From 1 January 2020, GST will be applied on B2B imported services and B2C imported digital services.
Background
GST is a tax on local consumption, i.e. it should be levied on all services consumed in Singapore whether they are procured from local or overseas suppliers.
However, based on the current GST rules, services (other than an exempt supply) supplied by suppliers who belong in Singapore are subject to GST while those services supplied by suppliers who belong outside of Singapore are not subject to GST.
In order to address the current disparity in GST treatment of services consumed in Singapore, the government announced in Budget 2018 that GST will also apply to imported digital services in the context of business-to-consumer (B2C) and imported services in the context of business-to-business (B2B) from 1 January 2020.
Reverse Charge & Reverse Charge & Overseas Vendor Registration at one glance
Who is subject to RC?
- GST-registered persons, who are not entitled to full input tax claim
- Non-GST registered persons, whose imported in-scope services exceed $1 million in a 12-month period and would not be entitled to full input tax credit if registered for GST
What is in-scope?
All services except the following:
- Exempt supplies
- Certain services that qualify for zero-rating if made by SG GST-registered entities
- Those directly attributable to taxable supplies
Who is subject to OVR?
Overseas suppliers or electronic marketplace operators, making/supplying digital services (retrospective and prospective basis) of:
- Global annual sales of >S$1 million; and
- Annual sales to non-GST registered SG customers of >S$100k
Certain exceptions may apply.
What is in-scope?
Supply of downloadable digital content, subscription-based media, software programs, electronic data management and storage, certain support services performed via electronic means, advertisement services circulated wholly in Singapore
How can we help?
Led by a SIATP Accredited Tax Practitioner, our team is ready to provide your organisation with advisory and compliance services.
- Impact assessment and determine the requirements to register for GST
- Implement internal processes and controls to ensure compliance with amended GST Act and regulations
- Post implementation review to ensure continuous compliance
- Planning and transaction advisory
- Quarterly/monthly review, computation and filing
- Review of past GST returns to identify anomalies
Contact us at enquires@houseofaccountants.sg now.
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