Below are some common scenarios where consultancy and professional services may be zero-rated. For a complete list of international services under Section 21(3), please refer to Providing international services.
Certain services supplied:
Unlike Section 21(3)(j), your overseas customer can be in Singapore to receive your services.
Services that are within the list of prescribed services:
For (a) and (b), the services must not relate directly to any land or goods situated in Singapore.
The above list of prescribed services shall not include any services relating to accommodation and entertainment.
Example for (a) and (b)
You provide consultancy services on 'feasibility of conducting business in Singapore' to your overseas customer.
Example for (d)
You supply transportation and handling services to an overseas customer from the point of import to the warehouse that the goods were consigned. Your transportation and handling services can be zero-rated.
Example for (f) and (g)
You provide training in Singapore for participants from all over the world (including Singapore). You may zero-rate your training fees to overseas companies who send their overseas staff to attend the course in Singapore.
Relevant Section for Zero-Rating: Section 21(3)(k) of the GST Act
Services made directly in connection with land or buildings located outside Singapore.
Services include:
Services must not include:
Examples
For details, please refer to:
Relevant Section for Zero-Rating: Section 21(3)(e) of the GST Act
Services performed directly in connection with goods located outside Singapore at the time the services are performed.
Example: A local company provides repair services for a computer network system in Malaysia.
Relevant Section for Zero-Rating: Section 21(3)(f) of the GST Act
Under certain zero-rating provisions e.g. section 21(3)(k), you need to determine if your customer belongs to a country outside Singapore before you can zero-rate your services.
Please refer to Belonging status of your customer for information.
You may pay for expenses on behalf of your client. Subsequently, you re-bill to recover the expenses from your client.
Whether you need to charge GST on the re-billed amount will depend on whether the recovery of expenses is a reimbursement or disbursement.
Disbursements are not subject to GST. To qualify as a disbursement, all the conditions for disbursement must be satisfied.
Otherwise, the recovery of expenses (commonly known as reimbursement) is considered as a separate supply made to the other party. Hence, you need to charge GST on the amount recovered.
For conditions on disbursements, please refer to Recovering expenses (re-billing).