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Effective date: 1 January 2020

Scope: GST to be imposed on imported services on:

  1. Business to Business (B2B) - supplies made to a GST registered person
  2. Business to Consumer (B2C)

 

Policy rationale - To level GST treatment for all services consumed in Singapore.

 

Reverse Charge:

  • Taxing (B2B) supplies of imported services.
  • Reverse Charge applies only to imported services of standard-rated and for making exempt supplies.
  • A local GST registered business is required to account for GST on the imported services as if it were the Supplier and correspondingly allowed to claim such GST as its input tax.
  • If you procure services from an overseas vendor and if the value of such services > S$1 million within 12 months  and you are not entitled  to claim the GST incurred in full  -  then you need to register for GST and apply Reverse Charge.
  • Intra GST group and inter-branch transactions are however subject to Reserve Charge.
  • Examples outside the scope of RC - financial services / international services / services provided by Government.

 

Examples subject to Reverse Charge:

  • Taxable business with substantial exempt supplies
  • Interest from inter-company loans
  • Mixed developers (residential and commercial properties)
  • Financial institutions, insurance
  • Charities and welfare
  • Investment holding company receiving dividend income

 

Overseas Vendor Registration

  • For Business to Consumer supplies of imported services.
  • B2C - supplies made to a non-GST registered person.
  • An Overseas Vendor is liable to register for GST in Singapore if the total value of his taxable supplies for each year exceeds S$1 million, and the total value of his digital services in Singapore exceeds S$100,000.
  • Local and overseas electronic marketplace operators may also be required to charge and account for GST on digital services made through the electronic marketplace to local consumers on behalf of the overseas suppliers.
  • A local non-GST registered electronic marketplace operator is liable to register for GST if its total digital services made on behalf of overseas suppliers through the electronic marketplace and its own taxable supplies transacted > S$1 million.
  • Electronic marketplace – medium which allows suppliers to make supplies operated by electronic means.
  • An Overseas Vendor is required to ascertain whether a customer is GST registered - if the customer does not provide  his GST registration, the Vendor must charge and account for GST - IF the customer provides such details, the Vendor should not charge  GST on his supplies
  • An Overseas Vendor is required to determine whether his digital services are supplied to customers belonging in Singapore.

 

Digital services - services delivered over the internet or electronic network covering downloadable digital content (mobile applications, e-books, movies), subscription-based media (news, magazines, streaming TV shows, music, online gaming), software programs (drivers, website filters), electronic data management (website hosting, online data warehousing, cloud storage services).  


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