GST on Digital Services
From 1 Jan 2020, if you are a consumer in Singapore, you will need to pay GST on digital services purchased from GST-registered overseas service providers.
Currently, only locally procured services are subject to GST, while services procured from overseas are not. The change, announced in Budget 2018, is intended achieve a level playing field in GST treatment for services, whether procured locally or overseas.
There is no change in GST treatment for online purchases of goods. You are still required to pay GST on goods imported into Singapore, at the point of importation, with the exception of goods valued $400 and below which are imported via air or post.
When is GST payable
GST is payable when you purchase digital services from GST-registered overseas service providers.
Digital services are automated services supplied over the Internet with minimal or no human interaction. This includes:
Only digital services provided by GST-registered service providers are subject to GST.
Overseas digital service providers with an annual global turnover of more than S$1 million that sell more than S$100,000 worth of digital services to customers in Singapore in a 12-month period, are required to register for GST and charge GST. Some overseas digital service providers may also be registered on a voluntary basis.
You can use the
GST-registered Business Search to check whether an overseas digital service provider is registered for GST.
Examples of digital service purchases
The following examples illustrate how the GST change may affect you as a consumer.
Grace currently pays a monthly subscription for video streaming services from an overseas Company A. Before 1 Jan 2020, no GST is payable on her subscription fees.
As Company A is registered for GST under the OVR regime with effect from 1 Jan 2020, Grace will have to pay monthly subscription fees inclusive of GST. Assuming that the monthly subscription fee is $10 (inclusive of GST), Company A will be required to pay the GST collected of $0.65 to IRAS.
John regularly purchases games from overseas Company B’s app market. He plays these games on his mobile phone every day. Sometimes, John also makes in-app purchases to unlock hidden levels.
Before 1 Jan 2020, no GST is payable on such purchases. However, since Company B is registered under the OVR regime, GST is payable on all paid apps and in-app purchases from Company B’s app market with effect from 1 Jan 2020.
Company B will be required to pay the GST collected to IRAS.
Stephen is a professional gamer. He goes online to buy the latest digital copy of games released by overseas Company C, which is registered under the OVR regime. Before 1 Jan 2020, Stephen does not have to pay GST on the digital games he buys from Company C. However, from 1 Jan 2020, Stephen will have to pay GST for his digital video game purchases.
Company C will be required to pay the GST collected to IRAS.
Gabriel works on-the-go and subscribes to overseas Company D’s cloud storage to store his latest design works. He renews his yearly subscription on 1 December 2019.
Company D is registered under the OVR regime. GST will not be applicable for the month of December since the OVR regime only comes into effect on 1 Jan 2020.
However, GST will be chargeable on his remaining 11 months’ worth of subscription fees from 1 Jan 2020 onwards. Company D will be required to pay the GST collected to IRAS.
Price display
As most of the GST-registered overseas digital service providers operate in a global market, it may not be feasible for them to display prices inclusive of Singapore GST on their websites or online stores.
Some of these providers may only be able to determine whether Singapore GST is chargeable after verifying that you reside in Singapore. Once the GST-registered provider has ascertained that Singapore GST is chargeable, the price that they charge you will be inclusive of GST.
Only GST-registered providers are authorised to charge and collect GST from consumers in Singapore. You should email to IRAS if you encounter any wrongful collection of GST by unregistered overseas providers.
Customer’s responsibility to provide correct information
Overseas digital service providers will determine if you reside in Singapore based on information you provide to them. This includes your payment and billing information.
You are responsible for providing complete and accurate information to GST-registered overseas service providers so that they can determine whether Singapore GST is applicable.
It is a serious offence to provide incorrect or false information to overseas providers to avoid paying GST on digital services (e.g. providing a false address to misrepresent yourself as residing outside Singapore or using a business’ GST registration number)
Upon conviction, offenders may face penalties of up to 3 times the amount of tax chargeable and a jail term of up to 7 years.