Physical goods supplied over the internet
When you sell goods via the internet and deliver the goods locally in Singapore, you should standard-rate your supply and charge GST.
You can zero-rate your supply and charge 0% GST when you export the goods out of Singapore and maintain the necessary export documents. For more information on the types of documents to maintain under different export scenarios, please refer to GST: Guide on Exports (PDF, 938KB).
If the physical delivery of the goods is from a place outside Singapore to another place outside Singapore, it is out of scope for GST purpose (i.e. out-of-scope supply). No GST needs to be charged on the supply.
Example 1: Supply of Goods
You own a local online bookstore, Virtual Bookland. Mr John bought some books via online order from Virual Bookland and requested that the books be delivered to his son in England.
If you maintain the required export evidence, you may zero-rate your supply of books.
Services / digital services supplied over the internet
You need to standard-rate your supply and charge GST when you supply services over the internet to local customers. You can zero-rate your supply and charge 0% GST only if your services qualify as international services under Section 21(3) of the GST Act. This also applies to your supplies of digital services.
Digital services
Digital services are services which are supplied over the internet or an electronic network and the nature of which renders their supply essentially automated with minimal or no human intervention and impossible without the use of information technology.
Digital services include the supplies of the following:
- Downloadable digital content (e.g. downloading of mobile applications, e-books and movies);
- Subscription-based media (e.g. news, magazines, streaming of TV sows and music, and online gaming);
- Software programs (e.g. downloading of software, drivers, website filters and firewalls);
- Electronic data management (e.g. website hosting, online data warehousing, file-sharing and cloud storage services); and
- Support services, performed via electronic means, to arrange or facilitate a transaction, which may not be digital in nature (e.g. commission, listing fees and service charges by electronic marketplaces).
Zero-rating your services / digital services
A common provision under which you can zero-rate your services is Section 21(3)(j). Zero-rating will apply for your services if you meet both conditions (a) and (b) below:
Condition (a)
- The services are supplied under a contract with and directly benefit a person who belongs in a country outside Singapore (i.e. an overseas person), who is outside Singapore at the time the services are performed; or
- With effect from 1 Jan 2020, the services are supplied under a contract with an overseas person and directly benefit a GST-registered person in Singapore.
Condition (b)
- The services are not supplied directly in connection with land or goods in Singapore.
Overseas Vendor Registration (OVR) regime
With the implementation of the OVR regime on 1 Jan
2020, an overseas supplier making B2C supplies* of digital services to
customers in Singapore may be required to register for GST and charge GST on
its supplies.
Under certain conditions, an electronic marketplace
operator (whether local or overseas) supplying B2C supplies* of digital
services on behalf of overseas suppliers to customers in Singapore may also be
regarded as the supplier of the digital services and be required to register
for GST and charge GST on the supplies.
An electronic marketplace operator may also make the following
elections:
- B2C
election for supplies of digital services: An electronic marketplace operator
(whether local or overseas) may elect to charge and account GST on all B2C supplies*
of digital services made by local
suppliers through its marketplace, in addition to those made by overseas
suppliers.
- B2B
election for supplies of digital services: A local electronic marketplace
operator may elect to charge and account GST on B2B supplies# of digital
services made by overseas suppliers through the marketplace, in addition to the
B2C supplies* of digital services made by the overseas suppliers. This would
also cover B2B supplies# of digital services made by local suppliers if the
local marketplace operator has made the B2C election in (1) as well.
Where an electronic marketplace operator has made any of the elections,
a local
supplier supplying digital
services over the platform would be treated as making the supply to the
electronic marketplace operator instead of the end-customer. The electronic
marketplace operator is in turn treated as making another supply of digital
services to the end-customer.
To make the elections in (1) and (2), the electronic
marketplace operator has to seek approval from the Comptroller of GST in
writing and agree with its suppliers that it will be accounting for GST on the
digital services made through the marketplace.
*B2C stands for business-to-consumer, and refers to transactions made by
a GST-registered person, to a non-GST registered customer.
