From 1 January 2020, a consumer in Singapore will need to pay GST on digital services purchased from GST-registered overseas service providers.
Currently, only locally procured services are subject to GST, while services procured from overseas are not. The change is intended to level playing field in GST treatment for services, whether procured locally or overseas.
There is no change in GST treatment for online purchases of goods. Consumers are still required to pay GST on goods imported into Singapore, at the point of importation, with the exception of goods valued $400 and below which are imported via air or post.
GST is payable when you purchase digital services from GST-registered overseas service providers. Digital services are automated services supplied over the Internet with minimal or no human interaction. This includes:
- Downloadable digital content
- Subscription-based media
- Software programs
- Electronic data management services
Only digital services provided by GST-registered service providers are subject to GST and are authorised to charge and collect GST from consumers in Singapore.
Overseas digital service providers with an annual global turnover of more than S$1 million that sell more than S$100,000 worth of digital services to customers in Singapore in a 12-month period, are required to register for GST and charge GST. Some overseas digital service providers may also be registered on a voluntary basis.
Customers are responsible for providing complete and accurate information to GST-registered overseas service providers so that they can determine whether Singapore GST is applicable. If incorrect information is provided, offenders may face penalties of up to three times the amount of tax chargeable and a jail term of up to seven years.
For more information, please visit the IRAS website.
Source: IRAS Website, 9 December 2019