What You Need To Know About Singapore Goods Tax

Goods and Services Tax in Singapore has a major impact on those businesses which either import or sell goods into Singapore. The following guide expounds on some of the important GST regulations applicable to companies that make business with Singapore. This overview can be used by anyone who wants to know the current singapore goods tax obligations.

Things to know about Singapore goods tax for business imports

Understanding the current GST rate

Singapore has a general rate of 9 percent of Goods and Services Tax on most products and services. This rate has not declined since it went up, reaching 8 percent at the beginning of 2024. Knowing this prevailing rate will enable companies to estimate correct landed costs of goods exported to Singapore.

How GST applies to imported goods

Importation of physical goods into Singapore is typically liable to import GST which is computed on the overall value of shipment. It is usually calculated considering the cost of goods, insurance, freight and duties due. The knowledge of such a way of calculation can assist the business to calculate the total costs of imports precisely. These are some of the components that are usually considered in computing the GST on imported goods:

• Cost, insurance, and freight value: GST is based on the sum of CIF value of the shipment.
• Applicable customs duty inclusion: This is applicable to any custom duty to be paid and then the calculation of GST will be done on the sum.
• Standard nine percent rate application: The present rate of 9 percent rate is applicable in the majority of imported commercial goods.
• Customs clearance documentation: The documentation of the clearance of imports by customs is normally done by official customs clearance permits.

Low-value goods threshold explained

Singapore has a low threshold of value of goods that impacts on the application of GST on smaller parcel shipments. Depending on the registration of the seller, goods that are worth this amount or less can be relieved. Knowledge on this threshold assists businesses to plan the shipment values and pricing strategies. Take into account these facts with regard to low-value goods threshold in Singapore:

• SGD 400 relief threshold: Relief of GST on parcel shipments may be offered where these are valued at SGD 400 or below.
• Full value taxation above threshold: When a shipment crosses SGD 400 mark then the whole shipment is taxed by GST.
• Registered seller obligations: Foreign sellers with registration requirements can require the payment of GST irrespective of the value of shipment.
• Non-dutiable goods focus: This level in relief usually targets categories of non-dutiable goods.

Overseas vendor registration requirements

Overseas businesses that sell to Singapore might be required to be registered under Overseas Vendor registration regime. The registration requirement is conditioned on the particular global and local sales turnover levels. These requirements will enable foreign sellers to know what to do to comply with the requirements. The following are registration thresholds which should be considered in overseas vendor registration requirements:

• Global turnover threshold: Businesses with global annual turnover of over SGD 1 million can elicit registration requirements.
• Singapore sales threshold: Companies which import more than SGD 100,000 of low-value items into Singapore per year might be obliged to register.
• Combined threshold application: Both of the thresholds will generally have to be obtained and then registration will be required.
• Ongoing compliance obligations: Registered businesses should, in the same manner, charge, collect, and pay GST.

A look at the frequently asked questions

What is the GST rate in Singapore?

The standard GST rate of Singapore is at present 9 percent on most products.

What is Singapore’s low-value goods threshold?

There is a certain threshold of SGD 400 of non-dutiable parcel shipments.

Who should be registered under Overseas Vendor Registration?

Companies whose sales turnover of a business exceeds certain global and Singapore requirements.

Is 100% of the shipment value above the threshold subject to GST?

Yes, above the threshold the shipment as a whole is subject to taxation.