S’pore govt charging GST for apps, streaming services from 2020, explained
One area Singaporeans are bound to express strong objections to: The planned introduction of goods and services tax (GST) on imported services.
Definitely, lots of questions come to mind:
What are imported services??
What GST? Isn’t it going to be hiked?
Who? What? How? Where? and most importantly
But before you get your panties in a twist, here’s a short explainer on what exactly this involves.
You don’t pay GST. In other words, all your Taobao/ AliExpress, Qoo10, Shopee and Carousell products bought from, say, China-based companies, aren’t taxed. Nor are your digital software subscriptions like Office 365 and Adobe Creative Suite, for instance.
Streaming services like Netflix and Spotify, which don’t have business entities registered here, are not.
So chances are, the majority of the time you spend shopping online you’re not being charged GST, especially for things you pay for online and from overseas businesses. This also includes air tickets, which at the moment are “zero rated” items — stuff the companies are allowed to skip charging GST for.
Then yes, you do — businesses registered here are required to register themselves with the Inland Revenue Authority of Singapore (IRAS, aka our taxman) if they turn over a taxable annual revenue of more than S$1 million.
Pretty much anything you can pay for online and which is done for you outside Singapore — marketing, accounting, IT and management services, video and music streaming services, in-app purchases, or even app purchases, even listing fees on online marketplaces, subscription fees you pay for software, newspapers, the list goes on.
For now, items that you buy that cost less than S$400, and which are shipped via air or post.
Because the cost of processing the GST is more than what will actually be collected in tax. No really.
And we say “for now”, because the Ministry of Finance said there are ongoing international discussions about how GST can apply to these types of lower-value imports, which they are monitoring to see what to do.
If your annual global turnover exceeds S$1 million, and the money you make from Singapore-based consumers exceeds S$100,000 in value, then you’ll need to register yourself with IRAS, so that you can collect GST on their behalf for the digital services you provide to Singapore customers.
This process is called Overseas Vendor Registration, and you’ll have to do it if your business meets the above criteria — if not, you’re off the hook.
If you’re a consumer and you’re reading this, sorry — you won’t. It’s only fair to pay for things online as much as you do offline.
If you’re a business likely to be impacted by this, you might be pleased to hear that the industry will be consulted — IRAS will release draft e-Tax guides by the end of this month.
GST amounts, basically — you’ll be paying an extra 7 percent on all the stuff you buy online that meets the above criteria, until between 2021 and 2025 onwards, when you’ll then be paying an extra 9 percent.
Pic adapted from various companies’ logos, emoji……
Singapore Policy Tax
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