Changes are coming to the way Singapore manages import taxes. Effective January 1, 2023, merchants who cross a selling threshold will no longer benefit from Singapore’s GST tax de minimis of $400 SGD (~$286 USD). Merchants selling more than S$100,000 in “Low Value” goods to consumers in Singapore will need to register for a GST number, collect the 8% tax from consumers at checkout for all orders under S$400, and file periodic tax returns with the Inland Revenue Authority of Singapore (IRAS). There are many fine details to this new rule. If you are close to crossing the threshold or want to learn more, reach out to us at vat@passportshipping.com. In the meantime, here are the top 10 things you need to know about these tax changes:
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Today, Singapore has a $400 Singapore Dollar (SGD) tax de minimis, which is roughly $286 USD at today’s exchange rate
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The 7% Goods and Services Tax (GST) is collected at the border for shipments over this amount. Your carrier or customs broker handles this for you today.
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Shipments below the de minimis clear free of the 7% GST.
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De minimis is calculated on CIF value (sale price + shipping + insurance), not on FOB value (sale price of the goods)
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Starting January 1st 2023, there are two major changes:
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The GST rate increases to 8%, and;
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Merchants who cross a selling threshold are required to register for a Singapore GST ID, collect GST on orders under $400 SGD, and file tax returns with the Inland Revenue Authority of Singapore (IRAS) for these shipments
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Note that GST will still be collected on import for all shipments over $400 SGD, so there is no need to report taxes on these shipments. Your carrier or customs broker will continue to manage this for you.
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The Singapore sales threshold has two components, a global turnover and a local turnover. Merchants are required to register for a GST ID and collect GST at checkout if:
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Their global sales exceed $1M SDG (~$715k USD) AND
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Their sales of “low-value B2C goods” (goods under $400 SGD) exceed $100,000 SGD (~$71,500 USD)
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Merchants who do not cross the selling threshold do not need to register, nor do they need to collect GST at checkout as the $400 SGD tax de minimis will still apply to their shipments.
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For companies who cross the selling threshold, IRAS has established a simplified registration for overseas companies (companies with no presence in Singapore)
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However, it is mandatory to have a local company act as your “Fiscal Representative” if you have no presence in Singapore.
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The total cost of registration should be around $5,500 USD in the first year as many tax firms are charging:
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+$1,000 USD for a GST Registration
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$4,500 for ongoing tax reporting and fiscal representation
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GST registration is currently taking 30-45 days on average, but it may take up to 12 weeks to receive your GST number
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These changes primarily impact B2C shipments to consumers for their personal use, and only for merchants who cross the sales threshold. Commercial or B2B shipments under $400 SGD will need to report the Singapore importer’s GST number when the shipment clears customs.
Helpful links:
Singapore Revenue
Singapore Customs
