e-Commerce

1. Sale of Physical or Digitised Goods via Internet

   1. Sale of Physical Goods

      E.g. Online sale of books, CDs, clothes, etc.

      Mode of Delivery	GST Treatment
      Delivered in the form of a physical product	Supply of goods

       

   2. Sale of Digitised Goods

      E.g. Online sale of music, digital books, etc.

      Mode of Delivery	GST Treatment
      Downloaded by customer via the internet	Supply of services

       

2. Sale of Standard (Off-the-Shelf) Computer Software

   Mode of Delivery	GST Treatment
   Delivered in the form of a physical product / storage media (e.g. CD). E.g. Standard software products and volume keys delivered in the form of CD.	Supply of goods
   Delivered electronically E.g. Downloaded by customer via the Internet.	Supply of services

    

   1. Sale of Additional License for Standard (Off-the-Shelf) Computer Software

      Mode of Delivery	GST Treatment
      Delivered in the form of a physical product / storage media (e.g. CD); or Delivered electronically E.g. Downloaded by customer via the Internet.	If the original computer software is supplied as goods, sale of additional license is a supply of goods.
      	If the original computer software is supplied as services, sale of additional license is a supply of services.

       

   2. Sale of Renewal License for Standard (Off-the-Shelf) Computer Software

      Mode of Delivery	GST Treatment
      Delivered in the form of a physical product / storage media (e.g. CD).	Supply of goods
      Delivered electronically E.g. Downloaded by customer via the Internet.	Supply of services

       

   3. Sale of Updates for Standard (Off-the-Shelf) Computer Software

      Mode of Delivery	GST Treatment
      Delivered in the form of a physical product / storage media (e.g. CD).	Supply of goods
      Delivered electronically  E.g. Downloaded by customer via the Internet.	Supply of services

       

3. Sale of Customised Computer Software

   Mode of Delivery	GST Treatment
   Delivered in the form of a physical product / storage media (e.g. CD); or Delivered electronically E.g. Downloaded by customer via the Internet.	Supply of services

    

   1. Sale of Additional Licence for Customised Computer Software

      Mode of Delivery	GST Treatment
      Delivered in the form of a physical product / storage media (e.g. CD); or Delivered electronically E.g. Downloaded by customer via the Internet.	Supply of services

       

4. Maintenance of Computer Software 

   Maintenance of computer software is a supply of services. To determine the GST treatment, you need to consider the original sale of the computer software and assess whether the maintenance service is directly in connection with goods.
   
   If the original sale of computer software is a supply of goods, your provision of software maintenance service may be regarded as directly in connection with goods if it satisfies the 5 indicators for "directly in connection with" in "Clarification on 'Directly in Connection with' and 'Directly Benefit'" (474KB).  

   If your provision of software maintenance service qualifies as "directly in connection with" goods

   You should standard-rate your maintenance service and charge GST when the software is situated in Singapore.

   You may zero-rate your maintenance service under Section 21(3)(f) of the GST Act if you perform physical work on the software situated outside Singapore.

   If your provision of software maintenance service does not qualify as "directly in connection with" goods

   Your service can be zero-rated under Section 21(3)(j) of the GST Act if the conditions for zero-rating international services are satisfied. Otherwise, you must charge GST on your software maintenance service.

   If the original sale of computer software is a supply of service, your provision of software maintenance service is not directly in connection with goods. Your service can be zero-rated under Section 21(3)(j) of the GST Act if the conditions for zero-rating international services are satisfied. 

You need to charge GST on goods that you supply locally.

For goods that are exported, you may zero-rate the supply if you maintain the required documents stated in:

• GST: Guide on Exports (938KB); or
• GST: Guide on Hand-Carried Exports Scheme (725KB).

If the physical delivery of the goods is from a place outside Singapore to another place outside Singapore, it is outside the scope of our GST law (i.e. out-of-scope supply). No GST needs to be charged on the supply.

You are required to charge GST to your customer for the services.

Zero-Rating International Services

Where the services qualify as international services under Section 21(3) of the GST Act, you may zero-rate your supply of service.

Specifically, a supply that meets the following conditions will qualify as international services under Section 21(3)(j):

1. it is supplied under a contract with a person who belongs in a country outside Singapore;
2. it directly benefits a person who belongs in a country outside Singapore and who is outside Singapore at the time the services are performed; and
3. it is not supplied directly in connection with land or goods in Singapore.

Belonging Status of Customers

To determine whether the customer belongs in a country outside Singapore, the business address, domain name, and IP address can be used as indicators.

