GST on Imports of Low-Value Goods

Overview

With effect from 1 Jan 2023, Minister for Finance announced in Budget 2021 that GST will be extended to:

1. Goods imported via air or post that are valued up to (and including) the current GST import relief threshold of S$400; and
2. Business-to-consumer¹ (“B2C”) imported non-digital services.

The change will ensure a level playing field for our local businesses to compete effectively. The change also ensures that our GST system remains fair and resilient as the digital economy grows. 

For more information, please refer to the e-Tax Guide GST: Taxing imported low-value goods by way of the overseas vendor registration regime (PDF, 487KB).

GST on low-value goods imported via air or post

With this change, GST on low-value goods will be effected as follows:

1. Overseas Vendor Registration for B2C import of low-value goods; and
2. Reverse charge for Business-to-Business¹ (“B2B”) import of low-value goods.

_{¹ Business-to-Consumer (“B2C”) supplies refer to supplies made to non-GST registered persons, which include individuals and businesses that are not registered for GST. On the other hand, Business-to-Business (“B2B”) supplies refer to supplies made to GST-registered persons, including companies, partnerships and sole-proprietors.}

Overseas Vendor Registration (OVR) for B2C import of low-value goods

Imports of low-value goods

Low-value goods are goods which at the point of sale:

1. are not dutiable goods, or are dutiable goods, but payment of the customs duty or excise duty chargeable on the goods is waived under section 11 of the Customs Act;
2. are not exempt from GST;
3. are located outside Singapore and are to be delivered to Singapore via air or post; and
4. have a value not exceeding the GST import relief threshold of S$400.

In the above definition, ‘point of sale’ refers to the time at which an order confirmation is issued by the OVR Vendor or such other time as agreed with the Comptroller, whilst ‘Singapore’ refers to customs territory.

If you are an overseas supplier

If you are a supplier of low value goods² who belong outside Singapore, you are required to register for GST in Singapore if you:

1. have an annual global turnover exceeding $1 million; and
2. make B2C supplies of low-value goods to Singapore exceeding $100,000. 

Once registered for GST, you are required to charge and account for GST on B2C supplies of low-value goods made to Singapore.

If you are an electronic marketplace operator or redeliverer

Under certain conditions, whether you are a local or an overseas operator of an electronic marketplace, you may be regarded as the supplier of the low-value goods² supplied by the local and overseas suppliers through your marketplace. 

If you are a local or overseas redeliverer³, you may also be regarded as the supplier of low-value goods which you assist to purchase and/or deliver to a customer in Singapore, under certain conditions. 

In such cases, you are required to include the value of these supplies of low-value goods to determine your GST registration liability. If you are liable for GST registration or are already GST-registered, you are required to charge and account for GST on B2C supplies of low-value goods treated as supplied by you, on behalf of the local and overseas suppliers. 

To ease compliance burden, if you are an overseas supplier, electronic marketplace operator or redeliverer, you will be registered under a simplified regime, with reduced registration and reporting requirements.

_{² If you also supply remote services whether directly or on behalf of overseas suppliers via your electronic marketplace, you will be required to aggregate the value of the B2C supplies of remote services and low-value goods to determine your GST registration liability. Once you are liable for GST registration or are already GST registered, you are required to charge and account for GST on both B2C supplies of remote services and low-value goods to Singapore.}

_{³ A redeliverer is a person who, under an arrangement with the customer:} 

_{i. delivers or facilitates the delivery of goods to Singapore; and
ii. provides or facilitates the use of an address outside of Singapore for delivery of the goods; or
iii. purchases or facilitates the purchase of the goods.} 

_{In the above definition, ‘Singapore’ refers to custom territory. General freight forwarders who do not facilitate the use of an address nor facilitate the purchase of goods are not treated as redeliverers}

If you are a local supplier with low-value goods outside Singapore 

Local GST-registered and non-GST registered suppliers belonging in Singapore may store their goods outside Singapore for sale to customers. Currently, the sales of such goods warehoused overseas by local suppliers to customers in Singapore are treated as outside the scope of GST, since the goods are located outside Singapore at the time of supply.

To achieve parity in the tax treatment for local suppliers and overseas ones, direct sales⁴ of low-value goods by local suppliers to customers who are not GST-registered in Singapore will fall within the scope of GST.

Consequently, a GST-registered local supplier would be required to charge and account for GST, at the standard-rate, on his direct sales of low-value goods to customers who are not GST-registered in Singapore.

A non-GST registered local supplier who makes direct sales of low-value goods to customers who are not GST-registered in Singapore would be required to include such supplies in his taxable turnover in determining his GST registration liability. The domestic registration threshold will apply to the local supplier i.e., taxable turnover of $1 million.

_{⁴ Direct sales refer to goods that are supplied directly by local and overseas suppliers to customers who are not GST-registered in Singapore (e.g., through the supplier’s own website), instead of supplying the goods through an electronic marketplace or redeliverer.}

Please refer to the following videos for more information on the extended OVR regime:

Local Vendors

Overseas Vendors*

*Includes overseas establishments of local suppliers supplying remote services

If you are a Transporter or Declaring Agent for Low-value Goods imported into Singapore

If you are a transporter assisting your client to transport low-value goods (LVG) into Singapore or a declaring agent assisting your client to take up permits for such LVG, you will need to take note of the revised import procedures and permit requirements from 1 Jan 2023.  For more details, please refer to the slide and the FAQ for transporters.

If you are a newly registered entity 

If you are a newly-registered entity under the Overseas Vendor Registration Regime, you will need to make changes to your system and processes to identify, capture and account for GST on supplies of LVG and remote services correctly.

You may wish to use the following preparation checklists:

1. Preparation checklist for entities registered under the OVR Regime (LVG)
2. Preparation checklist for entities registered under the OVR Regime (Remote Services)

Reverse charge for B2B import of low-value goods

If applicable, a GST-registered customer who is subject to reverse charge (“RC business”) should perform reverse charge on low-value goods. The requirement to perform reverse charge applies to all low-value goods and includes low-value goods purchased from local and overseas suppliers, electronic marketplace operators and redeliverers, regardless of whether they are GST-registered or not. 

For more information on who is subject to reverse charge, you may refer to the IRAS e-Tax Guide GST: Reverse Charge (PDF, 1202KB).

FAQs

A. Mechanics of Overseas Vendor Registration

B. Overseas Vendor Registration for Businesses