In less than a month the Goods and Services Tax (GST) will be levied on imported services, experts have said that these would impact business-to-business (B2B) services from abroad such as banks, insurers and charities. However, the industries have responded that they do not expect significant cost increases.<\/p>\n\n\n\n
Only those with an annual global turnover of more than S$1 million and sells more than S$100,000 worth of digital services to consumers in Singapore annually are required to register for GST. <\/p>\n\n\n\n
American video streaming service Netflix is among those that have registered as an overseas vendor. Netflix has, however, stated that they do not intend to change their prices. Experts have stated that it would vary on a case-to-case basis if overseas vendors will pass on the tax charges to consumers.<\/p>\n\n\n\n
A 6 December 2019 report by the Nikkei Asian Review<\/em> said that Google will start collecting tax on its digital services in Malaysia starting January 2020, when Malaysia officially rolls out a 6% digital service tax on foreign providers.<\/p>\n\n\n\n The other change involves B2B services that have been increasingly procured from overseas by companies here such as marketing, accounting, IT and management services. From 1 January 2020, local businesses that source services from abroad will have to pay GST under a reverse charge mechanism. Under this mechanism local businesses will have to \u201cstep into the shoes of their providers\u201d and pay GST to the tax authority directly on the services it imports.<\/p>\n\n\n\n Most businesses would not be impacted and it will be contained to specific industries, such as banks, insurers, finance companies, as well as mixed and residential property developers. They cannot claim GST refunds in full and thus are likely to cost more because the GST they are going to incur on these imported services cannot be recoverable in full.<\/p>\n\n\n\n OCBC\u2019s Head of Group Tax Jane Lim said the local bank currently purchases brokerage services, online courses, as well as subscriptions to financial information and IT services from overseas vendors. The new tax \u201cwill incur some additional costs\u201d but \u201cthe amount is small\u201d compared to the bank\u2019s total expenses.<\/p>\n\n\n\n Charities that receive non-business receipts will also be impacted if they rely a lot on imported services, experts said.<\/p>\n\n\n\n The SPD (f.k.a. the Society for the Physically Disabled) expects \u201csome impact\u201d as it engages professionals from abroad for training or consultancy services. But the number of such services is \u201crelatively minimal\u201d.<\/p>\n\n\n\n Others, such as the National Kidney Foundation and Singapore Red Cross, said the new tax are not applicable as they do not consume imported services.<\/p>\n\n\n\n With the introduction of tax on imported services in Budget 2018, Minister Heng indicate that the changes would \u201censure that imported and local services are accorded the same treatment”. The tax is expected to bring in around S$90 million of tax revenue a year. Experts have estimated GST collection is \u201cnot significant\u201d.<\/p>\n\n\n\n Businesses and consumers are responsible for providing complete and accurate information to registered overseas digital service providers who use these information to determine if their customers reside in Singapore. It is a serious offence to provide incorrect or false information.<\/p>\n\n\n\n Source: CNA, 10 December 2019<\/p>\n","protected":false},"excerpt":{"rendered":" In less than a month the Goods and Services Tax (GST) will be levied on imported services, experts have said that these would impact business-to-business (B2B) services from abroad such as banks, insurers and charities. However, the industries have responded that they do not expect significant cost increases. Only those with an annual global turnover […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,6],"tags":[],"class_list":["post-1371","post","type-post","status-publish","format-standard","hentry","category-gst","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=1371"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1371\/revisions"}],"predecessor-version":[{"id":1372,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/1371\/revisions\/1372"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=1371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=1371"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=1371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}