In Singapore, if you’re a GST-registered business and are not making the most of zero rated GST, you might be leaving money on the table without even realising it.
For businesses that export goods or serve overseas clients, knowing when the 0% GST rate kicks in can help you stay compliant and free up more cash for things that matter. Like staff salaries, rental, or your next hawker centre run.
This guide walks you through:
- What is zero rated GST
- When does it apply
- How to claim input tax properly, and more.
What is zero rated GST?
The zero rated GST is a part of the Goods and Services Tax (GST), which is a consumption tax charged on the supply of goods and services in Singapore.
Under Singapore’s GST system, taxable supplies are categorised as either:
- Standard-rated supplies, which are subject to the prevailing GST rate of 9%(as of 2024)
- Zero-rated supplies, which are subject to GST at 0%
What are zero-rated supplies?
Zero-rated supplies refer to taxable goods or services that are charged GST at 0%. While GST is not collected from customers for these supplies, the business can still claim input tax on purchases and expenses related to making those supplies.
This treatment is especially useful for businesses involved in international trade or cross-border services. Zero-rated supplies currently include:
- Exported goods
- International services, as defined under Section 21(3) of the GST Act
Zero-rated vs exempt supplies – What’s the difference?
At first glance, zero-rated and exempt supplies might seem like the same thing. But they are not. Here’s how they differ:
Zero-rated supplies
When you make a zero-rated supply, you charge GST at 0%. That means your customer doesn’t pay any GST, but you, the business owner, still get to claim input tax on your expenses.
It’s a bit like being allowed to skip the bill but still get cashback. Not bad.
This is super helpful if you’re:
- Shipping goods out of Singapore
- Providing services to overseas clients
Let’s say you’re a Singapore-based marketing agency helping a UK company launch a campaign in Europe. You won’t charge them GST, but you can still claim GST on your ad spend, laptops, or even your kopi meetings with designers.
Exempt supplies
Exempt supplies, on the other hand, are GST-free. But there’s a catch. You can’t claim input tax on related business expenses. That’s right, zero in, zero out.
GST-exempt supplies usually include:
- Financial services like issuing loans or managing bank accounts
- Renting out residential properties
- Selling digital payment tokens (hello, crypto)
- Supplying investment-grade gold, silver, or platinum
Picture this: you’re leasing out a condo unit in Katong. No GST is charged to the tenant, and unfortunately, you can’t claim GST on that new sofa set or aircon repair either. It’s like bringing food to a potluck and not being allowed to eat.
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What counts as a zero-rated supply?
In Singapore, the 0% GST rate applies to two main types of supplies:
- Exported goods
- International services (as defined under Section 21(3) of the GST Act)
Let’s make it simple.
Exported goods
You can apply 0% GST if the goods are sold to an overseas customer and exported out of Singapore. You’ll need proof that the goods were shipped, like an export permit or airway bill.
Let’s say you sell stationery to a client in Australia and ship it out. No GST is charged, and input tax is still claimable.
If your customer collects the goods in Singapore and handles the export, you’ll usually need to charge GST. However, if you have documents that prove the goods were exported within sixty days, you may still apply the 0% rate.
International services
Not every overseas client means you can apply 0% GST. The service must meet IRAS rules. In short, the service must benefit a person outside Singapore.
Here are a few examples that often qualify:
- Consulting or advisory services provided to overseas clients
- Digital marketing or web development for foreign companies
- Leasing equipment used outside Singapore
- Freight and logistics services for goods shipped internationally
- Air and sea transport services
- Services performed entirely outside Singapore
- Work done on goods that are subsequently exported
Say you’re a Singapore-based UX designer hired by a client in Canada. If they have no business presence in Singapore and all other conditions are met, your service can be zero-rated.
Just confirm that your client is considered overseas for GST purposes. If they are, and your service fits the criteria, zero-rating may apply.
How to claim input tax on zero-rated supplies
One of the biggest perks of making zero-rated supplies is that you still get to claim input tax. Even if you charge 0% GST on your sales, you can recover the GST paid on business expenses related to those sales.
This can include costs like raw materials, shipping, marketing services, software, or professional fees. As long as the expense is directly tied to your zero-rated supply, you can claim input tax on it.
What you need to claim
To claim input tax, make sure you:
- Are GST-registered
- Use the goods or services for business purposes
- Have valid tax invoices from GST-registered suppliers
- Keep proper records and documents
- Submit your GST return correctly and on time
Input tax can only be claimed if the supply is truly zero-rated. If it does not meet IRAS conditions, the claim may be rejected.
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Keep the right documents
Good documentation is everything. Make sure you hold on to:
- Invoices and receipts from your suppliers
- Export documents for goods
- Contracts or written agreements for overseas services
- Proof of payment
Claiming input tax is a great way to lower your GST bill. But it only works if your paperwork is clean and your records are in place.
