Most SaaS founders in Singapore assume they're exempt from GST because their product lives in the cloud. That assumption costs money. GST applies to digital services supplied to Singapore customers, regardless of where your servers sit. Offshore incorporation does not shield you. This is the first of three structural decisions—GST treatment, contract term length, and billing frequency—that determine how much cash you actually see and when you see it. GST on subscriptions: the offshore trap Singapore's Goods and Services Tax (GST) is 9%. It applies to digital services supplied to a customer whose place of establishment is in Singapore. 'Offshore' means nothing to IRAS (Inland Revenue Authority of Singapore). If your customer has a Singapore address and uses your service here, you owe GST on the full contract value. The trap: most invoicing software defaults to either zero-rating everything (wrong) or charging GST to everyone (also wrong). You need to check each customer's jurisdiction before invoicing. If your customer is GST-registered: You charge GST on the invoice. They claim it back as input tax. You remit the difference to IRAS quarterly. If your customer is not GST-registered: You still charge GST. They absorb it. (This is why many small Singapore businesses balk at SaaS contracts.) If your customer is overseas: You do not charge GST. You may need proof: business registration, non-Singapore address, or a GST exemption certificate. If your customer is an end-user (consumer): You charge GST. Full stop. IRAS audits GST treatment on SaaS contracts. Underreporting happens when founders assume their customer base is mostly overseas or when invoicing software does not flag the customer's jurisdiction. Keep records: customer address, registration proof, and the basis for any exemption claim. A miscalculation now becomes a cash-flow correction plus penalties later. Why contract term length reshapes your numbers A one-year contract worth SGD 12,000 does not feel the same to accounting software and to your bank account. Under revenue recognition (SFRS 15, Singapore's standard), you recognize that SGD 12,000 over 12 months, not upfront. Your accounting shows SGD 1,000 monthly revenue, even if the customer pays you SGD 12,000 on day one. Your cash position and your profit statement diverge immediately. Month 1: Bank receives SGD 12,000. Profit and loss (P&L) records SGD 1,000 revenue. Deferred revenue sits at SGD 11,000 on the balance sheet. Month 2: Bank receives nothing new. P&L records SGD 1,000 revenue (from the same contract). Deferred revenue drops to SGD 10,000. Months 3–12: Repeat. By month 12, deferred revenue is zero. P&L is still SGD 1,000/month from that contract. This separation matters for three reasons: Cash forecasting: Monthly billings (12 × SGD 1,000) look like steady revenue. Annual prepayment (SGD 12,000 upfront) creates lumpy, concentrated cash inflow. Lenders and investors read profit first; your CFO reads cash. You need both right. Churn visibility: If a customer cancels a one-year contract at month 6, you reverse half the deferred revenue (SGD 6,000). That hits the P&L as a loss in month 6. With monthly billing, churn is already baked in; month 7 just has no revenue from that customer. Tax impact: IRAS taxes you on accrual revenue (what you recognize), not cash received. If you invoice annually but recognize monthly, you pay tax on SGD 1,000/month even though you received SGD 12,000 upfront. Your cash tax payment is much later and much smaller. Most SaaS teams choose either monthly billing (simpler, but lower upfront cash) or annual with monthly recognition (complex, but higher upfront cash). A hybrid—offering both with a small discount for annual—works if your invoicing platform handles deferred revenue correctly. Many do not. Monthly vs. annual: forecasting and cash flow The choice between monthly and annual billing is not purely preference. It cascades into forecasting, customer acquisition cost payback, and working capital. Monthly billing: Steady, predictable revenue pattern (easier for board reporting). Lower customer friction at signup (lower barrier to entry). Churn surface area is continuous; you lose customers every month, so cohort retention is naturally visible. Cash conversion cycle is short (you get paid 30 days after invoice). Accounting is simpler: invoice = recognized revenue (mostly). Annual billing: Concentrated cash inflow: one invoice per customer per year. Large lump sums. Useful if you have lumpy operating costs (e.g., annual licenses, annual server commitments). Higher upfront validation of customer commitment; annual customers churn at a much lower rate than monthly. Lower churn rate appears artificially good in monthly reports (because you recognized revenue upfront), but actual customer retention may be the same. You have to measure it separately. Deferred revenue grows on the balance sheet; looks like a liability to some lenders, a treasure to others (depending on