To ensure that Singapore’s Goods and Services Tax (‘GST’) system remains fair and resilient as the digital economy grows, Singapore’s tax authority (‘IRAS’) will extend the application of GST to: (i) low value goods worth S$ 400 or less (approximately US$ 295 or EUR 250) imported into Singapore by air or post, and (ii) imported B2C non-digital services from 1 January 2023.
Under the extended overseas vendor registration (‘OVR’) regime for low-value goods and non-digital services, the following suppliers will be required to register for GST in Singapore if they meet the specified thresholds:
The threshold requirements are as follows:
Registrations will be under the simplified GST registration regime. Once registered for GST, the overseas suppliers will need to charge and account for GST on B2C supplies of low-value goods made to Singapore.
Crucially, this change imposes the GST registration liability on electronic marketplace operators, re-deliverers as well as remote service providers who fulfil certain criteria. The import of low-value goods into Singapore by a GST-registered customer would also be subject to GST under the reverse charge regime.
Overall, overseas businesses who have customers in Singapore should take note of this potential GST registration requirement, and carefully evaluate whether they would need to register for GST in Singapore.
The Global VAT Newsletter focuses on changes in compliance duties in various EU and non-EU countries.
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