Singapore updates Low Value Goods GST policy

Francisco Gomes
February 8, 2023

Singapore’s new Low Value Goods (LVG) rules came into effect at the beginning of the year. As of 1 January 2023, private consumers in the country must pay 8% GST on goods valued up to SGD 400 imported via air or post from GST-registered suppliers.

From 1 January 2024, the GST will increase to 9%.

Prior to this change , Low Value Goods procured locally from GST-registered businesses were subject to GST. Goods imported overseas via air or post were not. This change treats all goods consumed in Singapore in relation to GST.

The SGD 400 threshold does not include:

  • Transportation
  • Insurance costs
  • Any duties payable to Singapore Customs

For example, a private individual orders an item that costs SGD 390. Additional transportation fees are SGD 20. As the threshold excludes transportation fees, the product’s value is SGD 390. The consumer will have to pay GST on the purchase to the supplier.

Since 1 January 2023, GST is also levied on supplies of imported non-digital services purchased from GST-registered overseas suppliers. As a result, all B2C supplies of imported services – digital or otherwise – that are supplied and received remotely are taxed.

Non-established suppliers – such as electronic marketplace operators and re-deliverers – must register, charge and account for GST where:

  1. Their global annual turnover exceeds SGD 1 million
  2. The value of B2C supplies of import low value goods, digital services and non-digital services made to non-GST-registered customers in Singapore exceeds SGD 100,000

Companies may also voluntarily register.

Businesses should assess if these changes trigger the need to register for GST and other compliance challenges.

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Author

Francisco Gomes

Francisco joined Sovos in 2022 as a Senior Consultant. He holds a Degree in Law with specialization in Fiscal Law and has 7+ years of cross-border VAT experience working in big multinational companies. Francisco specializes in VAT compliance obligations, tax due diligence and tax consulting advisory focusing on indirect taxes within the EU.
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