Consultancy services (e.g. legal, accounting, engineering service) and other similar professional services are subject to GST.  However, services that qualify as international services under section 21(3) of the GST Act can be zero-rated.

Please refer to Providing international services for a complete list of international services under section 21(3).

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Zero-rating of consultancy and professional services

Type of servicesGST treatment
Services of engineers, accountants, lawyers and other similar consultancy/ professional services

e.g. Consultancy services on the feasibility of conducting a business, provided to an overseas customer

Zero-rate under section 21(3)(k) of the GST Act if the services: 

  1. Are supplied under a contract with an overseas person wholly in his business capacity; and
  2. Directly benefit an overseas person wholly in his business capacity and/or a GST-registered person belonging in Singapore. 

The services must not be directly in connection with land or goods situated in Singapore. In addition, any part of the supply of services relating to accommodation and entertainment will not qualify for zero-rating. 

The overseas person can be in Singapore to receive the services. To determine the belonging status of your customer, please refer to Belonging status of your customer.

If the conditions above are not met, you must charge GST at the prevailing rate.

Services of estate agents, auctioneers, architects, surveyors and engineers and others involved in matters relating to land

Zero-rate under section 21(3)(e) of the GST Act if the services are made directly in connection with land or buildings located outside Singapore. 

For example, an architect in Singapore provides design services in respect of a building located in China; an estate agent in Singapore sells a house in London. 

The services must not include:

  1. The supply of a right to promulgate an advertisement by means of any medium of communication; and/or
  2. The promulgation of an advertisement by means of any medium of communication.
If the conditions above are not met, you must charge GST at the prevailing rate.

Recovering expenses from clients

In the course of providing consultancy or professional services, you may pay for expenses on behalf of your client. When you subsequently recover the expenses from your client, the GST treatment of the recovery depends on whether you have acted as a principal or agent in purchasing the goods or services: 

  • If you have incurred the expenses as a principal, you must charge GST if the recovery constitutes a taxable supply of goods or services.
  • If you have incurred the expenses as an agent, you need not charge GST as the recovery does not constitute a supply. 

 

For more information on the GST treatment for the recovery of expenses, please refer to Recovering Expenses.

FAQs

I have paid for and subsequently recovered expenses incurred on behalf of my client. My client is legally responsible for paying the expenses to the supplier. Am I or is my client entitled to claim the GST incurred on the expenses?

Your client is entitled to claim the GST incurred on the expenses, subject to the conditions for input tax claim. On the other hand, you are not entitled to claim the GST incurred.

I have incurred the expenses as a principal and the recovery of expenses from my client is thus considered a reimbursement. Am I or is my client entitled to claim the GST incurred on the expenses?

You are entitled to claim the GST incurred on the expenses, subject to the conditions for input tax claim. On the other hand, your client is not entitled to claim the GST incurred.

The service that I provide qualifies as an international service. Therefore, I charge GST to my customer at 0%. Can I claim the GST incurred for providing the international service?

Yes. The input GST can be claimed if you satisfy all the conditions for input tax claim.

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