Goods and Services Tax (GST) applies to most goods and services supplied in Singapore, but not every transaction is subject to the standard 9% GST rate.

Certain supplies are specifically exempt from GST.

So, what is GST exemption in Singapore?

In simple terms, a GST-exempt supply is a supply on which GST does not need to be charged because the transaction falls within a category specifically exempted under Singapore’s GST framework.

According to the Inland Revenue Authority of Singapore (IRAS), the main categories of exempt supplies include:

• Certain financial services
• The supply of digital payment tokens
• The sale and lease of residential properties
• The import and local supply of qualifying investment precious metals

GST does not need to be charged on these exempt supplies.

However, GST exemption should not be confused with zero-rated GST, being non-GST registered, or an out-of-scope transaction. These categories have different GST treatments and can have different consequences for a business’s ability to claim input tax.

Understanding these differences is particularly important for businesses involved in property, finance, investments and businesses making a combination of taxable and exempt supplies.

This guide explains how GST exemption works in Singapore, which transactions may qualify and how exempt supplies can affect GST accounting.

What Does “GST Exempt” Mean?

A GST-exempt supply is a transaction that is specifically exempted from GST.

Suppose a GST-registered company normally provides taxable services.

If it charges:

Service fee: $10,000

GST at 9%: $900

Total: $10,900

the $900 represents output GST.

Now imagine that the company makes a transaction that qualifies as an exempt supply under Singapore’s GST rules.

If the transaction is genuinely exempt, the business does not add 9% GST simply because it is GST-registered.

This illustrates an important principle:

Being GST-registered does not mean every transaction made by the business automatically attracts 9% GST.

The nature of the supply matters.

What Are the Main GST-Exempt Supplies in Singapore?

IRAS broadly identifies four main categories of exempt supplies:

Financial services

Digital payment tokens

Sale and lease of residential properties

Import and local supply of investment precious metals

Each category has specific rules.

A transaction should not be treated as exempt merely because it appears broadly related to finance, property, cryptocurrency or precious metals.

The transaction needs to fall within the relevant GST exemption provisions.

1. Financial Services

Certain financial services are exempt from GST in Singapore.

IRAS explains that the Fourth Schedule to the GST Act provides the relevant list of exempt financial services.

Examples can include certain activities involving:

• Exchange of currency
• Loans and advances
• Debt securities
• Equity securities
• Certain derivatives
• Other prescribed financial transactions

This area requires care because not every service connected with the financial industry is exempt.

For example, there can be a difference between actually providing an exempt financial service and providing professional or intermediary services connected with a financial transaction.

IRAS specifically notes that services such as arranging or broking insurance, underwriting, or advising on financial activities do not automatically fall within the financial-services exemption. Such services may instead be taxable, unless another GST treatment such as zero-rating applies.

Therefore:

Financial transaction ≠ automatically GST exempt

The precise nature of the service must be considered.

2. Sale and Lease of Residential Property

Another important GST exemption applies to residential property.

IRAS states that the sale and lease of residential properties in Singapore are exempt from GST.

This has major practical implications.

Suppose a GST-registered business owns a residential property and makes an exempt supply through its sale or lease.

GST generally does not need to be added to the exempt residential component merely because the seller or landlord is GST-registered.

However, this rule should not be extended to all property.

Residential vs Commercial Property

Commercial and industrial property are generally treated differently.

IRAS states that the sale and lease of non-residential properties are subject to GST when supplied by a GST-registered person in the relevant circumstances.

Therefore:

Residential property — generally exempt

Non-residential property — generally taxable

This distinction is very important for property owners, investors and businesses.

For example, the GST treatment of an office unit can be different from the treatment of a residential condominium.

Furniture and Fittings

There can also be situations where the underlying residential property transaction is exempt but other items supplied with the property have a different GST treatment.

IRAS states that GST is chargeable on the supply of movable furniture and fittings in both residential and non-residential properties.

Therefore, businesses dealing with property should not simply assume that everything connected with a residential property transaction is exempt.

3. Digital Payment Tokens

Singapore also provides GST exemption for qualifying supplies involving digital payment tokens (DPTs).

The treatment took effect from 1 January 2020.

IRAS provides criteria determining whether a digital asset qualifies as a digital payment token for GST purposes.

Examples given by IRAS include cryptocurrencies such as Bitcoin, Ether and Litecoin, where the relevant characteristics are satisfied.

Certain transactions involving qualifying digital payment tokens are exempt.

