In Singapore, the Goods and Services Tax (GST) is a major compliance requirement for businesses. Generally, a business must register for GST once its taxable turnover exceeds S$1 million. This is known as compulsory GST registration.
However, not every business that crosses the S$1 million threshold is required to register. There are specific exceptions, exemptions, and scenarios where a business can legally avoid GST registration—even when revenue exceeds S$1 million.
Understanding these scenarios is crucial for business owners, accountants, and corporate service providers to avoid unnecessary compliance burdens and to plan tax strategies more effectively.
This article explains in detail the conditions, exceptions, exemptions, and specific business situations where GST registration can be avoided, the relevant IRAS rules, and how business owners can determine whether they qualify.
1. Understanding the Types of Turnover: Taxable vs. Non-Taxable
To know whether GST registration is required, you must first understand what IRAS counts as “taxable turnover.”
There are two types of turnover:
1. Taxable Turnover
This includes:
- Standard-rated supplies (9% GST)
- Zero-rated supplies (0% GST, typically exports or international services)
2. Non-Taxable Turnover
This includes:
- Exempt supplies (e.g., financial services, sale/lease of residential property)
- Out-of-scope supplies (e.g., sales outside Singapore)
- Transfer of business as a going concern (TOGC)
- Purely overseas services with no link to Singapore (depending on rule)
Only taxable turnover counts toward the S$1 million threshold.
A business that crosses S$1 million in total revenue may actually have less than S$1 million taxable turnover, and therefore does not need to register for GST.
2. Scenario 1: When the Business Revenue Exceeds $1 Million But Taxable Turnover Does Not
This is the most common scenario.
Businesses with high revenue but mainly provide exempt supplies or out-of-scope supplies may legally skip GST registration.
Examples of businesses with mostly exempt supplies
- Financial service providers
- Moneylenders
- Forex brokers
- Investment companies
- Fund managers providing exempt financial services
- Insurance agents selling exempt insurance products
- Residential property owners or developers
- Landlords renting out HDB flats or condos
- Developers selling residential units
- Sale of precious metals (in certain forms)
If over 50–90% of revenue falls under exempt supply categories, the business may not meet the taxable turnover definition even when total revenue is large.
Examples of businesses with out-of-scope supplies
- Companies providing services entirely outside Singapore
- Exports of goods from Singapore to overseas locations
- Overseas branch operations where revenue is not tied to Singapore
Even if total revenue exceeds S$1 million, these supplies do not count toward GST registration.
Thus, a business crossing S$1 million in total revenue may not need to register if taxable turnover is below S$1 million.
3. Scenario 2: Businesses That Provide Only Zero-Rated Supplies Can Apply for Exemption
A business that only supplies zero-rated goods or services can apply for exemption from GST registration—even if taxable turnover exceeds S$1 million.
What are zero-rated supplies?
Zero-rated supplies include:
- Export of goods
- International services (where the beneficiary is overseas)
- Services consumed outside Singapore
- Freight transport of goods internationally
These services are taxable, but GST rate is 0%.
Why IRAS allows exemption
If a business only makes zero-rated supplies, it:
- Charges 0% GST
- Usually claims substantial input tax refunds
This may lead to continuous GST refund claims.
To reduce administrative load on both IRAS and the company, IRAS allows such businesses to apply for exemption from compulsory GST registration.
Conditions to qualify
- Nearly 100% of supplies must be zero-rated
- The business must apply for GST registration exemption
- IRAS must approve the exemption
Examples:
- International freight forwarding companies
- Export-focused wholesalers
- Software companies serving overseas clients
- Consulting firms with clients overseas
These businesses may generate tens of millions in revenue but still do not need to register for GST if they successfully apply for exemption.
4. Scenario 3: The Revenue Exceeds S$1 Million Only Temporarily (Not a Long-Term Trend)
If the business exceeds S$1 million due to a one-off event or temporary spike in sales, it may not need to register for GST.
IRAS looks at whether the business expects turnover to continue exceeding S$1 million over the next 12 months.
Examples of temporary revenue spikes
- A one-off project or contract
- A temporary surge in demand during peak season
- A single unusually large sale
- Short-term promotional success not likely to recur
- Covid/recovery-related spike in certain industries
What IRAS requires
The business must:
- Submit a Declaration of Future Turnover
- Provide documentation showing sales will fall below S$1 million going forward
If IRAS is convinced the business does not expect future turnover to exceed S$1 million, GST registration may not be required.
