Overview
GST is a tax on local consumption, i.e. it is levied on all
services consumed in Singapore whether they are procured from local or overseas
suppliers. Prior to 1 Jan 2020, services (other than an exempt supply) supplied
by a supplier who belongs in Singapore is subject to GST while the same services
supplied by a supplier who belongs outside Singapore is not.
To level the GST treatment for all services consumed in
Singapore, the following regimes were implemented from 1 Jan 2020 to tax
imported services:
- Reverse charge regime for Business-to-Business (“B2B”) supplies*
of imported services; and
- Overseas vendor
registration regime for Business-to-Consumer (“B2C”) supplies* of imported
digital services.
* Business-to-Business (“B2B”) supplies refer to supplies made
to GST-registered persons, including companies, partnerships and
sole-proprietors. On the other hand, Business-to-Consumer (“B2C”) supplies
refer to supplies made to non-GST registered persons, which include individuals
and businesses that are not registered for GST.
NEW!
Budget 2021 –
GST on imports of low-value goods and B2C imported non-digital services
With effect from 1 Jan 2023, Minister For Finance announced in Budget 2021 that GST will be extended to:
(a) Goods imported via air or post that are valued up to (and including) the current GST import relief threshold of S$400; and
(b) Business-to-Consumer1 ("B2C") imported non-digital services.
The change will ensure a level playing field for our local business to complete effectively. The change also ensures that our GST system remains fair and resilient as the digital economy grows.
IRAS is conducting a public consultation from 26 Feb to 19 Mar 2021 before finalising the implementation details. Businesses are invited to give their feedback.
1Business-to-Consumer ("B2C") supplies refer to supplies made to non-GST registered persons, which include individuals and businesses that are not registered for GST. On the other hand, Business-to-Business ("B2B") supplies refer to supplies made to GST-registered persons, including companies, partnerships and sole-proprietors.
Taxing B2B imported services by way of Reverse Charge (RC)
If you
are a GST-registered business
From 1 Jan 2020, if you are either:
-
a GST-registered partially exempt business that is not entitled
to full input tax credit; or
- a GST-registered charity
or voluntary welfare organization that receives non-business receipts,
you are required to account for GST on all services that you
procure from overseas suppliers (“imported services”) as if you are the
supplier, except for certain services which are specifically excluded from the
scope of reverse charge.
You are also entitled to claim the corresponding GST as your
input tax, subject to the normal input tax recovery rules.
If you
are a non-GST registered business
From 1 Jan 2020, if the total value of your imported services
for a 12-month period exceeds S$1 million and you would not be entitled to full
input tax credit even if you were GST-registered, you may become liable for
GST-registration under the new GST registration rules.
Once registered for GST, you will be required to account for GST
on both your taxable supplies and your imported services which are subject to
reverse charge.
For more information, please refer to the e-Tax Guide GST: Taxing imported
services by way of reverse charge (PDF, 1202KB).
NEW!
Reverse Charge (RC) for B2B import of low-value goods
If you
are a GST-registered business
From 1 Jan 2023, a GST-registered business who is subject to
reverse charge (“RC business”) should perform reverse charge on low-value
goods. The requirement to perform reverse charge applies to all low-value goods
and includes low-value goods purchased from local and overseas suppliers,
electronic marketplace operators and redeliverers, regardless of whether they
are GST-registered or not.
You will be entitled to claim the corresponding GST as your
input tax, subject to the normal input tax recovery rules.
It is proposed that
low-value goods are goods that:
- are not dutiable goods, or are dutiable goods that have been
granted GST import relief by Singapore Customs under Item 32 of the Schedule to
the GST (Imports Relief) Order;
-
are not exempt from GST;
-
are located outside Singapore at the point of sale and are to be
delivered to Singapore via air or post; and
-
have a value not exceeding the GST import relief threshold of
S$400.
If you
are a non-GST registered business
From 1 Jan 2023, if the total value of your imported services
and low-value goods for a 12-month period exceeds S$1 million, and you would
not be entitled to full input tax credit even if you were GST-registered, you
may become liable for GST-registration under the new GST registration rules.
