When a GST-registered company stops trading or is being closed, it must apply to cancel its GST registration within 30 days of ceasing to make taxable supplies, and then file a final GST return, the GST F8. Until the cancellation takes effect, the company must keep charging GST and filing returns. In the final return it must also account for GST on business assets it still holds on the last day of registration, such as equipment, vehicles, non-residential property and unsold stock, if their total open market value exceeds S$10,000. Companies that close without doing this are left with estimated assessments, penalties and a GST debt that can block a strike-off.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
Close the GST account properly before you close the company. ACRA expects a company applying to strike off to have no outstanding issues with any government agency. An open GST registration with unfiled returns is exactly that kind of issue, and late returns attract penalties every month. Cancel on time, file the F8 accurately, and pay what is due.
When cancellation is compulsory
IRAS’s page on cancelling GST registration says a business must apply within 30 days when:
- it has stopped making taxable supplies and does not intend to make any in future;
- the business has ceased;
- the business is transferred as a whole to someone else; or
- the form of the business entity has changed, for example from a sole proprietorship to a private limited company.
A business that is simply smaller may also apply voluntarily if it is no longer liable to be registered, but one that registered voluntarily must stay registered for at least 2 years.
The steps
- Apply on myTax Portal. The person authorised to file GST returns applies online. IRAS says most applications are approved the same day, and some take 1 to 10 working days.
- Note the effective date. The company keeps all its GST obligations until the last day of registration, the day before the effective date.
- Stop charging GST from the effective date. IRAS says it is an offence to charge or collect GST after cancellation. Pre-printed tax invoices must be marked as cancelled.
- File every outstanding GST return and pay any GST due.
- File the final GST F8 within one month from the end of the period stated on it.
What goes into the final return
- Output tax on assets held on the last day. If the total open market value of assets on which input tax was claimed (and assets received as part of a going-concern transfer) exceeds S$10,000, GST is due on that value at the prevailing rate. This covers fixed assets, non-residential property and unsold inventory. IRAS’s example shows equipment worth S$120,000 and a property worth S$1,000,000 giving output tax of S$100,800 at 9%.
- Supplies spanning the cancellation date. Goods delivered or services performed before cancellation but invoiced or paid afterwards must be accounted for in the F8.
- No output tax on assets if their total value is S$10,000 or less, or the whole business was transferred as a going concern to another GST-registered person.
Planning the order of a closure
The order matters. Selling or disposing of assets while still registered means charging GST on those sales in the normal way; keeping them until the last day means accounting for GST on their open market value in the F8. Either way, the company needs the cash to pay the GST. Plan the asset disposals, the cancellation date and the final accounts together. Once the GST and corporate tax positions are clear, the company can choose between striking off and a winding up. See how to strike off a company and the cost to close a company.
Example
Example only, not a client case. A GST-registered retailer closes its shop on 30 June. It sells most of its stock in a closing sale, charging GST as usual, and applies to cancel registration within 30 days. On the last day of registration it still holds shop fittings and stock with an open market value of S$14,000, on which it had claimed input tax. Because the total exceeds S$10,000, it accounts for output tax on S$14,000 in its final F8, files the F8 within a month of the end of the period, and pays. Only then does it apply to strike off.
Frequently asked questions
We stopped trading months ago and never cancelled. What now?
File the outstanding returns, including nil returns, apply to cancel, and file the F8. Expect late submission penalties for the missed returns. See overdue GST returns.
Can we object if IRAS refuses or backdates the cancellation?
IRAS lists registration and deregistration among the decisions that can be objected to, in writing and within the stated time limit.
Does cancelling GST registration close the company’s corporate tax file?
No. Corporate income tax returns are still required until the company is struck off or dissolved. For companies being wound up, see tax obligations in a liquidation.
More on the tax and GST hub.
Closing a GST-registered company?
If your company has stopped trading or is planning to close, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133. We will plan the cancellation date, prepare the outstanding GST returns and the final GST F8, file the final tax returns and handle the strike-off. This article is general information, not tax advice.
Kevin Yeo, Raffles Corporate Services