For example, IRAS states that the exchange of digital payment tokens for fiat currency or other digital payment tokens is an exempt supply.

The provision of loans of qualifying digital payment tokens may also constitute an exempt supply in relevant circumstances.

However, using a digital payment token to buy ordinary goods or services does not mean those underlying goods or services become GST exempt.

Suppose a customer uses Bitcoin to purchase software from a GST-registered Singapore business.

The use of Bitcoin as payment does not automatically make the software GST exempt.

The GST treatment of the software itself still needs to be considered.

4. Investment Precious Metals

Another GST exemption concerns qualifying investment precious metals, commonly abbreviated as IPM.

The exemption can apply to qualifying investment:

• Gold
• Silver
• Platinum

However, not every gold, silver or platinum product qualifies.

IRAS has specific criteria determining whether precious metals qualify as investment precious metals.

Qualifying forms can include certain bars, ingots, wafers and prescribed coins that meet the necessary requirements.

The importation and local supply of qualifying IPM are exempt from GST.

This is important because someone purchasing qualifying investment gold may receive different GST treatment from someone purchasing ordinary gold jewellery.

Gold Jewellery Is Not Automatically GST Exempt

This is a common misunderstanding.

People sometimes hear that “gold is GST exempt” and assume that every gold product can be sold without GST.

That is incorrect.

The exemption concerns qualifying investment precious metals.

A gold necklace, bracelet or decorative item does not automatically become GST exempt merely because it contains gold.

Similarly, precious-metal products that do not satisfy the qualifying IPM criteria remain subject to the relevant normal GST treatment.

GST Exempt vs Zero-Rated: What Is the Difference?

This is one of the most important concepts for business owners.

Both exempt supplies and zero-rated supplies can result in no GST being collected from the customer, but they are not the same.

Zero-Rated Supply

A zero-rated supply is still a taxable supply.

GST applies at:

0%

Common examples can include qualifying:

• Exports of goods
• International services

Suppose a Singapore GST-registered company exports qualifying goods worth $100,000.

The supply may be zero-rated.

Sales value: $100,000

GST at 0%: $0

Total: $100,000

Even though no GST is collected, it remains a taxable supply.

Exempt Supply

An exempt supply is specifically exempted from GST.

Examples include qualifying:

• Financial services
• Residential property sales and leases
• Digital payment token transactions
• Investment precious metals

This difference matters particularly when considering input tax recovery.

Why Input Tax Matters

Input tax is GST incurred by a GST-registered business on its business purchases and expenses.

Suppose a business purchases professional services:

Fee: $10,000

GST: $900

Total: $10,900

If the business uses those services to make taxable supplies and satisfies the relevant input-tax conditions, the $900 may generally be claimable as input tax.

However, the position becomes different where the expenditure is incurred to make exempt supplies.

IRAS states that input tax incurred in making exempt supplies is generally not claimable unless the applicable partial-exemption rules permit the claim.

This is one of the major practical differences between exempt and zero-rated supplies.

Example: Zero-Rated Business

Suppose ABC Export Pte Ltd exports goods overseas.

Sales: $1,000,000

GST charged: $0 because the qualifying exports are zero-rated.

The company incurs substantial Singapore GST on:

• Warehouse rental
• Accounting services
• Equipment
• Local suppliers
• Professional fees

Because zero-rated supplies remain taxable supplies, qualifying input tax may generally remain recoverable, subject to the normal conditions.

Therefore, charging customers 0% GST does not necessarily mean the business loses its input tax claims.

Example: Exempt Business

Now suppose another business makes exempt financial supplies.

The company incurs GST on expenses directly related to making those exempt supplies.

The treatment can be different.

Input tax directly attributable to exempt supplies is generally not recoverable unless a specific rule permits recovery.

Therefore, GST exemption can create a real cost to the business.

This is why understanding whether a transaction is zero-rated or exempt is extremely important.

What Is Partial Exemption?

A business may make both taxable and exempt supplies.

Such a business can become what is commonly described as a partially exempt business.

For example, suppose a company has:

Taxable supplies: $900,000

Exempt supplies: $100,000

The company also incurs GST on expenses supporting its overall business.

It may not automatically be entitled to claim every dollar of input tax.

The business may need to determine:

• Input tax directly attributable to taxable supplies
• Input tax directly attributable to exempt supplies
• Residual input tax relating to both activities

The residual input tax may need to be apportioned according to the applicable rules.

What Is the De Minimis Rule?

