Monday, 19 February 2018

Singapore to introduce GST on imported services from January 2020

Singapore proposes to introduce GST on imported services on or after January 1, 2020 to ensure a fair and resilient tax system in digital economy; B2B imported services to be taxed via reverse charge mechanism, whereby local business customer, making taxable supplies, shall account for GST to IRAS on services it imports and in turn, claim input tax subject to GST input tax recovery rules; However, businesses that (i) make exempt supplies, or (ii) do not make any taxable supplies need to apply reverse charge; Taxation of B2C imported services will take effect through an Overseas Vendor Registration (OVR) mode, which requires overseas suppliers and electronic marketplace operators making significant supplies of digital services to local consumers, to register with IRAS for GST; IRAS to release further details by end-February 2018; Explaining the rationale, Minister for Finance Mr. Heng Swee Kea states, “Today, services such as consultancy and marketing purchased from overseas suppliers are not subject to GST. Local consumers also do not pay GST when they download apps and music from overseas. This change will ensure that imported and local services are accorded the same treatment.”; As regards import of goods, Mr. Heng Swee Kea states that Govt. will review the international discussions on applicability of GST before deciding on measures to take : Singapore Budget 2018 

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