Since 1 Jan 2020, GST is payable on digital services provided by GST-registered overseas service providers.
From 1 Jan 2023, GST applies to all remote services (i.e. digital services and non-digital services) purchased by consumers in Singapore from GST-registered overseas service providers. From 1 Jan 2023, GST is also payable on goods valued at S$400 or below which are imported into Singapore via air or post and purchased from GST-registered suppliers.
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GST on Digital Services
Singapore consumers who purchased digital services from GST-registered overseas service providers have to pay GST.
As announced in Budget 2018, this is intended to achieve a level playing field in GST treatment for services, whether procured locally or overseas.
When is GST payable
GST is payable when you purchase digital services from GST-registered overseas service providers.
Digital services are automated services supplied over the Internet with minimal or no human interaction. This includes:
Only digital services provided by GST-registered service providers are subject to GST.
Overseas digital service providers with an annual 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. Some overseas digital service providers may also be registered on a voluntary basis.
You can use the GST-registered Business Search to check whether an overseas digital service provider is registered for GST.
Examples of digital service purchases
The following examples illustrate how the GST change may affect you as a consumer.
Example 1: Subscribing to Video Streaming Services
As Company A is registered for GST under the OVR regime with effect from 1 Jan 2020, Grace will have to pay monthly subscription fees inclusive of GST. Company A will be required to pay the GST collected to IRAS.
Example 2: Mobile Gamer
Before 1 Jan 2020, no GST is payable on such purchases. However, since Company B is registered under the OVR regime, GST is payable on all paid apps and in-app purchases from Company B’s app market with effect from 1 Jan 2020.
Company B will be required to pay the GST collected to IRAS.
Example 3: PC/Console Gamer
Company C will be required to pay the GST collected to IRAS.
Example 4: Designer
Company D is registered under the OVR regime. GST will not be applicable for the month of December since the OVR regime only came into effect on 1 Jan 2020.
However, GST will be chargeable on his remaining 11 months’ worth of subscription fees from 1 Jan 2020 onwards. Company D will be required to pay the GST collected to IRAS.
GST on Remote Services from 1 Jan 2023
The Minister for Finance announced in Budget 2021 that from 1 Jan 2023, GST will also be charged on imported non-digital services. This means that all Business-to-Consumers (B2C)1 supplies of imported services, whether digital or non-digital, which can be supplied and received remotely (i.e. known as “remote services”), will be taxed. The change is intended to level the GST treatment for all remote services, whether procured locally or from overseas.
Digital services which are currently subject to GST will remain taxable. If you are a consumer in Singapore, from 1 Jan 2023, you will need to pay GST on supplies of all remote services (i.e. digital services and non-digital services) purchased from GST-registered overseas service providers.
From 1 Jan 2023, you will also need to pay GST on goods valued at S$400 or below which are imported into Singapore via air or post and purchased from GST-registered suppliers.
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.
When is GST payable
From 1 Jan 2023, GST applies on your purchases of remote services (i.e. digital services and non-digital services) from GST-registered overseas service providers.
Remote services are services which do not require the customer to be physically located where the services are performed. Examples of remote services include:
- downloadable digital content (e.g. mobile applications, e-books and movies),
- subscription-based media (e.g. news, magazines, streaming of TV shows and music),
- software programs (e.g. software, drivers and website filters),
- electronic data management services (e.g. website hosting and cloud storage),
- support services performed via electronic means to arrange or facilitate transactions, which may not be digital in nature (e.g. service or booking fee charged to the suppliers or customers),
- professional services (e.g. investment advisory, brokerage, consultancy services),
- personal services (e.g. online counselling, online personal trainer, telemedicine, online dating and matchmaking),
- educational, professional membership and examination services (e.g. distance learning classes, online examinations to obtain professional certification, membership subscription to professional associations).
On the other hand, services which require the customer to be physically located where the services are performed will not be regarded as remote services. Examples of such services are hairdressing services, physical entry to entertainment or sporting events or land tours. If you consume these services overseas, you may have to pay the prevailing taxes (if any) imposed on such services in those countries.
The following examples illustrate how the GST change may affect you as a consumer.
Example 1: Online classes
Lucas purchases live online painting classes from an overseas Company A. Before 1 Jan 2023, Lucas does not have to pay GST on the classes he buys from Company A.
As Company A is registered for GST with effect from 1 Jan 2023, Lucas will be charged GST on the course fee.
Example 2: Online personal trainer services
Natalie purchases fitness coaching sessions from overseas Company B, which offers online personal fitness trainer services. Before 1 Jan 2023, no GST is payable on the coaching fees. However, from 1 Jan 2023, Natalie will have to pay GST for her purchase of fitness coaching sessions, if Company B is GST-registered.
Price display
As most of the GST-registered overseas service providers operate in a global market, it may not be feasible for them to display prices inclusive of Singapore GST on their websites or online stores.
Some of these providers may only be able to determine whether Singapore GST is chargeable after verifying that you reside in Singapore. Once the GST-registered provider has ascertained that Singapore GST is chargeable, the price that they charge you will be inclusive of GST.
Only GST-registered providers are authorised to charge and collect GST from consumers in Singapore. You should email to IRAS if you encounter any wrongful collection of GST by unregistered overseas providers.
Customer’s responsibility to provide correct information
Overseas service providers will determine if you reside in Singapore based on information you provide to them. This includes your payment and billing information.
You are responsible for providing complete and accurate information to GST-registered overseas service providers so that they can determine whether Singapore GST is applicable.
It is a serious offence to provide incorrect or false information to overseas providers to avoid paying GST (e.g. providing a false address to misrepresent yourself as residing outside Singapore or using a business’ GST registration number)
Upon conviction, offenders may face penalties of up to 3 times the amount of tax chargeable and a jail term of up to 7 years.
FAQs
Does the OVR regime affect food delivery services in Singapore?
However, do note that domestic GST rules still apply to goods and services provided by local GST-registered companies. As such, if the delivery service provider or its partnering restaurants are already registered for GST under the current rules, GST will be charged on the delivery fees or purchased food items as they are locally procured goods and services.