The new GST hike will kick in by January 2023 – and it is vital that your business is prepared to handle this change. Failure to comply or delaying your preparation might result in devastating financial losses that could have easily been avoided. IRAS, for example, may fine businesses up to $10,000 and a penalty of 10% of the tax due for businesses that are late or failed to register for GST. It’s essential therefore to understand the key steps you need to take to ensure you don’t unknowingly run foul of the law.  Here’s how:

1. Have a clear understanding of whether you need to register for GST or not

It’s true that keeping up with the most recent legal requirements and doing mathematical calculations can be laborious. It’s simple to overlook the little things that could end up costing your company money. Getting a second set of eyes might be beneficial. To reduce their tax liability, businesses might participate in tax planning. This can involve planning commercial transactions to occur at the best possible times, maximizing tax exemptions and deductions, and reorganizing the business to minimize taxes.

The company’s overall business goals and compliance with tax rules should be carefully considered before implementing these tactics, even though they can assist save corporation tax. Seeking advice from a financial counselor or tax specialist is always a smart idea.

2. What goods and services are actually taxable?

Not rated at all? Typical rated? Not included? What does this all mean and how can you know which category your company comes under?

Standard-rated supplies are the ones that are GST chargeable at 8%. Zero-rated supplies on the other hand incur no GST. As such, if you’re a GST-registered company, you’ll charge 0% GST on your supplies – but you can claim GST paid on your purchases to make those supplies. This usually applies to the export of goods and international services.

Exempt supplies also incur no GST. The company will not charge any GST on exempt supplies, and, unlike a Zero-rated supply, they also cannot claim GST incurred on goods or services used in the process of making these exempt supplies. Such services usually include the sale and lease

3. Hire an accountant to help facilitate a smooth transition to the new GST rate

It’s challenging enough to run a business, let alone worry about the minutiae involved in making sure you’re adhering to legal standards. We already know that huge fines and unforeseen penalties result from improperly accounting for GST supply at the appropriate rate. So why not use a professional to handle everything rather than worrying about these specifics?

A competent accountant understands the complexities of business operations and may take the appropriate measures to prevent financial catastrophes, but tax liabilities and fines can seriously impair your finances. For example, an accountant can assist you with maintaining compliance with record-keeping requirements and manage the shift as you go with implementing