#B2B stands for business-to-business, and refers to transactions made by
a GST-registered person, including sole-proprietors, partnerships and corporate
bodies, to a GST-registered customer.
For more information on how the OVR regime and the
elections available to electronic marketplace operators, please refer to our e-Tax
Guides, GST: Taxing imported services by way of an overseas vendor registration regime (PDF, 903KB) and GST: Guide for E-Commerce (PDF, 645KB).
Belonging Status of Customers
Amongst
other conditions, the “belonging status” of your customer is relevant in
determining if you can zero-rate your digital services under the GST Act, e.g., Section 21(3)(j).
Generally,
if your customer has a Singapore address in your database, a Singapore domain
name (e.g. amylim@pacific.com.sg) or a Singapore IP
address, you should treat your customer as belonging in Singapore. In the
absence of such information, you should obtain a declaration from your customer
on his location / usual place of residence.
For
more information on determining where your customer belongs to for e-Commerce
transactions, please refer to GST: Guide for e-Commerce (PDF, 645KB).
If you are an overseas vendor registered under
the OVR regime or an electronic marketplace operator supplying digital services
on behalf of suppliers, you are required to determine the belonging status of
your customer based on a specified set of proxies. These proxies are set out in
the e-Tax Guide GST: Taxing imported services by way of an overseas vendor registration regime (PDF, 903KB) for details.
Common e-Commerce Items
Sale of Computer Software and Maintenance Services
Standard (Off-the-Shelf) Computer Software
Standard (off-the-shelf) computer software refers to software that
is developed and designed to be mass produced for sale to general public. The
manner in which the standard computer software is being delivered to your
customer determines whether you are making a supply of goods or a supply of
digital services.
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Customised Computer Software
Unlike standard computer software, customised
software is developed or modified to meet the specific requirement of your
customer. A supply of customised software is treated as a supply of digital
services, regardless of whether it is delivered in physical storage media or
electronically.

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'" (PDF, 604KB).
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.
Sale of Virtual Items in Online Games
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.
For GST purposes, you are making a supply of digital services and are required to charge GST on the sale of virtual items to your customer if:
- You are GST-registered;
- You are selling the virtual items in the course or furtherance of your business; and
- The virtual items are sold for real monies, or exchanged for goods or services.
You can zero-rate your supply and charge 0% GST if your services qualify as international services under Section 21(3) of the GST Act. Specifically, you can zero-rate your services under Section 21(3)(j) of the GST Act if the services meet both conditions (a) and (b) below:
Condition (a)
- The services are supplied under a contract with and directly benefit a person who belongs in a country outside Singapore (i.e. an overseas person), who is outside Singapore at the time the services are performed; or
- With effect from 1 Jan 2020, the services are supplied under a contract with an overseas person and directly benefit a GST-registered person in Singapore.
Condition (b)
- The services are not supplied directly in connection with land or goods in Singapore.
Advertising Services Over the Internet
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
(PDF, 453KB).
Web-Hosting services
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 the services meet both conditions (a) and (b) below:
Condition (a)
- The services are supplied under a contract with and directly benefit a person who belongs in a country outside Singapore (i.e. an overseas person), who is outside Singapore at the time the services are performed; or
- With effect from 1 Jan 2020, the services are supplied under a contract with an overseas person and directly benefit a GST-registered person in Singapore.
Condition (b)
- 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 (PDF, 703KB).
Server Co-Location Services
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:
- The services are supplied under a contract with and directly benefit a person who belongs in a country outside Singapore (an overseas person); and
- 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.
With the introduction of reverse charge from 1 Jan 2020, you may also zero-rate your server co-location services supplied to an overseas person that directly benefit local GST-registered persons (e.g. a local related company of the overseas person), where your services relate to server that belong to overseas persons or the local GST-registered persons.
For more information, please refer to
GST Treatment of Web-Hosting Services and Server Co-location Services
(PDF, 703KB).