register if your annual sales turnover is below this amount. You can also voluntarily register for GST whenever you want.

If your business is not GST registered, then you do not need to charge GST. It’s as simple as that.

If your business is GST registered, then you need to charge GST to some customers but not others. It all depends on where they’re located and whether they’re registered for GST themselves.

The rate of GST charged will depend on the type of goods or services you are selling and where your customers are located.

When selling to non-GST registered customers in Singapore, you should charge GST at the standard rate of 9%, unless your goods are zero-rated or exempt from GST.

For more information on what goods are exempt from GST, see the Inland Revenue Authority of Singapore (IRAS). If you want to see which goods are zero-rated, see IRAS - Customer Accounting for Prescribed Goods.

When selling to GST-registered businesses in Singapore, you should apply the reverse-charge mechanism. This means that you do not charge GST on your invoice. Instead, the responsibility for accounting for and paying the GST lies with the customer.

If you are selling goods or services from your Shopify store to customers outside of Singapore, these goods are zero-rated for GST..

This means that you charge GST at 0% on your invoices. Although your customer does not pay any GST, you can still claim input tax credits on the GST you've paid on business expenses. This reduces your overall GST liability. Make sure you keep detailed records of these expenses and include them in your GST returns.

If the physical delivery of the goods is from a place outside Singapore to another place outside Singapore, it is “out-of-scope supply” and no GST needs to be charged.

For more information on claiming input tax, see the IRAS - Conditions for Claiming Input Tax page.

When you configure your tax rates in your online store and Shopify generates a breakdown of the GST charged, Sufio can create valid invoices. Our compliance team will ensure your documents follow all of Singapore’s strict invoicing regulations.

You can generate invoices in multiple languages and include all the details needed to comply with global invoicing legislation.

Having the correct tax breakdown on invoices is essential to your bookkeeping and your tax purposes.