Once registered for GST, you will be required to account for GST
on your taxable supplies, your imported services and low-value goods which are
subject to reverse charge.
IRAS
is conducting a public
consultation from 26 Feb to 19 Mar 2021 before finalising the implementation
details. Businesses are invited to give their feedback.
Taxing B2C digital services by way of an Overseas Vendor Registration (OVR) regime
From 1 Jan 2020, if you belong outside Singapore, you are required to register for GST in Singapore if you:
- have an annual global turnover exceeding $1 million; and
-
make B2C supplies of digital services to customers in Singapore
exceeding $100,000.
Once registered for GST,
you are required to charge and account for GST on B2C supplies of digital
services made to customers in Singapore.
If you are an electronic marketplace operator
From 1 Jan 2020, under
certain conditions, whether you are a local or an overseas operator of an
electronic marketplace, you may be regarded as the supplier of the digital
services made by the overseas suppliers through your marketplace.
In such cases, you are
required to include the value of these services to determine your GST
registration liability. If you are liable for GST registration or are already
GST-registered, you are required to charge and account for GST on B2C supplies
of digital services made through your marketplace to customers in Singapore on
behalf of the overseas suppliers, in addition to digital services made by you
directly to customers in Singapore.
To ease compliance burden,
if you are an overseas operator, you will be registered under a simplified
regime, with reduced registration and reporting requirements.
For more information, please refer to the e-Tax Guide GST: Taxing imported services by way of an overseas vendor
registration regime (PDF, 903KB).
GST-Registered Businesses purchasing digital services from GST-Registered Overseas Vendors
Under the OVR regime, supplies of digital services to consumers
(i.e. individuals and non-GST registered businesses) are subject to GST. A GST-registered
overseas service provider will thus have to determine if a customer is
GST-registered to charge GST correctly.
If you are a GST-registered business purchasing digital services
from a GST-registered overseas service provider under the OVR regime, you need
to provide your GST registration number to the provider so that GST will not be
charged on business purchases of digital services. If you are a Reverse Charge
business, you are required to account for GST on the imported digital services
by way of reverse charge instead.
To check whether your overseas digital service provider is
registered for GST, you can use the GST-registered Business Search.
NEW!
Overseas Vendor Registration (OVR) for B2C imported non-digital services
From 1 Jan 2023, GST will be extended to B2C imported
non-digital services, through the Overseas Vendor Registration regime.
Digital services which are currently subject to GST will remain
taxable under the extended overseas vendor registration regime.
Consequently, from 1 Jan 2023, all B2C supplies of imported
remote services, whether digital or non-digital, will be taxed by way of the
extended overseas vendor registration regime.
It is proposed that remote services refer to any services where,
at the time of the performance of the service, there is no necessary connection
between the physical location of the recipient and the place of physical
performance.
If you are a supplier of remote services1 who belong
outside Singapore, it is proposed that you will be required to register for GST
in Singapore if you:
- have an annual global turnover exceeding
$1 million; and
- make B2C supplies
of remote services to customers in Singapore exceeding $100,000.
Once registered for GST, you are required to charge and account
for GST on B2C supplies of remote services made to customers in Singapore.
If you
are an electronic marketplace operator
If you are regarded as the supplier of the remote services1
made by the overseas suppliers through your marketplace, you are required to
include the value of these remote services to determine your GST registration
liability. If you are liable for GST registration or are already
GST-registered, you are required to charge and account for GST on B2C supplies
of remote services made through your marketplace to customers in Singapore on
behalf of the overseas suppliers, in addition to remote services made by you
directly to customers in Singapore.
IRAS is conducting a public consultation from 26 Feb to 19 Mar 2021
before finalising the implementation details. Businesses are invited to give
their feedback.
1 If you also supply low-value goods whether
directly or on behalf of suppliers via your electronic marketplace, you will be
required to aggregate the value of the B2C supplies of remote services and
low-value goods to determine your GST registration liability. Once you are
liable for GST registration or are already GST registered, you are required to
charge and account for GST on both B2C supplies of remote services and
low-value goods to Singapore.