This webpage explains how the implementation of the overseas vendor registration regime affects you as an overseas business.
On this page:
Overview
As GST is a tax on local consumption in Singapore, it should apply to all goods and services consumed in the country, whether the services are obtained from local or overseas suppliers, or whether the goods are purchased locally or imported from overseas. To level the GST treatment of all services and goods consumed in Singapore, two regimes were implemented in 2020 with the scope expanded in 2023:
- Overseas Vendor Registration for Business-to-Consumer1 (“B2C”) Supplies:
- Reverse Charge for Business-to-Business2 (“B2B”) Imports:
GST-registered overseas vendors must account for GST on B2C supplies of remote services and low-value goods made to customers in Singapore.
GST- registered businesses which are not entitled to full input tax claims must account for GST, as if they were the supplier, on imported services and low-value goods.
1 B2C supplies refer to supplies made to non-GST registered persons, including individuals and businesses that are not registered for GST.
2 B2B imports refer to supplies made to GST-registered persons, including companies, partnerships and sole-proprietors.
Overseas Vendor Registration for B2C supplies
Under the overseas vendor registration (“OVR”) regime, overseas businesses with an annual global turnover exceeding S$1 million and that make B2C supplies of remote services and/or low-value goods to customers in Singapore exceeding S$100,000 annually, will be required to register for GST in Singapore. To ease compliance, these overseas businesses will be registered under a simplified pay-only regime.
Remote services generally refer to services where the recipient of the services need not be at the location where the services are physically performed in order to enjoy/consume the services.
Low-value goods are goods which at the point of sale:
- 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;
- are not exempt from GST;
- are located outside Singapore and are to be delivered to Singapore via air or post; and
- have a value not exceeding the GST import relief threshold of S$400.
If you are an overseas supplier
You are required to register for GST in Singapore if you have an annual global turnover exceeding S$1 million and make B2C supplies of remote services and/or low-value goods to customers in Singapore exceeding S$100,000 annually.
Once registered for GST, you must charge and account for GST on such B2C supplies to Singapore.
If you are an overseas electronic marketplace operator
Under certain conditions, if you are an operator of an electronic marketplace, you may be regarded as the supplier of the following B2C supplies of:
- low-value goods made by local and overseas suppliers through your marketplace
- remote services made by overseas suppliers through your marketplace.
You must include the value of such B2C supplies made through your marketplace to determine your GST registration liability. Once you are registered for GST, you must charge and account for GST on such B2C supplies made through your marketplace to customers in Singapore. This is in addition to your own supplies made directly to customers in Singapore.
If you are an overseas redeliverer
Under certain conditions, if you are a redeliverer3, you may be regarded as the supplier of low-value goods if you assist to purchase and/deliver them to a customer in Singapore.
You must include the value of these B2C supplies to determine your GST registration liability. Once you are registered for GST, you must charge and account for GST on the B2C supplies of low-value goods made to customers in Singapore.
For more information on the OVR regime, please refer to the following e-Tax Guides:
- For remote service GST: Taxing imported remote services by way of the overseas vendor registration regime (PDF, 420KB)
- For low-value goods GST: Taxing imported low-value goods by way of the overseas vendor registration regime (PDF, 487KB).
Please refer to the following video for more information on the OVR Regime:
3 A redeliverer is a person who arranges with the customer to:
i. deliver or facilitate the delivery of goods to Singapore; and
ii. provide or facilitate the use of an address outside of Singapore for delivery of the goods; or
iii. purchase or facilitate the purchase of the goods.
If you are a newly registered entity
If you are a newly-registered entity under the OVR 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:
FAQs
A. Mechanics of Overseas Vendor Registration
How does overseas vendor registration work?
Under the regime, suppliers belonging outside Singapore are required to register for GST if they make supplies exceeding the registration thresholds. Once registered, they must charge and account for GST on supplies of remote services and low-value goods made to non-GST registered customers in Singapore. Under certain conditions, local and overseas operators of electronic marketplaces may also be regarded as the supplier of (i) remote services made by the overseas suppliers or (ii) low-value goods made by overseas and local suppliers, through these marketplaces. In such cases, the operators are required to register, charge and account for GST on these supplies, instead of the suppliers.
Do the electronic marketplace operators need to account for GST on supplies of low-value goods made through the marketplace by local GST-registered suppliers or local non-GST registered suppliers?
If the electronic marketplace operator (whether overseas or local) meets the conditions to be treated as the supplier of the low-value goods, the electronic marketplace operator will be the party responsible for collecting GST on low-value goods supplied by the local suppliers through its marketplace.
In other words, as long as the electronic marketplace operator is registered for GST, it must charge GST on all supplies of low-value goods made through its marketplace by local and overseas suppliers to non-GST registered customers in Singapore, regardless of whether these suppliers are GST-registered or not.
What is the scope of services that would be subject to GST under the overseas vendor registration?
From 1 Jan 2020, GST applies to all digital services, including downloadable content, subscription-based media and software programs. From January 1, 2023, GST will apply to all services (i.e. digital and non-digital services) which can be supplied and received remotely (“remote services”).
Remote services refer to any services where, at the time of the performance of the service, there is no necessary connection between the physical location of the recipient and the place of physical performance. These include digital services as well as non-digital services such as personal services (e.g. online counselling, matchmaking and telemedicine services), consultancy and advisory services (e.g. data analysis and research services).
Do travel arranging services fall within the scope of remote services under the OVR regime?
Prior to 1 Jan 2023, services comprising the arranging of accommodation or international transport of passengers (i.e., travel arranging services) supplied electronically to consumers in Singapore would fall within the scope of digital services under the OVR regime for digital services.
With the change in the basis for determining whether zero-rating applies to a supply of travel arranging services from 1 Jan 2023, all travel arranging services (whether digital or non-digital) would fall within the scope of remote services under the OVR regime if supplied by an overseas supplier to non-registered customers in Singapore.
How do overseas suppliers and electronic marketplace operators know whether the customer they are supplying services to, is in Singapore?
For consistency with current GST rules, the existing belonging status guidelines will continue to apply. That is, for an individual, the customer is treated as belonging in Singapore if his usual place of residence is in Singapore.
Given that digital services are transacted over the internet with limited information available in some instances, overseas suppliers may determine the belonging status of the customer by maintaining two pieces of non-conflicting evidence, based on appropriate proxies, such as billing address, IP address and credit card information. For non-digital services, overseas suppliers may also rely on the same proxies for determining the belonging status of the customer.
How do overseas suppliers and electronic marketplace operators know whether the supply of services they make is a B2C supply?
How do overseas suppliers and electronic marketplace operators report and account for GST under overseas vendor registration?
If overseas suppliers and electronic marketplace operators incur GST on any expenses in Singapore, can they claim the GST under overseas vendor registration?
B. Overseas Vendor Registration for Businesses
I am an overseas online merchant supplying low-value goods to customers in Singapore. Will I need to register for GST under overseas vendor registration?
Overseas suppliers, with a global annual turnover of at least $1 million, making B2C supplies of low-value goods and remote services to Singapore exceeding $100,000 are required to register, charge and account for GST on these supplies.
What changes do I need to make to my accounting system?
If you are liable for GST registration under the OVR regime, you are required to charge and account for GST on remote services and low-value goods supplied to customers who are not GST-registered in Singapore. As such, your accounting systems should be modified to account for GST on such supplies. You may refer to the preparation checklists to help you prepare for changes to be made to your systems and processes.