Claiming a GST refund when input tax is more than output tax
If your business makes mostly zero-rated supplies, there’s a good chance your input tax (GST on your expenses) is higher than your output tax (GST on your sales). In simple terms, you have spent more on GST than you’ve collected. The good news? You can apply for a refund from IRAS.
This is common if:
- You export goods
- You provide services to overseas clients
- You have high GST costs on local purchases like rent, software, or logistics
How to get a GST refund
Step 1: File your GST F5 return
There’s no separate refund form. Just submit your regular GST F5 return through the IRAS myTax Portal. Make sure everything is complete and accurate.
Step 2: Input tax > Output tax
If your input tax (the GST you paid on business expenses) is more than the output tax you collected, IRAS will process the difference as a refund, provided you’ve met all the conditions.
Step 3: Refund is credited
Once approved, the refund amount is credited directly to your business bank account. Timing may vary, but clean records usually mean faster processing.
What does IRAS check before approving?
To avoid delays or rejections, make sure:
- Your zero-rated supplies clearly qualify under GST rules
- You’ve kept proper documentation (like invoices, contracts, export permits)
- Your GST return matches the documents and reported transactions
IRAS may follow up if things look inconsistent, vague, or poorly documented. Refunds are a benefit, but not guaranteed.
What’s the current GST rate in Singapore?
As of 1 January 2024, the standard Goods and Services Tax (GST) rate in Singapore is 9%. This rate applies to most taxable goods and services supplied within the country.
Here’s a quick timeline of recent GST changes:
- 7% until 31 December 2022
- 8% throughout 2023
- 9% from 1 January 2024 onward
The increase was part of a two-step adjustment announced by the government to support healthcare and social spending in the long term.
Does the rate change affect zero-rated supplies?
Not directly. Zero-rated supplies still carry a 0% GST rate, regardless of the current standard rate. That includes:
- Exported goods
- International services that meet IRAS conditions
But it does mean your input tax (the GST you pay on business purchases) is now higher. So if you’re GST-registered and making zero-rated supplies, your input tax refunds could be more valuable than before.
For example, if you previously claimed $7 of GST on a $100 expense, that same cost now gives you $9 in input tax.
Compliance tips for zero-rated supplies
Claiming 0% GST and input tax is great, but only if your records hold up. IRAS expects clean documentation and accurate reporting, especially when you’re not charging GST on your sales.
Here’s how to stay compliant:
1. Keep all supporting documents
Hold onto invoices, contracts, payment proofs, shipping documents, and any written instructions related to zero-rated transactions. If you can’t show it, IRAS won’t accept it.
2. Check your customer’s belonging status
For international services, confirm that the customer is based outside Singapore. This matters when deciding if your service qualifies for 0% GST.
3. Match input tax to zero-rated sales
Only claim input tax if the expense is clearly linked to your zero-rated supply. If it’s unrelated or personal, don’t claim it.
4. File on time
Late GST returns may lead to penalties and delayed refunds. Sleek’s GST filing service can help keep you on schedule.
5. Be consistent across invoices and returns
Make sure the GST treatment on your invoice matches what you report in your F5 return. If you zero-rate something, you should have the documents to back it up.
6. Review IRAS guides regularly
IRAS updates their rules from time to time. Bookmark the guides on exports and international services. They’re more readable than you might expect.
How Sleek helps with 0% GST compliance
Handling exports or international services? The 0% GST rate can benefit your business, but only if your claims and records meet IRAS standards.
Sleek’s GST services can benefit you. With our team of local GST experts, we help you apply the 0% rate correctly, manage input tax claims, and stay fully compliant.
Here’s what Sleek can handle for you:
- GST advisory – Review of your supplies to confirm eligibility for 0% GST
- Input tax validation – Ensure expense claims are linked to zero-rated activity
- Filing support – Accurate and timely filing of GST returns
- Documentation checks – Help maintain the records IRAS expects
Whether you’re new to zero-rated GST or refining your process, Sleek gives you the structure and expertise to stay on track.
Unsure if your 0% GST claims are correct?
Frequently asked questions about zero rated GST
How do I know if my service qualifies for the 0% GST rate?
Your service must meet conditions set out in Section 21(3) of the GST Act. It usually applies when the service benefits a person outside Singapore. You’ll also need to determine your customer’s belonging status and keep proper documentation.
Can I claim input tax on zero rated supplies?
Yes, if your business is GST-registered and your supply qualifies as zero rated, you can claim input tax on related business expenses like rent, logistics, software, or professional services.
Is renting a residential property zero rated?
No. Residential rental is considered an exempt supply, not zero rated. This means you can’t charge GST, and you also can’t claim input tax on related costs like furnishings or renovations.
What happens if I file my GST return late?
Late filing can delay refunds or lead to IRAS penalties. To avoid this, ensure your GST returns are filed on time, or use a service provider like Sleek to manage filings for you.
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