More than 100 overseas digital service providers have registered for GST under Singapore’s Overseas Vendor Registration (OVR) regime, and will be charging GST on their sales of digital services to Singapore consumers with effect from 1 Jan 2020.

Currently, only locally procured services are subject to GST, while services procured from overseas are not. Announced in the 2018 Budget Statement, the OVR regime is intended to achieve a level playing field in GST treatment for services, whether procured locally or overseas.

Similar measures have been taken by countries like Australia, Japan, New Zealand and South Korea from as early as 2015.  

Digital services are defined as services that are supplied over the internet or an electronic network that require minimal or no human intervention, and are impossible without the use of information technology.

Under the OVR regime, overseas digital service providers with a yearly global turnover of more than S$1 million that sell more than S$100,000 worth of digital services to customers in Singapore in a 12-month period are required to register for GST and charge GST.

Examples of digital services purchased from overseas service providers include:

Meanwhile, there will be no changes in the GST treatment for online purchases of goods: GST remains payable on all goods imported into Singapore, with the exception of goods valued S$400 and below imported via air or post.

What to expect from Jan 2020

Prices paid by consumers to GST-registered overseas service providers for the purchase of digital services will be inclusive of GST from 1 Jan 2020. Overseas service providers will declare and pay the GST collected to IRAS. Consumers refer to individuals and non-GST registered businesses.

GST-registered businesses that make similar purchases may have to account for GST via reverse charge [1] instead. They should provide their GST registration number to the overseas service providers so that GST will not be charged.

To check whether an overseas digital service provider is registered for GST in Singapore, consumers and businesses may search for the business using the GST-registered Businesses Search e-Service on the IRAS website. Consumers should alert IRAS if they encounter any wrongful collection of GST by unregistered overseas digital service providers.

What consumers need to do

As overseas digital service providers use information such as payment and billing information to determine if customers reside in Singapore, businesses and consumers are responsible for providing complete and accurate information to registered overseas digital service providers. It is a serious offence to provide incorrect or false information to overseas digital service providers to avoid paying GST on digital services.  

For more information, please refer to the IRAS webpage on Purchasing Digital Services from Overseas Vendors.

Inland Revenue Authority of Singapore

[1] Reverse Charge is a GST collection mechanism where the local business customer pays GST to the tax authority directly, on the services it imports. This is in contrast to the OVR regime where the overseas supplier collects GST from the local customer and pays GST to the tax authority.  Together with the OVR regime, reverse charge will be introduced on 1 Jan 2020 to tax imported services.