Singapore
  • Hong Kong
  • UK
  1. Osome Blog Singapore
  2. New GST Rules to Kick off in January 2020

New GST Rules to Kick off in January 2020

Beginning January 1, 2020, all Singapore companies will be charged 7% GST on the services they buy online from foreign-based providers.

Osome explains what to do about it and how to pay the tax. Spoiler: if you are GST-registered, your accounting company in Singapore will have some paperwork to do.

What services are in question?

It is not what service you buy that matters but from whom you buy it and how you use it. Put simply, you will need to pay GST on digital services bought from major foreign providers.

Services that will now be taxed:

  • do not require a human rendering the service to you;
  • cannot be used without a device or internet connection.

In short, your corporate Microsoft Office license will certainly be taxed. Marketing, accounting, and management tools may all be taxed if they match the criteria above.

Other foreign services that are subject to new GST rules include:

  • Mobile apps
  • Anti-virus software
  • Website hosting services
  • Cloud-storage services

Mind that changes only apply to large overseas service providers:

  1. Their annual global turnover is more than S$1 million.
  2. They sell at least S$100,000 worth of digital services to customers in Singapore in 12 months.

Major providers have been notifying their Singapore clients about the new order by email, so check your inbox.

How the New Rules Will Affect Your Company

Make sure all the relevant service providers are aware that your business entity is registered in Singapore. Do not submit false information — it is a serious offence.

Your further course of action depends on whether your company is GST-registered or not.

If your company is not GST-registered

The company that renders you the service will collect the tax from you and deal with IRAS, so no extra paperwork for you.

The GST will now be appearing on your invoices and will be included in the final price. So prepare to see the prices grow by 7%. For example, if your corporate Microsoft Office subscription cost S$100, it will now cost you S$107.

If your company is GST-registered

Beginning January 1, 2020, your company will need to pay GST to IRAS. It is called Reverse Charge.

Do not forget to notify your service provider that you are registered for GST and give them your GST registration number. They will not include GST in your bill as it will be on you to pay the tax.

If you are not sure about the service provider’s status, check its GST registration

If your provider adds the GST charge to the invoice, but you doubt they fall under the new rules, check their GST registration on IRAS website.

If they must charge GST, they will be on the list:

Overseas Digital Service GST Registration

Don’t hesitate to alert IRAS if you find out someone is trying to charge you wrongly.

Key takeaways

  1. Beginning 1 January 2020 you must pay GST on any digital service you purchase from overseas providers.
  2. If you do not have GST registration, your provider charges you more and pays GST sum to IRAS themself.
  3. If your company is GST-registered, you pay GST yourself.
Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

E-commerce

Which Is The Better Payment Gateway: Paypal or Stripe?

As an e-commerce business owner, you would have heard of payment gateways PayPal and Stripe. With these two big platforms being the most popular online payment gateways, you may face a dilemma when it comes to deciding which payment gateway to use.

E-commerce

Tips For Amazon Sellers To Manage Your Inventory Better

Brand owners and sellers of all scales struggle to seek a well-balanced supply chain. Additionally, Amazon has its own inventory management rules, which makes everything even tougher.

E-commerce

Top 10 Best E-commerce Hosting Services in 2021

When you are setting up your e-commerce shop, the right hosting provider can make all the difference. However, with a variety of options out there, choosing the best one can be confusing.

E-commerce

What You Need To Include In An Invoice for E-commerce

For business owners who own and run an online store, you probably already know that invoices must be sent to your customers for the services you provide or the goods you sell, as a form of purchase proof.

E-commerce

Guide to E-commerce Fulfillment & Shipping for Singapore E-commerce Sellers

E-commerce fulfilment and shipping for your Singapore-based business matters. This guide unpacks how the right strategy can influence your bottom line and help you find what’ll work best for you - whether it’s in-house fulfilment, dropshipping or a solid partnership with a 3PL.

E-commerce

E-commerce Tips: How To Use Packaging Inserts to Increase Revenue

Improving customer retention is one of the effective ways to create brand awareness. Additionally, placing your focus on existing customers also means that you do not have to splurge extra dollars on marketing.

Entrepreneur's Bootcamp

The Cost of Living as a Foreign Business Owner in Singapore

When choosing Singapore as a base to run your business is the cost of living, you need to consider the cost of living.

E-commerce

5 Most Lucrative E-Commerce Niches In 2021

If you’re just starting or looking to go in a new direction, finding a lucrative niche will make every part of running your e-commerce business easier. This article will look at the trending e-commerce niches to consider.

Entrepreneur's Bootcamp

How To Pick the Right Company Name

Choosing a business name is not that simple, and you may wreck your brains over choosing one, only to find out that ACRA did not approve its registration.

Running My Business

Should You Consider Using Cryptocurrency in Your Business Operations?

There are more than 4,000 cryptocurrencies that exist. Before you jump on the bandwagon, assess whether cryptocurrencies are suitable to be used in your business.

E-commerce

7 Ways To Accept Payments For Your Online Store

Many payment options allow you to accept credit cards and other payment types. How do you choose which method to include on your website?

E-commerce

Customer Retention: How To Keep Customers Coming Back Repeatedly

Every business likes new customers, especially when the customer uses their services again and again. Existing customers help in creating a solid foundation of your business that provides a steady revenue stream that costs less than acquiring new customers.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?