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Singapore – indirect tax guide

Singapore – indirect tax guide

Explore the requirements and rules that apply to indirect taxes in Singapore.

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General

Type of indirect tax:

GST.

Standard rate:

7 percent. The GST rate is expected to increase from 7 percent to 9 percent, sometime in the period from 2021 to 2025.

What supplies are liable to the standard rate?

Taxable supplies of goods and services made in Singapore by taxable persons and all imports of goods (except for qualifying investment precious metals) into Singapore, unless import relief or one of the import GST schemes applies.

Effective from 1 January 2020, the following regimes will be implemented to tax certain imported services:

  • the reverse charge mechanism will apply to certain B2B imported services (where the service recipient is not able to claim input tax credits in full) 
  • the overseas vendor registration regime will apply to B2C digital imported services.

Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?

Zero-rated supplies include the following:

  • export of goods from Singapore
  • provision of international services
  • supply of a prescribed tool or machine used in the manufacturing of goods in Singapore, including the development of prototypes of the tool or machine as well as any services rendered directly in connection with the tool or machine to an overseas person
  • goods supplied for use on board or installation on a qualifying ship
  • goods sold or leased to ‘approved marine customers’ for use or installation on a commercial ship wholly for international travel.

Exempt supplies include the sale/lease of residential properties, supply of qualifying investment-grade gold, silver and platinum and most financial services.

VAT/GST registration

Who is required to register and what is the threshold?

A person is liable to register for GST when his or her taxable turnover has exceeded 1 million Singapore dollars (SGD) in a 12 month period or he or she is currently making taxable supplies and the taxable turnover is expected to exceed SGD1 million in the next 12 months.

Under the impending overseas vendor registration regime for B2C digital imported services, an overseas vendor with an annual global turnover exceeding SGD1 million and with B2C digital services to customers in Singapore exceeding SGD100,000 will be required to register for GST.

Is voluntary registration possible?

Yes.

Is voluntary registration available for an overseas company or a fiscal representative?

Yes, if it makes taxable supplies in Singapore. An overseas entity that registers for GST in Singapore must appoint a local agent to be responsible for all its GST matters.

VAT/GST compliance

What is the typical frequency of returns?

Typically, every 3 months, which is in line with the taxpayer’s accounting periods. However, there is an option for monthly or biannually accounting periods.

VAT/GST recovery

Are there any items that a registered business cannot recover GST on?

Social and recreational club subscription fees; medical and accident insurance premiums (with some exclusions); medical expenses (with some exclusions); benefits provided to employees’ family members; any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance; and expenses incurred on motor cars.

Can an overseas company recover GST if it is not registered?

Generally, no.

How long does it typically take to obtain a GST refund following a return filing?

The refund due date for GST is 1 month, 3 months and 6 months (after the Inland Revenue Authority of Singapore (IRAS) receives the GST return) for monthly, quarterly and biannually prescribed accounting periods, respectively.

However, GST registrants usually receive the refund earlier than the due date unless an audit is performed on the return.

Invoices

Are there specific requirements for the content of invoices to be considered valid for GST purposes?

Yes, tax invoices must be issued for standard rated supplies made to taxable persons. There are various requirements for the contents of a tax invoice, including the words ‘tax invoice’ in a prominent place; invoice number and date; the supplier’s name and address; the supplier’s GST registration number; the GST rate applied; the amounts both exclusive and inclusive of GST and the total GST payable.

Special indirect tax rules

Does a reverse charge or indirect tax withholding mechanism apply?

Effective from 1 Januray 2020, the reverse charge mechanism will be implemented to tax certain B2B imported services.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes, the IRAS offers taxpayers a system of formal advance rulings. The rulings issued are private and legally binding. A fee is payable to the IRAS to apply for a formal ruling. Informal, non-binding rulings can also be sought.

Other indirect taxes

Are there any other indirect taxes that apply in the jurisdiction?

Other indirect taxes include the following:

  • customs and excise duties
  • stamp duty
  • property tax
  • casino tax, betting and sweepstakes and private lotteries duties.

Contacts

Kok Shang Lam
KPMG in Singapore
T: +65 6213 2596
E: kokshanglam@kpmg.com.sg

Hwee Leng Gan
KPMG in Singapore
T: +65 6213 2813
E: hweelenggan@kpkpmg.com.sg

Disclaimer

All information within this guide is provided by KPMG professionals in Singapore and based on information available as of September 2019.

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