Singapore’s GST framework provides a De Minimis Rule that can allow a business with relatively small amounts of exempt supplies to claim input tax that might otherwise be restricted.

According to IRAS, the De Minimis Rule is satisfied when the value of exempt supplies is both:

Not more than an average of $40,000 per month

and

Not more than 5% of the total value of taxable and exempt supplies during the relevant period.

Both tests need to be satisfied.

When the De Minimis Rule is satisfied, IRAS states that the business may claim its input tax, including input tax incurred in making exempt supplies, except for input tax that is otherwise specifically disallowed.

The business may still need to perform the relevant longer-period adjustment.

Example of the De Minimis Rule

Suppose a GST-registered company has, during a three-month accounting period:

Standard-rated supplies: $2,080,000

Zero-rated supplies: $300,000

Exempt supplies: $120,000

Total supplies: $2,500,000

Average exempt supplies per month:

$120,000 ÷ 3 = $40,000

Percentage of exempt supplies:

$120,000 ÷ $2,500,000 × 100 = 4.8%

The exempt supplies do not exceed an average of $40,000 per month and represent no more than 5% of total taxable and exempt supplies.

In the example provided by IRAS, the De Minimis Rule is therefore satisfied and the relevant input tax is provisionally claimable, subject to the applicable rules and exclusions.

Does GST Exemption Mean the Business Does Not Need to Register for GST?

Not necessarily.

This is another area where terminology causes confusion.

A business can be GST-registered while making exempt supplies.

For example, a business might make:

• Standard-rated supplies
• Zero-rated supplies
• Exempt supplies

within the same business.

Whether a business needs to register for GST depends on the applicable GST registration rules and the nature and value of its supplies.

Therefore:

GST-exempt transaction

does not mean the same thing as:

Non-GST-registered company.

These are completely different concepts.

GST Exempt vs Non-GST Registered

Suppose Company A is not GST-registered.

It sells ordinary consulting services for $10,000.

It does not charge GST because it is not GST-registered.

The consulting service itself is not necessarily an exempt supply.

Now suppose Company B is GST-registered but makes a transaction that qualifies as an exempt financial service.

Company B does not charge GST on that transaction because the supply itself is exempt.

Both invoices may show no GST, but the reason is different.

This distinction is important for accounting and GST reporting.

GST Exempt vs Out-of-Scope

Another category is out-of-scope supplies.

Out-of-scope transactions are not the same as exempt supplies.

IRAS gives examples such as certain sales where goods are delivered from one overseas location to another overseas location and private transactions.

These transactions fall outside the scope of Singapore GST in the relevant circumstances.

By comparison, exempt supplies fall within specifically prescribed categories that Singapore’s GST legislation exempts.

Therefore, businesses should avoid treating the terms:

Exempt

Zero-rated

and

Out-of-scope

as interchangeable.

They represent different GST classifications.

Quick Comparison of GST Treatments

Consider four different transactions.

Standard-Rated Supply

Local consulting service: $10,000

GST at 9%: $900

Customer pays: $10,900

Zero-Rated Supply

Qualifying exported goods: $10,000

GST at 0%: $0

Customer pays: $10,000

The transaction remains a taxable supply.

Exempt Supply

Qualifying exempt financial service: $10,000

GST: Not charged because the supply is exempt.

Out-of-Scope Supply

A qualifying transaction outside the scope of Singapore GST.

GST is not charged because the transaction falls outside the scope of Singapore GST.

Although the last three examples may all result in no 9% GST being collected, their legal and accounting classifications are different.

How Are Exempt Supplies Reported in a GST Return?

Being exempt does not necessarily mean the transaction disappears from GST reporting.

IRAS states that exempt supplies need to be reported in Box 3 — Total Value of Exempt Supplies of the GST return.

Therefore, a GST-registered business should properly classify exempt transactions in its accounting system.

The business should not simply record every no-GST transaction using one generic “0% GST” code.

Accounting software may provide separate tax codes for:

• Standard-rated supplies
• Zero-rated supplies
• Exempt supplies
• Out-of-scope transactions

Using the correct code helps ensure that the GST return is prepared correctly.

How Should GST-Exempt Sales Be Recorded in Accounting?

Suppose a company makes an exempt supply worth $50,000.

A simplified accounting entry might be:

Debit: Accounts Receivable — $50,000

Credit: Revenue / Relevant Income — $50,000

There is no $4,500 output GST because the transaction is exempt.

However, the business should still classify the transaction appropriately so that the exempt supply can be included in the correct section of its GST reporting.

