Among Southeast Asian countries, Singapore stands out as an attractive eCommerce market. The island nation has a digitally savvy population, with an internet penetration of 88%, and 74% of internet users having bought an item online.1 On top of that, it has the highest average revenue generated per user (ARPU) for eCommerce in Southeast Asia, which is forecasted at US$675.71 in 2020.2
If you’re an international eCommerce merchant looking to enter this market, you must first understand Singapore’s customs regulations and import duties and taxes.
To encourage trade between nations, Singapore’s import regulations are more relaxed. This includes having a high de minimis rate in order to encourage imports into the country. So what does de minimis rate mean, and how much is it in Singapore?
De minimis rate is the price threshold where fewer or no taxes are charged on imports entering the country. Singapore’s de minimis rate is SGD 400 or roughly USD 280 as of the time of this writing. This rate takes into account the value of the shipped goods along with the shipping fees and insurance costs if any.
The longer Latin phrase where ‘de minimis’ comes from translates to ‘the law does not concern itself with trifles’.3 The de minimis threshold only applies to B2C international shipments that enter Singapore via air freight. Thus, shipments that enter Singapore through other modes of transport like cross-border trucking are not exempt from import duties and taxes.
Singapore’s high de minimis rate is a welcome sign for international merchants looking to enter the island nation’s market. This is because merchants who sell products that are below SGD 400 to Singaporean customers wouldn’t need to pay extra duties and taxes when their order gets delivered.
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If your CIF value, which means the cost of your goods, shipping, and insurance, exceeds SGD 400, you’ll have to pay goods and services tax (GST) of 7% to Singapore’s customs. There are no import duties except for restricted goods.
The goods and services tax is a broad-based consumption tax levied on the import of goods, as well as nearly all exchanges of goods and services within Singapore. GST may also be known as the value-added tax (VAT) in other countries.4
Import duty is a type of tax collected on imports into the country, which can help the local government to raise income. In Singapore, import duties are limited to the import of restricted goods such as alcoholic beverages and tobacco. The rates for import duties depend on the Harmonised Systems Code (HS Code) provided, which is a classification system developed by the World Customs Organization to classify over 5,000 product categories. You may check out the rate on dutiable goods on Singapore’s Customs website.5
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After learning about Singapore’s de minimis rate and Singapore’s GST and import duties, you’ll need to prepare your shipments’ documents for customs clearance. If you’re not familiar with the B2C customs clearance process, we’ve already covered that topic in a previous article. You may also want to check out the de minimis rates and duties and taxes for other Southeast Asian countries’ customs as well.
Prior to engaging in a shipping partner, your documents and shipping labels have to be accurate in order to clear Singapore’s customs smoothly. To learn more about labeling for international shipments, you may refer to our labelling 101 guide. We also have an article explaining why it’s important to ensure data accuracy in your labels.
Engaging in a shipping partner that can provide accurate customs documentation can help to take the burden off keeping track of every single document for your shipments.
If your goods and shipping fees exceed the de minimis threshold, you can choose to settle your import duties and taxes by DDU or DDP. DDU and DDP are incoterms that determine how you will settle the payment for import duties and taxes. Our recommendation is to opt for DDP and seek out a shipping partner who can arrange to pay for your import duties and taxes prior to the shipment arriving in Singapore.
By learning about Singapore’s de minimis rates and GST, you’ll be able to optimise your steps for a seamless customs clearance into Singapore. On top of that, having a trusted shipping partner with end-to-end international shipping solutions can help to ease your eCommerce market expansion into Singapore. By having your bases covered, you’ll ensure that you can make a good impression on your Singaporean customers with timely delivery and a seamless eCommerce delivery experience.
Looking to ship internationally throughout Southeast Asia? Contact us to find out how.
You may also want to check out our other articles on customs clearance in Southeast Asia:
On 12 Nov 2021, multiple hs codes for apparel in chapters 61 and 62 will incur additional import duties under Indonesia's BMTP initiative.
Find out the process of shipping via air freight and sea freight from Hong Kong to Singapore including customs documentation here!
Getting accurate data on the shipping label is crucial in the cross-border shipping process. Find out how you can ensure data integrity for a smooth eCommerce delivery.
With different import duty and tax rates for every country and every type of item, customs payments may appear daunting. Read on to find out how customs clearance can be made smoother with delivered-duties paid (DDP) so that you can expand into the Southeast Asian market with a peace of mind!
Customs Clearance requires your shipment to gain official permission to enter a country and for the required duties and taxes to be paid. That's the gist of it, but there's more, click here to find out more!