Supporting documents may include
- Forecasts
- Contracts ending soon
- Declining sales reports
- Evidence of seasonality
- Letters confirming no further business from certain clients
This is a valid exemption route for cyclical or project-based industries such as:
- Construction
- Event management
- Wholesale trading
- Creative and media production
- Consultancy with large one-off contracts
5. Scenario 4: The Business Is NOT Making Taxable Supplies in Singapore
A business may exceed S$1 million in revenue but still not be required to register if it does not make taxable supplies in Singapore.
Examples:
- A Singapore holding company earning only dividends
- A Singapore company billing clients overseas for services performed overseas
- A business whose activities are entirely outside Singapore
- A company with revenue from corporate actions such as sale of shares or disposal of investments
Income such as dividends, interest, or capital gains is not taxable turnover and does not trigger GST registration.
6. Scenario 5: Transfer of Business as a Going Concern (TOGC)
If a business crosses S$1 million in revenue because it acquired another business, the revenue from the acquisition does not count as taxable turnover for GST registration purposes.
IRAS considers TOGC transactions as out-of-scope supplies.
Thus, if a business crosses the threshold due to:
- Purchase of an existing business
- Transfer of assets under TOGC
- Merger or restructuring income
… this does not trigger GST registration.
7. Scenario 6: Specific Industries Where Exempt Supplies Dominate
Some sectors inherently make exempt supplies, so GST registration is often unnecessary no matter how high revenue grows.
Financial Services Industry
Exempt supplies include:
- Loan interest
- Forex transactions
- Issue or sale of shares
- Fund management fees (for qualifying funds)
- Insurance premiums (for certain policies)
Such businesses may have high revenue but almost zero taxable turnover.
Residential Property Industry
Exempt supplies include:
- Sale of residential property
- Rental income from residential units
Big developers, landlords, or property investors may exceed S$1 million easily but still not need to register.
Charities and Non-Profit Organisations (in certain cases)
If revenue is largely from:
- Donations
- Grants
- Exempt activities
…the organisation may avoid registration.
8. Scenario 7: Businesses Granted Exemption Under IRAS Discretion
In rare cases, IRAS may grant special exemptions when compulsory registration is not practical or does not align with economic intent.
Possible cases include:
- Businesses undergoing liquidation
- Dormant companies with one-off transactions
- Companies restructuring overseas operations
- Entities earning revenue from non-GST-related government funding
These are decided case-by-case.
9. Scenario 8: Overseas Companies With Significant Singapore Revenue But No Taxable Supplies
An overseas company may have more than S$1 million in revenue from Singapore clients but still not be required to register if:
- It does not provide services “in Singapore” based on the place-of-supply rules
- It only supplies zero-rated international services
- It only exports goods
- It bills from an overseas entity under reverse charge rules
Thus, revenue alone does not determine GST registration—the nature of supply and place of supply determine the requirement.
10. Scenario 9: Reverse Charge Rules Shift GST Responsibility to the Customer
Under Singapore’s reverse charge mechanism, certain businesses receiving services from overseas suppliers must self-account for GST.
This means:
- The overseas supplier does not need to register, even with large revenue
- The Singapore business must account for GST instead
So an overseas service provider may exceed S$1 million in revenue from Singapore clients but still is not required to register.
Examples:
- Overseas IT development firms
- SaaS platforms
- Offshore consulting agencies
- Overseas marketing firms
11. Summary of the Key Situations Where Registration Is Not Required
Below is a consolidated list of conditions where a business exceeding S$1 million in revenue does not need to register for GST:
✔ Revenue includes mainly exempt supplies
- Financial services
- Residential property sales/rental
- Investment income
✔ Revenue includes mainly out-of-scope supplies
- Overseas supplies
- Overseas branch income
- TOGC (transfer of business)
✔ Revenue includes mainly zero-rated supplies
→ Business can apply for exemption under Section 21
✔ Revenue spike is temporary and not expected to exceed S$1 million going forward
→ With IRAS approval
✔ Business makes no taxable supplies in Singapore
- Overseas services
- Dividends
- Capital gains
✔ Reverse charge makes customers account for GST
→ Supplier avoids GST registration
✔ Special circumstances granted by IRAS
→ Case-by-case basis
Conclusion
Crossing S$1 million in revenue does not automatically mean a business must register for GST in Singapore. What matters is the nature of the supplies, not just total revenue.
Businesses that generate mostly exempt, out-of-scope, or zero-rated supplies—or businesses with temporary turnover spikes—may legally avoid compulsory registration. Understanding these distinctions allows business owners to plan strategically, reduce administrative burden, and manage compliance risks.