On or about 4 February 2019, the Inland Revenue Authority of Singapore (IRAS) has published the first edition of GST e-Tax Guide: Taxing imported services by way of reverse charge.
In Budget 2018, the Finance Minister has announced that GST would be applied on imported services in the context of business-to-business (“B2B”) transactions by way of a reverse charge mechanism with effect from 1 Jan 2020.
An overseas vendor registration regime would also be implemented on 1 Jan 2020 to tax business-to consumer (“B2C”) cross-border supplies of digital services. (Refer to the e-Tax Guide “GST: Taxing imported services by way of an Overseas Vendor Registration Regime” for information on the overseas vendor registration regime.)
This e-tax guide explains the features of the reverse charge mechanism and the related registration and compliance rules. It also covers the amendments to the zero-rating provisions and transitional rules for transactions spanning the implementation date of 1 Jan 2020.
It is applicable to:
- GST-registered persons who procure services from overseas suppliers and are either not entitled to full input tax credit or belong to GST groups that are not entitled to full input tax credit; and
- Non-GST registered persons who procure services from overseas suppliers exceeding S$1 million in a 12-month period and would not be entitled to full input tax credit even if GST-registered.
Source: IRAS, 4 February 2019