Starting from 1 Jan 2023, Singapore international eCommerce sales and deliveries will need to adhere to new GST rules and higher GST charges on low-value-goods imported into Singapore by companies with significant annual revenue and sales to non-GST registered customers based in Singapore.
In Singapore’s Budget 2021 discussion, Singapore’s Minister for Finance announced the following:1
“With effect from 1 Jan 2023, (Singapore’s) Minister for Finance announced in Budget 2021 that GST will be extended to:
B2C imported non-digital services.2
The change will ensure a level playing field for our (Singapore’s) local businesses to compete effectively. The change also ensures that our (Singapore’s) GST system remains fair and resilient as the digital economy grows.”
In addition to this, Singapore is also planning to increase GST by 1% each in 2023 and 2024:3
This document summarises information from the following documents from IRAS
Those who are liable to collect GST at check out must also provide their carriers (e.g. Janio) with their GST or OVR registration number along with the GST payment status on an item level for the items being shipped in your order for customs clearance purposes.
If the above GST collection information does not flow to your shipping partner, such as Janio, on time at the point of customs clearance it is likely that GST will be collected again at Singapore Customs. Below is a sample shipping manifest with the required information required by Singapore Customs to adhere to this ruling.
Source: IRAS Air Courier Webinar – Extended Overseas Vendor Registration Regime – Slide 22
This current GST regime works in a comparatively similar way to how VAT is collected in Australia. You must register for GST, show GST in your check out page and charge GST to Singapore-based non-gst registered customers whether or not you are Singapore-based if your business meets certain criteria.
Different types of overseas businesses have different requirements, which can be found in the following slide numbers below in IRAS’s regime slides. You can also find the definitions of digital services, non-digital services and more in IRAS’s official extended Overseas Vendor Registration regime slides.
Overseas suppliers and overseas electronic marketplace operators will register under a simplified registration regime, with reduced registration and reporting requirements. GST reporting will be done via electronic-filing.
Local businesses who are GST registered also need to charge GST for any LVG sold to non-GST registered people in Singapore. You can refer to the following slides numbers in IRAS’s official extended Overseas Vendor Registration regime slides for more information:
When you have registered for GST or OVR in Singapore, please provide your GST registration number along with information on whether the items you need to ship have GST paid on them to shipping providers like Janio for customs clearance purposes.
For local vendors who keep LVG warehoused overseas to ship to customers in Singapore, these goods will fall within the scope of GST once this comes into force in January 2023. Prior to its implementation, this arrangement was “treated as outside the scope of GST since the goods are located outside Singapore at the time of supply.”4
Businesses that don’t meet the requirements for registering for GST or the Overseas Vendor Registration (OVR) must include such supplies in your taxable turnover to determine GST registration liability.5 IRAS provides a GST Registration Calculator to help with monitoring your taxable turnover.
Shipments that are classified as High Value Goods (HVG) are those whose total value of product value, insurance, and freight costs are S$400 and above. Goods that are valued above S$400 require duties and taxes to be paid at customs. For shipments like these, your shipping partner assisting you with customs will usually pay duties and taxes on your behalf while managing permit matters.
There could be cases where your shipment is valued close to S$400 before it arrives in Singapore but could be valued above that, such as due to foreign exchange fluctuations. In these cases, if you had paid GST on it as a low value good (before it breached S$400), your shipping partner may pay GST again at customs once it breaches S$400 when it arrives in Singapore. To help you, please take note of the following:
This GST will be charged back to your company by your shipping partner. In rare cases like these, you will need to submit a GST refund claim to the Inland Revenue Authority of Singapore (IRAS) with the proof of double payment.
Janio offers both international air freight into Singapore and customs clearance services into Singapore from Malaysia. To find out more about our services and rates or to receive more updates on customs clearance, reach out to us today.
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