GST is a tax on local consumption in Singapore that applies to all goods and services consumed within Singapore, irrespective of origin. In 2020, two regimes were introduced to ensure a consistent GST treatment for all goods and services consumed in Singapore. These regimes were further expanded in 2023 to broaden their scope, and they are:
- Overseas vendor registration for Business-to-Consumer (B2C) supplies, and
- A reverse charge for Business-to-Business (B2B) imports.
In 2024, the Singaporean Inland Revenue Authority (IRAS) issued GST registration guidance specifically for overseas vendors to explain GST regulations further and help overseas vendors comply with the registration process for B2C supplies.
Overseas Vendor Registration for B2C Supplies
Under the overseas vendor registration (OVR) regime, overseas vendors exceeding the SGD 1 million annual turnover threshold and making B2C supplies of remote services and low-value goods to customers in Singapore exceeding SGD 100,000 annually must register for GST in Singapore.
According to the IRAS guide, an overseas vendor has no business establishment, fixed establishment, or usual place of residence in Singapore or has establishments both in and outside Singapore. Still, the establishment most directly concerned with the supply is outside Singapore. This includes:
- overseas vendors;
- overseas electronic marketplace operator;
- overseas re-deliverer.
Remote services are defined as any services for which there is no necessary connection between the customer’s physical location and where the service is performed when it is provided. Some of the remote services are:
- Downloadable digital content,
- Subscription-based media,
- Software programs,
- Electronic data management,
- Support services performed remotely to arrange or facilitate a transaction that may not be digital.
Low-value goods are those that, at the point of sale, are either not dutiable or have their customs or excise duty waived under the Customs Act, are not exempt from GST, are located outside Singapore and delivered via air or post, and have a value not exceeding the GST import relief threshold of SGD 400.
Practical Implications for Overseas Vendors
As stated by the IRAS, GST-registered overseas vendors must account for GST on B2C supplies of remote services and low-value goods made to customers in Singapore. While the rules for overseas vendors are clear, there are some specific rules for the overseas electronic marketplace operator and re-deliverer.
Implications for overseas electronic marketplace operators
Overseas electronic marketplace operators may be regarded as deemed suppliers for the B2C supplies of:
- low-value goods made by local and overseas suppliers through a marketplace,
- remote services made by overseas suppliers through a marketplace.
These vendors must include the value of all these B2C supplies made through the marketplace when determining GST registration liability, in addition to their supplies made directly to customers in Singapore,
Implications for overseas re-deliverers
In general terms, overseas re-deliverers are vendors who arrange with the customer to deliver or facilitate the delivery of goods to Singapore and provide or facilitate the use of an address outside of Singapore for delivery of the goods or purchase or facilitate the purchase of the goods.
Re-deliverers may be treated as suppliers of low-value goods if they help Singaporean customers purchase and deliver goods.
Overseas vendors must pay close attention if they are required to register for GST purposes in Singapore. Once they exceed the turnover threshold and register for GST purposes, they must charge and account for GST on remote services and low-value goods supplied to Singaporean customers.
To achieve this, all newly registered entities under the OVR regime should adjust their systems and processes to correctly identify, capture, and account for GST on low-value goods supplies, and remote services.
Aleksandar Marinkovic
1stopVAT Tax Researcher