This is where most of the confusion happens, and it’s worth walking through properly rather than treating it as a footnote. GST applies to “taxable supplies” — but a significant amount of legitimate business activity simply falls outside that definition entirely. There are three distinct situations, and they’re not interchangeable.

1. Out-of-Scope Supplies — Not GST at All

These are transactions that fall outside Singapore’s GST system entirely — not taxed at 0%, simply not in scope. You don’t charge GST on them and don’t report them on your GST return at all. Common examples:

• Goods sold and delivered directly between two overseas locations, never entering Singapore — e.g. a Singapore company sells goods manufactured in Vietnam directly to a customer in Japan, with the goods never touching Singapore soil
• Sales of overseas goods within a Free Trade Zone or Zero-GST Warehouse
• Private, non-business transactions

This is the category most relevant to foreign-owned companies using Singapore as a regional base without local delivery — if your goods or services never actually land in or are consumed in Singapore, GST may simply not apply to that revenue stream.

2. Exempt Supplies — Specifically Excluded by Law

These are supplies the GST Act specifically carves out. Unlike out-of-scope supplies, exempt supplies are still “in the system” conceptually — but no GST is charged on them, and importantly, you generally can’t claim input tax credits on purchases related to making them. Main categories:

• Most financial services — loan and mortgage interest, life insurance policies, financial derivatives
• Sale or long-term lease of residential property
• Supply of investment precious metals (gold, silver, platinum meeting specific purity/form criteria)
• Digital payment tokens (e.g. certain cryptocurrency transactions)

3. No Local Taxable Turnover — the Offshore Business Scenario

This is the one that matters most for genuinely offshore-oriented structures, and it’s worth stating plainly: when IRAS calculates whether you’ve crossed the S$1 million registration threshold, exempt supplies, out-of-scope supplies, and proceeds from selling capital assets are all excluded from that calculation. A company can have substantial global revenue and still have zero — or near-zero — Singapore taxable turnover, if its actual activity is genuinely offshore (holding structures, regional coordination, or services and goods that never touch or aren’t consumed in Singapore). In that situation, GST registration simply isn’t triggered, regardless of the company’s overall size. This is a common structure for offshore companies using Singapore as a base — but it depends entirely on the actual nature of your supplies, not just an intention to “operate offshore,” so it’s worth confirming your specific structure with an advisor rather than assuming it automatically applies.

Existing IRAS Exemption From Registration (a separate, narrower rule)

Distinct from the above: if your business already exceeds the S$1 million threshold but more than 90% of your total taxable supplies are zero-rated (see below) and your input tax exceeds your output tax, you can apply to IRAS for an exemption from registration — avoiding the administrative burden of quarterly filing despite technically crossing the threshold.