To level the playing field for local businesses so that they can compete effectively with online/ overseas suppliers and ensure parity in GST treatment for goods and services consumed locally, consumers in Singapore will need to pay 8% Goods and Services Tax (GST) on the purchase of low-value goods (LVG) and non-digital services from 1 Jan 2023, as announced in Budget 2021.

We’re here to answer 5 questions you have on buying goods and services online:

 

  1. What are LVG?

    As announced in Budget 2021, with effect from 1 Jan 2023, you will need to pay GST on the purchase of low-value goods (LVG) from GST-registered suppliers which are imported into Singapore via air or post. LVG are goods that are located outside Singapore at the point of sale and will be imported via air or post, and have a value not exceeding S$400.  Some examples of low-value goods are personal care items (make-up, shampoo), apparel (clothes, shoes), IT/electronic equipment (earpods, charger), homeware (lighting, bedsheets). This includes any item valued at $400 and below bought online directly from a GST-registered seller or through a GST-registered marketplace or redeliverer, which is then shipped to Singapore via air or post.

    For Goods[1] - When and How GST is Paid


[1] GST is not charged on investment precious metals which are exempted from GST.

2. How do I know if the suppliers are GST-registered?

More than 300 overseas vendors, including overseas online marketplaces with various sellers on their platforms, have registered for GST under Singapore’s Overseas Vendor Registration (OVR) regime to charge, collect and remit the GST to IRAS. GST Registered Business Search lets you check whether the overseas supplier is registered for GST.

3. When will I incur GST on LVG?

Find out about the different scenarios when buying LVG online.

Purchase of LVG from a GST-registered overseas seller

Overseas Retailer A is registered for GST as an OVR vendor from 1 Jan 2023.

I purchase a monitor valued at S$140 from Retailer A’s website on 8 Jan 2023 to be shipped into Singapore via air for S$10. Retailer A will charge GST on the monitor and shipping fees at the point of sale. GST is not payable to Singapore Customs when the transporter imports the monitor as GST has already been collected by the GST-registered overseas seller*.

*If the overseas seller/EMO/redeliverer is not GST-registered, GST is not payable to Singapore Customs when the goods enter Singapore, as the goods (with CIF value (Cost, Insurance and Freight) not exceeding S$400) qualifies for import relief.

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Purchase of LVG from GST-registered and non-GST-registered sellers via a GST-registered Electronic Marketplace Operator (EMO)

Online shopping Platform B is an EMO registered for GST in Singapore. Both Shop G (GST-registered supplier) and Shop H (non-GST-registered supplier) list goods on Platform B.

I purchase a bicycle valued at S$300 from Shop G, and a helmet valued at S$50 from Shop H, on Platform B to be shipped into Singapore via air with no additional shipping fees charged. Regardless of the GST registration statuses of Shops G and H, Platform B will charge and collect GST on the bicycle and the helmet at the point of sale. GST is not payable to Singapore Customs when the transporter imports the goods as GST has already been collected by the GST-registered EMO*.

*If the overseas seller/EMO/redeliverer is not GST-registered, GST is not payable to Singapore Customs when the goods enter Singapore, as the goods (with CIF value (Cost, Insurance and Freight) not exceeding S$400) qualifies for import relief.
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Purchase of LVG from a non-GST-registered seller via a GST-registered redeliverer

C-Post is registered for GST in Singapore. It provides redelivery services to Singapore consumers.

I purchase a mug valued at S$50 online from a non-GST-registered Company D which is located in Korea. As Company D does not provide international shipping, I engage C-Post to receive the mug at C-Post’s warehouse in Korea, and redeliver the mug to me in Singapore via air freight for a delivery fee of S$20. C-Post will charge GST on the sale of the mug and delivery fees before it ships the mug into Singapore. GST is not payable to Singapore Customs when the transporter imports the mug as GST has already been collected by the GST-registered redeliverer*.

*If the overseas seller/EMO/redeliverer is not GST-registered, GST is not payable to Singapore Customs when the goods enter Singapore, as the goods (with CIF value (Cost, Insurance and Freight) not exceeding S$400) qualifies for import relief.

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Purchase of single LVG from a GST-registered overseas seller

Overseas online fashion Retailer F is registered for GST in Singapore as an OVR vendor.

I purchase a dress from Retailer F on 5 Jan 2023 to be shipped into Singapore via air. The dress is listed for sale at S$420 (before GST), inclusive of a separate and explicit charge for transportation and insurance of S$25. As the sales value  excluding transportation and insurance fees is S$395 which falls below the S$400 threshold, it is a LVG, which means that the GST will be collected by Retailer F. The GST chargeable by Retailer F will be on the full selling price (i.e. CIF value) of S$420. As GST is collected at the point of sale, Retailer F will pass information showing that GST has been paid on the dress and its GST registration number to the transporter, who will take up the appropriate non-payment permit and not have to pay GST to Singapore Customs.

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Purchase of multiple LVG from a GST-registered overseas seller

Overseas online Retailer J is registered for GST in Singapore as an OVR vendor.

I purchase 10 belts from Retailer J on 3 Jan 2023, with each belt priced at S$100. The belts will be shipped from overseas to Singapore via air, with no additional shipping fees incurred. Even though the combined value of the belts at S$1,000 is greater than the S$400 threshold, each belt is still a LVG as the threshold applies to each individual item. Retailer J will charge GST on the belts. As GST is collected at the point of sale, Retailer J will pass information showing that GST has been paid on the belts and its GST registration number to the transporter, who will take up the appropriate non-payment permits and not have to pay GST to Singapore Customs.

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4. How do I know if I have been correctly charged GST on the sale of LVG?

To determine whether the supplier has correctly charged you GST on the sale of LVG that will be imported via air or post, refer to this flowchart:

 

5. What are non-digital services?

You are already paying GST for digital services such as e-books, mobile games, music streaming services and software subscription fees. Since 1 Jan 2020, digital services bought online from GST-registered overseas suppliers are subject to GST.  From 1 Jan 2023, you will also need to pay GST for non-digital services bought online from GST-registered overseas suppliers including:

    • Distance learning classes or educational services
    • Fitness training over video platforms
    • Professional services (e.g., investment advisory, tax and accounting services) except for financial services which are exempt from GST
    • Telemedicine

    For Services[3] – When and How GST is Paid


    [3] Not applicable for services which are exempted from GST (e.g. certain financial services or zero-rated services).

    Purchase of a non-digital service

    University E is registered for GST in Singapore as an OVR vendor.

    I sign up for a remote learning course on 3 Jan 2023 with University E, established in the United States. I attend the course virtually from Singapore, while the facilitator conducts the course physically in the US and live streams it. As the remote learning course is a non-digital service, University E will charge GST on the supply of the remote learning course.
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    Staying vigilant against phishing scams

    Consumers are reminded to be vigilant and not be deceived by fake SMSes, emails and WhatsApp messages with spoofed IRAS' or agency's name. IRAS and Singapore Customs will not request for GST payments from consumers. IRAS and Singapore Customs will also not solicit personal details or any confidential information from consumers via email or unsecured web links. For tax transactions including filing, payments and refunds, consumers should use relevant forms and digital services on myTax Portal secured by Singpass login.

    More details can be found at IRAS Advisory on Scam and Fraudulent Activities.