The more complicated issue usually concerns the GST incurred on expenses associated with earning that $50,000.

The business needs to determine whether the related input tax is claimable under Singapore’s input-tax and partial-exemption rules.

Common GST Exemption Mistakes

Businesses should avoid several common misunderstandings.

Assuming “No GST” Means “Exempt”

Not necessarily.

A transaction could be zero-rated, exempt, out-of-scope or made by a supplier that is simply not GST-registered.

Treating Exports as Exempt

Qualifying exports are generally zero-rated, not exempt.

That distinction can significantly affect input tax recovery.

Treating All Property as Exempt

Residential property is generally exempt, while non-residential property is generally subject to GST when supplied by a GST-registered person in the relevant circumstances.

Treating All Financial Services as Exempt

Only financial services falling within the applicable exemption provisions qualify.

Advisory, arranging or professional services connected with finance may have a different GST treatment.

Treating All Gold as Exempt

Only qualifying investment precious metals meeting the relevant criteria qualify for the exemption.

Jewellery and other non-qualifying precious-metal products do not automatically receive exempt treatment.

Ignoring Input Tax Consequences

Businesses sometimes focus entirely on whether they need to charge GST to customers.

For partially exempt businesses, the bigger financial issue may be whether GST incurred on their expenses can be recovered.

Frequently Asked Questions About GST Exemption

What Does GST Exempt Mean?

A GST-exempt supply is one on which GST does not need to be charged because the supply falls within a category specifically exempted under Singapore’s GST framework.

What Are the Main GST-Exempt Supplies in Singapore?

The main categories identified by IRAS are certain financial services, supplies of digital payment tokens, sale and lease of residential properties, and the import and local supply of qualifying investment precious metals.

Is Residential Rent Subject to GST?

The lease of residential property is generally exempt from GST. However, separate supplies of movable furniture and fittings can have a different GST treatment.

Is Commercial Property GST Exempt?

Generally, no. The sale and lease of non-residential property by a GST-registered supplier are generally subject to GST.

Are Exports GST Exempt?

Qualifying exports are generally zero-rated, rather than exempt.

What Is the Difference Between Zero-Rated and Exempt?

A zero-rated supply remains a taxable supply but GST applies at 0%. An exempt supply is specifically exempt from GST.

The distinction is particularly important for input tax recovery.

Can a GST-Registered Company Make Exempt Supplies?

Yes.

GST registration does not mean every transaction made by a business must have 9% GST added.

Can I Claim GST on Expenses Used to Make Exempt Supplies?

Generally, input tax attributable to exempt supplies is not claimable unless the applicable partial-exemption rules allow it. The De Minimis Rule can permit recovery in certain circumstances.

What Is the GST De Minimis Rule?

Broadly, the value of exempt supplies must be no more than an average of $40,000 per month and no more than 5% of the total value of taxable and exempt supplies during the relevant period.

Understanding GST Exemption in Singapore

So, what is GST exemption?

GST exemption means that a particular supply falls within a category for which Singapore GST does not need to be charged.

The principal categories of exempt supplies include certain:

Financial services

Digital payment token transactions

Sales and leases of residential property

Imports and local supplies of qualifying investment precious metals

However, businesses need to look beyond the simple question of whether they should charge 9% GST.

Correct GST accounting requires businesses to determine whether each transaction is:

Standard-rated

Zero-rated

Exempt

or

Out-of-scope

These classifications can affect both the GST charged to customers and the GST the business can recover on its expenses.

This becomes particularly important for businesses making a mixture of taxable and exempt supplies.

A company earning a small amount of exempt income alongside its normal taxable business may potentially satisfy the De Minimis Rule.

A business with substantial exempt activities, however, may need to perform partial-exemption calculations and restrict some of its input tax claims.

For Singapore SMEs, accurate transaction classification and bookkeeping are therefore essential.

Simply selecting “No GST” in accounting software is not necessarily sufficient. The reason GST is not charged matters.

Koh Management Pte Ltd provides accounting, bookkeeping, GST and taxation support for Singapore businesses, together with corporate secretarial and company incorporation services.

For businesses dealing with exempt and taxable transactions, maintaining properly classified accounting records can make GST return preparation and input tax reconciliation considerably easier.

The key takeaway is simple:

GST exemption does not mean that a business is exempt from the entire GST system. It means that a particular type of supply is specifically exempt from GST.

Understanding that distinction can help Singapore businesses charge GST correctly, classify their transactions accurately and avoid errors when preparing their GST returns.