The Singapore Budget 2018 was delivered by the Finance Minister, Mr Heng Swee Keat, on 19 February 2018.
This article highlights some of the key changes on goods and services tax (GST).
Increase in GST rate
The prevailing GST rate of 7% will be raised to 9% sometime between Year 2021 and Year 2025. It is announced that the raise will likely be earlier than later, depending on economic conditions.
GST on imported services
GST on imported services will be introduced with effect from 1 January 2020. There are two types of imported services impacted: business-to-business (B2B), such as marketing services, accounting services and IT services; and business-to-consumers (B2C), such as video and music streaming services, apps and online subscription fees.
For B2B, local businesses which make exempt supplies or do not make any taxable supplies (i.e. non-GST registered business), will need to account for output GST on services they import via a reverse charge mechanism.
For B2C, the imported services will be taxed through an Overseas Vendor Registration model. Overseas suppliers and electronic marketplace operators with annual global turnover of more than S$1 million and supplies more than S$100,000 of digital services to consumers in Singapore will be required to register for GST with the Inland Revenue Authority of Singapore (IRAS).