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Singapore To Implement Budget 2021 GST Reforms Unchanged

Monday, November 1, 2021

Following a consultation exercise, the Inland Revenue Authority of Singapore has said the territory intends to go ahead with various important goods and services tax regime changes without accepting amendments proposed by stakeholders.

The consultation sought input on the following measures announced in the 2021 Budget:

  • The introduction of GST on low-value goods and business-to-consumer (B2C) imported non-digital services from January 1, 2023;
  • New GST rules for the supply of media sales; and
  • Changes to the existing Overseas Vendor Registration ("OVR") and Reverse Charge ("RC") regimes.

IRAS rejected all five amendments proposed by stakeholders, which were aimed at reducing the compliance burden for businesses. A responses paper newly released by IRAS, which explains each submission and the reason it has been rejected, says the reforms will go ahead as originally detailed.

Currently, goods that are valued up to the current GST import relief threshold of SGP400 (known as "low-value goods") that are imported via air or post are not subject to GST. From January 1, 2023, imported low-value goods (LVGs) sold to Singaporean consumers will be liable to GST, and GST will also be introduced on business-to-consumer imported non-digital services.

Further, Singapore announced in the 2021 Budget that the basis for determining whether zero-rating applies to a supply of media sales will be changed from the place of circulation of the advertisement to the place where the customer and direct beneficiary of the service belong. Presently, the GST treatment depends on the place of circulation of the advertisement.

From January 1, 2022, the standard rate of GST will apply where there is a supply of media sales under a contract agreed with a local customer. A zero rate will apply if the service directly benefits either an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard-rated.

The measures are included in the draft Goods and Services Tax (Amendment) Bill 2021.