GST rate
Extension of GST to goods imported via air or post that are valued up to (and including) the current GST import relief threshold of S$400 (“low-value goods”)
- The Government had announced in the 2018 Budget that it would need to increase the GST rate sometime from 2021 to 2025. As announced in the 2020 Budget and confirmed in the 2021 Budget, the GST rate increase will not take effect in 2021.
- The GST rate will increase sometime during 2022 to 2025, subject to the economic outlook.
- With effect from 1 January 2023, GST will be extended to Low-value goods which are imported via air or post. This will be effected via the overseas vendor registration and reverse charge regimes. GST is already and will continue to be collected on goods imported via land or sea, regardless of value.
Extension of GST to business-to-consumer (“B2C”) imported non-digital services
- With effect from 1 January 2023, GST will be extended to Business-to-consumer imported non-digital services (such as live interaction with overseas providers of educational learning, fitness training, counselling and telemedicine). This will be effected via the overseas vendor registration regime.
- This change, together with the change announced in Budget 2018 to extend GST to B2C imported digital services and business-to-business (“B2B”) imported services, will ensure a level playing field for our local businesses to compete effectively. Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers. This change will also ensure that our GST system remains resilient as the digital economy grows.
- IRAS will consult the industry shortly, before we finalise the implementation details.
Change the basis for determining whether zero-rating applies to a supply of media sales, from the place of circulation of the advertisement to the place where the customer and direct beneficiary of the service belong
- Online advertising has grown and is expected to account for an increasing share of advertising spending in future.
- Developments in digital technologies have also changed the way that media sales are supplied, making it more difficult for suppliers of digital media sales to determine the place of circulation.
- Given this trend, the basis for determining whether zero-rating applies to a supply of media sales will be updated, to be based on the place where the customer (i.e. the contractual customer) and direct beneficiary of the service belong:
- if the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the media sales will be zero-rated; and
- if the customer belongs in Singapore, the media sales will be standard-rated.
- This change will take effect for the supply of media sales on or after 1 January 2022.
Source: IRAS, 17 February 2021