In Budget 2022, the Minister for Finance announced that the GST rate will be increased from:
- 7% to 8% with effect from 1 Jan 2023; and
- 8% to 9% with effect from 1 Jan 2024.
The factors determining which GST rate is to be applied in your invoicing are:
- when payment is received from your customer
- when goods are delivered/ services are performed for your customer.
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
If you are a GST-registered business that is subject to reverse charge (“RC business”), you must account for GST at 9% on the services you procure from overseas suppliers (“imported services”) on or after 1 Jan 2024.
However, the special transitional rules for supplies that spanned the first change of rate from 7% to 8% will similarly apply to supplies that span the second change of rate from 8% to 9%.
Failure to account for GST on your supplies at the correct rate may attract penalties. Being prepared for GST rate change will help you avoid such increases to your business and compliance costs.
Diacron expertise can help you understand the implications and guide you through an efficient and effortless update to the new GST requirements, ensuring compliance.
Contact us at info@diacrongroup.com
Source: IRAS.gov.sg