Singapore: GST changes in budget 2021

Singapore: GST changes in budget 2021

Provisions relating to the goods and services tax (GST) in the budget 2021 would extend the overseas vendor registration requirement for imports of low-value goods and non-digital services and provide for a change in zero-rating rules regarding media sales.


Low-value goods

Currently, GST import relief is granted to low-value goods (defined by a value of no more than S$400) imported by air or post. In addition, the overseas vendor registration regime applies only to digital services. Under the budget, beginning 1 January 2023, the overseas vendor registration rules would be extended to apply to:

  • Imports of low-value goods imported by air or post if valued no more than S$400
  • Business-to-consumer (B2C) imported non-digital services

Similarly, the reverse-charge regime would be extended to include imports of low-value goods imported by air or post when valued at no more than S$400.

These changes could affect local suppliers supplying goods outside Singapore, overseas suppliers supplying low-value goods, the electronic marketplace, and deliverers if conditions are met.

Also under the budget measures, effective 1 January 2023, in addition to imported low-value goods, the overseas vendor registration rules would be extended with regard to B2C supplies of non-digital services. Under this measure, any supplier outside Singapore that has a global turnover exceeding S$1 million and that makes B2C supplies of digital and non-digital services (or remote services) to customers in Singapore exceeding a value of S$100,000 in the last calendar year or the next 12 months, is required to register and to charge and account for GST. Consequently, all B2C imported services—whether digital or non-digital—if supplied and received remotely, would be subject to the overseas vendor registration regime.

The measure would apply to remove services, whether digital or non-digital. The GST registration rules would also apply.

Media sales and digital advertising

Regarding the supply of media sales, the GST treatment currently depends on the place of circulation of the advertisement. Under the budget proposals, beginning 1 January 2022, the GST treatment would be amended to reflect the “belonging status” of the customer and direct beneficiary of the services.

  • If the customer belongs outside Singapore and the direct beneficiary either belongs outside Singapore or belongs in Singapore but is registered for GST, the provision of media services would be zero-rated.
  • If the customer belongs in Singapore, the provision of media services would be standard-rated.

This measure recognizes the growth in online advertising services and the compliance difficulties encountered by businesses in determining the place of circulation of advertisements.

Read a March 2021 report [PDF 360 KB] prepared by the KPMG member firm in Singapore

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