March 31, 2022 / 0 min read - Last updated: February 28, 2023
Singapore, like many other countries across the globe such as the United Kingdom, Australia, and countries in the European Union, is changing the way they handle the collection of goods and services tax (GST) on low-value imports. Effective January 1, 2023, the import GST de minimis will essentially go away (going from $400 SGD to $0 SGD), which means GST will be owed on all goods, regardless of value. The duty de minimis, however, will not be changing.
This change is only applicable to retailers who meet the following thresholds:
Retailers who sell, or expect to sell, more than $100k SGD (cost only, not CIF) into Singapore within a 12-month period, and
Sell, or expect to sell, more than $1M SGD (CIF) globally.
Another significant change, also effective January 1, 2023, is that Singapore’s GST rate is increasing from 7% to 8%. Then in January 2024, it will increase from 8% to 9%. This increase applies to everyone, not just retailers who meet the above thresholds.
For low-value imports (where the total of the goods is valued at or less than $400 SGD), the affected retailers will have to either register for Singaporean GST or cease orders into Singapore. However, if you meet the threshold for registration, that means you have a pretty healthy sales volume in Singapore and should not want to lose that.
This blog will discuss the following:
If your business sends low-value imports into Singapore in business-to-consumer (B2C) shipments, this change will impact you. Currently, low-value imports are free of GST and duty. However, effective January 1, 2023, these orders will incur GST. Here are two scenarios to put the change into perspective for retailers who meet the thresholds and their customers:
Before January 1, 2023:
On or after January 1, 2023:
If you wish to continue selling low-value goods into Singapore beyond January 1, 2023, you must do the following:
If your business sells or is expected to sell products (low or high value) into Singapore exceeding S$100,00 annually and its global turnover exceeds or is expected to exceed S$1 million at the end of each calendar year, you must do the following:
If you meet the requirements of registration but decide not to register, you can do either of the following:
If your business does not sell nor is it expected to sell products into Singapore exceeding S$100,000 annually and its global turnover does not exceed nor is it expected to exceed S$1 million at the end of each calendar year, you must do the following:
Handle GST the way you normally handle it for your taxable shipments into Singapore, but ensure you are charging 8% GST instead of 7%.
The intention of this taxation on low-value goods into Singapore is an attempt to level the playing field between overseas retailers and local vendors. This change will make it so that both domestic and international shipments are taxed the same and that foreign retailers will not have an unfair tax exemption advantage over Singaporean vendors. In fact, this change may make Singaporeans even more inclined to shop locally since effective January 1, 2023, not only will low-value imports incur GST, but they will also incur international shipping costs.
Failure to register and pay GST is tax evasion if you meet the requirements for OVR GST registration. Singapore is committed to keeping the playing field even between sellers at home and abroad and has enacted legislation that allows IRAS to hold sellers liable for unpaid GST.
A love of bringing words together to create clear, simple messages about complex topics has driven me to pursue a career in professional writing. As the Content Manager at Zonos, I find excitement and purpose in decoding the complex details of cross-border ecommerce.