Singapore Budget Introduces Important GST Changes

On February 19, Singapore released its 2018 Budget which includes two significant changes to its Goods and Services tax (GST), including rules that will require foreign suppliers of services to register to collect and remit tax.

  • Imported services will be subject to the GST starting on January 1, 2020

Business buyers of services (both digital services and standard services) will be required to self-assess GST under a reverse charge mechanism. However, foreign sellers of digital services to non-business consumers must register with Singapore Inland Revenue (IRAS) to collect and remit GST. IRAS promises to provide further guidance on the new rule by end of February.

  • The Budget proposes to increase the GST by 2%

As things stand today, GST is applied at 7% and this proposal would increase the GST to 9%. However, this change is not projected to take place until 2021 at the earliest and 2025 at the latest. 

You can access a complete transcript of the Budget Speech and Annexes at http://www.singaporebudget.gov.sg/budget_2018/budgetspeech. Annex A-5 addresses tax changes.

Author

Yujin Weng

Yujin Weng is Manager of Regulatory Analysis & Design at Sovos. She leads a team of attorneys that focus on global VAT determination, leveraging her ten-plus years’ experience with indirect taxes at Sovos. Yujin is a member of the Massachusetts and New York Bars, has a J.D. cum laude from Boston University School of Law, an M.A. from Syracuse University, and a B.A. from Nanjing University (China). She is fluent in Chinese.
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