Consultancy and Professional Services

Consultancy services (e.g., legal, accounting, engineering service) and other similar professional services are subject to GST unless they qualify as international services under Section 21(3) of the GST Act.

Zero-Rating of Services

Only services that qualify as international services under Section 21(3) of the GST Act may be zero-rated (i.e. charge 0% GST).

Common Zero-Rating Scenarios

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 Prescribed Services

Certain services supplied:

  1. Under a contract with a person belonging to an overseas country in his business capacity; and
  2. Which directly benefit a person belonging to an overseas country in his business capacity.

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:

  1. Services of engineers, accountants, lawyers and other similar consultancy services;
  2. Data processing and provision of information;
     

    For (a) and (b), the services must not relate directly to any land or goods situated in Singapore.

  3. The testing of a sample of goods taken from or forming part of:
    1. goods that are outside Singapore at the time the services are performed; or
    2. goods for export outside Singapore.
  4. Handling or storage of goods at, or their transport to or from the place at which they are to be exported or have been imported, or the handling or storage of such goods in connection with such transport;
  5. Exhibition or convention services;
  6. Training or retraining for any business or employment;
  7. Services supplementary to, including the organising services referred to in sub-paragraphs (e) and (f).

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 In Connection With Land Or Buildings Outside Singapore

Services made directly in connection with land or buildings located outside Singapore. 

Services include:

  1. Services made in the course of construction, repair, and maintenance of any building; and
  2. Services provided by estate agents, auctioneers, architects, and engineers.

Services must not include:

  1. The supply of a right to promulgate an advertisement by means of any medium of communication; and
  2. The promulgation of an advertisement by means of any medium of communication.

Examples

  • An architect in Singapore provides design services in respect of a building located in China.
  • An estate agent in Singapore sells a house in London.

For details, please refer to:

Relevant Section for Zero-Rating: Section 21(3)(e) of the GST Act

Services In Connection With Goods Outside Singapore

Services performed directly in connection with goods located outside Singapore at the time the services are performed.

Services must not include:

  1. The supply of a right to promulgate an advertisement by means of any medium of communication; and
  2. The promulgation of an advertisement by means of any medium of communication.

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

Belonging Status of Customers

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.

Recovering Expenses from Clients

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).

  • The recovery of expenses form my client satisfies all the conditions of disbursement. My client is legally responsible to pay for the expenses. Am I or is my client entitled to claim the GST incurred on the expenses?

    Your client is entitled to claim the GST incurred on the expenses, subject to the conditions for input tax claim.
  • The recovery of expenses from my client is a reimbursement. Am I or is my client entitled to claim the GST incurred on the expenses?

    You are entitled to claim the GST incurred on the expenses, subject to the conditions for input tax claim.
  • The service that I provide qualifies as an international service. Therefore, I charge GST to my customer at 0%. Can I claim the GST incurred for providing the international service?

    Yes. The input GST can be claimed if you can satisfy all the conditions for input tax claim.

RATE THIS PAGE

  • Strongly Disagree
  • Strongly Agree

Information is easy to understand.

Information is useful.

Information is easy to find.

 
Please email us if you would like us to respond to your enquiries.