Singapore GST Registration Guide for Foreign Businesses

Are you a foreign business looking to sell products or services to businesses or consumers in Singapore? Besides planning how to market and deliver your products and services, you may also need to take note of whether you need to charge Goods and Services Tax (GST) on them.

This article will take you through the requirements for charging GST in Singapore, the steps to register for GST and the payment process. It will explain:

• What is GST and how is it calculated?
• Whether you need to charge GST when selling goods/services to people in Singapore
• How to register for GST
• Whether you need to display GST-inclusive prices for buyers from Singapore
• How to pay GST 
• Penalties for not charging GST

What is GST and How is It Calculated?

GST, or Goods and Services Tax, is a consumption tax levied on nearly all supplies of goods and services in Singapore, as well as goods imported into Singapore. It is the equivalent of the Value-Added Tax (VAT).

With effect from 1 January 2023, GST is charged at the prevailing rate of 8% when customers buy taxable goods or services from GST-registered businesses. The GST rate will be increased to 9% in 2024.

Do You Need to Charge GST When Selling Goods/Services to People in Singapore?

Previously, supply of services by overseas businesses was not subject to GST. However, to level the GST treatment between local and overseas suppliers that provide services to consumers, overseas businesses will have to charge GST on services exported to Singapore from 1 January 2020 via the Overseas Vendor Registration (OVR) regime.

The OVR regime is applicable to Business-to-Consumer (B2C) supplies of imported digital services and from 1 January 2023, to non-digital services as well as low-value goods. It requires overseas vendors who provide digital services to non-GST registered individuals and businesses in Singapore to charge and account for GST on the services provided.

If you make a Business-to-Business (B2B) supply of services to GST-registered persons (i.e. companies, partnerships and sole-proprietors) in Singapore, you would not need to account for GST. However, the GST-registered businesses that are the recipients of the services would be liable to account for GST on the value of the imported services, as if he were the supplier, under the Reverse Charge regime.

Digital services

Digital services comprise services offered through the internet or an electronic network. These services are mostly automated and facilitated via the use of computers. Examples of supply of digital services are as follows:

• Downloadable electronic media  (e.g. downloading of mobile applications, e-books and movies);
• Subscription-based media (e.g. news, magazines, streaming of TV shows and music, and online gaming);
• Software programs (e.g. downloading of software, drivers, website filters and firewalls);
• Electronic data management (e.g. website hosting, online data warehousing, file-sharing and cloud storage services); and
• Any support services performed electronically to assist in a non-digital transaction (e.g. commission, listing fees and service charges)

Non-digital services

It was also announced in Singapore’s Budget 2021 announcement that GST will also be imposed on imported non-digital services. These refer to services that require human intervention and that are supplied over the Internet, but do not require the recipient to be physically present at the location where the service would be performed, e.g. hairdressing services.

Examples of non-digital services include live interactions with overseas providers of educational learning, fitness training, counselling and telemedicine. This GST imposition will take effect from 1 January 2023.

Low-value goods

Turning to physical goods, GST is currently being collected on the following:

• Goods that are imported via land or sea
• Goods that are imported via air or post that are valued above S$400, with the exception of intoxicating liquors and tobacco, for which GST has to be paid regardless of their value.

However, from 1 January 2023, GST will also be imposed on low-value goods, i.e. physical goods valued at less than S$400, that are imported via air or post.

Examples of such goods would be those purchased from online shopping platforms such as Lazada, Shopee, Taobao, ezbuy and Amazon. Hence, overseas suppliers of such goods will be required to charge GST on the sale of such low-value goods from 1 January 2023. GST-registered businesses subject to the Reverse Charge regime will also be required to account for GST on B2B import of low-value goods procured from local and overseas suppliers from that date onwards.

The following table summarises how GST will be levied for goods and services imported into Singapore.

Register for GST

If you are an overseas supplier, you would have to register for GST under either the retrospective or prospective basis, subject to fulfilling the following conditions:

• Compulsory GST registration
  • Retrospective basis:
    • If the value of your global turnover at the end of each calendar year (i.e. 1 January – 31 December) exceeds S$1 million; and
    • If the value of low-value goods and digital services provided to non-GST registered customers in Singapore at the end of each calendar year (i.e. 1 January – 31 December) exceeds S$100,000
  • Prospective basis:
    • If you can reasonably expect the value of your global turnover to exceed S$1 million for the next 12 months; and
    • If you can reasonably expect the value of your supply of low-value goods and digital services to non-GST registered customers in Singapore to exceed S$100,000 for the next 12 months.

If you are liable for registration, you are required to apply for GST registration within 30 days of:

• The end of the relevant calendar year (i.e. 1 January – 31 December) under the retrospective basis; or
• The day when you became liable for GST registration under the prospective basis

• Voluntary GST registration
  • If you are an overseas supplier but not liable for GST registration in Singapore, you can still apply for voluntary GST registration if you wish to do so. In order to apply for voluntary registration, you will have to let Singapore’s tax authority, namely the Inland Revenue Authority of Singapore (IRAS), know in writing, that you are operating a business and have an intention to make:
    • Supplies that would be taxable if made in Singapore; and
    • Supplies of digital services, directly or on behalf of overseas suppliers, to non-GST registered customers in Singapore.
  • Upon approval of your application, you will have to be registered for at least 2 years. IRAS has the discretion to impose any other conditions for your GST registration, e.g., making you take up a banker’s guarantee.

If you are registering for GST as an overseas supplier, you would be registered under a simplified pay-only regime where you will not be able to claim input tax on taxable purchases made in Singapore, but will benefit from simplified GST reporting and documentation requirements.

You can register for GST by filling in this online form. As part of your application, you will have to submit several documents:

• A signed Declaration Form by the director/partner/sole-proprietor
• A certificate of incorporation (if it is not in English, it should be officially translated into English and notarised before application) that contains the following information:
  • Entity name
  • Date of incorporation
  • Country of incorporation.

You will not be required to appoint a local agent to handle your tax matters in Singapore, but you may do so if you wish.

Displaying GST-Inclusive Prices for Buyers from Singapore

Usually, GST-registered businesses are required to show GST-inclusive prices on all price displays. However, since most GST-registered businesses operate in an international market, it may not be practical for such businesses to display prices that include the Singapore GST. Hence, price display requirements are not imposed on overseas businesses.

How to Pay GST

Once you have registered for GST under the simplified pay-only regime, you will be required to file simplified GST returns. This means that you are expected to report only the value of the digital services supplied, and the GST collected in the relevant accounting period, on a quarterly basis.

You are then required to file your GST returns and make the payment within a month from the end of the accounting period. The four relevant accounting periods are from:

1. January to March;
2. April to June;
3. July to September; and
4. October to December.

Hence, if you are filing your returns for the accounting period of April to June, the due date for filing and payment of GST would be 31 July.

Penalties for Not Charging GST

If the tax payment is not paid by the due date, you may be subject to a 5% penalty. 60 days after the due date, there will be an imposition of an additional 2% penalty for every month the tax remains unpaid (subject to a maximum of 50% of the outstanding tax).

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If you are seeking to sell to the Singaporean market, you should perform your due diligence by checking whether you are required to register, charge and account for GST. Considering that there are penalties for failure to charge or account for GST, it is advisable that you consult a Singapore corporate services firm for advice on registering for GST.

For professional assistance and peace of mind, you can also appoint a corporate services firm to act as your local agent for the handling of all your GST matters in Singapore. Feel free to reach out to our partner corporate services firm if you have further inquiries on registering for and charging GST in Singapore as an overseas vendor.