For more information on determining where your customer belongs to for e-Commerce transactions, please refer to GST: Guide for e-Commerce (516KB).

Online games are games played over an internet or computer network that allow multiple players to interact simultaneously in real time and form social communities within a game environment.

Within the virtual world, players may trade virtual goods (e.g. land, house, weapon), virtual currencies, in-game credits and provide virtual services (e.g. plastic surgery, dance, clubbing).

When you sell these virtual items, you are passing on the right to use the virtual items to another party. This is a supply of services for GST purposes.

Requirement to Charge GST

You are required to charge GST on the sale of virtual items to your customer if:

1. You are GST-registered and belong in Singapore;
2. You are selling the virtual items in the course or furtherance of your business; and
3. The virtual items are sold for real monies, or exchanged for goods or services.

Where the services qualify as international services under Section 21(3) of the GST Act, you may zero-rate your supply of service. Specifically, a supply that meets the following conditions will qualify as international services under Section 21(3)(j):

1. it is supplied under a contract with a person who belongs in a country outside Singapore;
2. it directly benefits a person who belongs in a country outside Singapore and who is outside Singapore at the time the services are performed; and
3. it is not supplied directly in connection with land or goods in Singapore.

Virtual currencies (e.g. Bitcoins) are not considered as 'money', 'currency' or 'goods' for GST purposes. Instead, the supply of virtual currency is treated as a supply of services, which does not qualify for GST exemption.

Buying Goods or Services Using Virtual Currencies

When you use virtual currencies to pay for goods or services, the transaction will be considered as a barter trade.

There are two supplies made - one by the supplier who supplies the goods and services, and another by you who use virtual currencies to pay the supplier.

GST will need to be charged on each supply if the respective supplier is GST-registered.

However, if you use virtual currencies to pay a supplier belonging outside Singapore, you need not charge GST as the supply will be zero-rated.

As a concession, if you use virtual currencies to buy virtual goods or services within the gaming world, you need not charge GST until they are exchanged for real monies, goods or services.

Selling Virtual Currencies

If you are a GST-registered business and you sell virtual currencies as a principal, you will have to charge GST on the sale of the virtual currencies, unless the sale is made to a person belonging outside Singapore.

However, if you act as an agent for another party when selling the virtual currencies, you need to charge GST on the commission fees you receive, unless the service is supplied to a person belonging outside Singapore. Trading fees charged by a virtual currency exchange located in Singapore are subject to GST if that exchange is GST-registered.

Importing Goods Paid by Virtual Currencies

Goods imported and paid for using virtual currencies are subject to the same import GST rules and reliefs as those paid for using real currencies.

Provision of web-advertising service (e.g. banner ad, sidebar ad and pop-up ad) is a sale of advertising space or time. It is a form of media sales.

The entire package of media sales may be zero-rated under Section 21(3)(u) if the advertisement is placed on a webpage or website that allows access to both Singapore and overseas viewers/browsers.

However, if the advertisement is placed on a website or webpage that only allows access to Singapore viewers/browser (i.e. sg domain), the entire package of media sale should be standard-rated.

For more information, please refer to GST: Guide for Advertising Industry (453KB).

Web-hosting services involve hosting your client's website on a shared server or dedicated server that belongs to you.

You need to charge GST to your customer for the services. However, if the services qualify as international services under Section 21(3) of the GST Act, you may zero-rate your supply of service.

Even though you may be hosting the client's website on your server that is situated in Singapore, you can zero-rate your web-hosting services under Section 21(3)(j) of the GST Act if:

1. The services are supplied under a contract with a person who belongs in a country outside Singapore;
2. The services directly benefit a person who belongs in a country outside Singapore and who is outside Singapore at the time the services are performed; and
3. The services are not supplied directly in connection with land or goods (not referring to your server or equipment that is used as a tool to carry out your services) in Singapore.

For more information, please refer to GST Treatment of Web-Hosting Services and Server Co-location Services (224KB).

Under a co-location arrangement, a server (that does not belong to you) is placed at your facility or data centre and you are providing a physical environment for the operation of the server.

You need to charge GST to your customer for the services.

However, you can zero-rate your server co-location services (even though the server is placed in Singapore) under Section 21(3)(s) of the GST Act if:

1. The services are supplied under a contract with a person who belongs in a country outside Singapore;
2. The services directly benefits a person who belongs in a country other than Singapore; and
3. The services supplied relate to the co-location in Singapore of computer server equipment belonging to the overseas customer or the overseas person who directly benefits from the services.

For more information, please refer to GST Treatment of Web-Hosting Services and Server Co-location Services (224KB).