30 October 2018
On 1 October 2018, the Goods and Services Tax (Amendment) Bill (“Bill”) was tabled in Parliament for first reading. This Bill seeks to amend the Goods and Services Tax Act (“Act”) primarily to extend the goods and services tax (“GST”) to overseas services and to enhance administration and enforcement of the Act.
Extending GST to overseas services
Under the Bill, GST will be charged on overseas services as follows:
- On any supplies of services of a type and made in the circumstances described in the new Seventh Schedule and provided to a person belonging in Singapore, if the supply is a taxable supply made by a taxable person in the course or furtherance of any business carried on by the person.
- Through the reverse charge mechanism in section 14 under which services (to the extent the services are not excluded under the new Eighth Schedule) supplied from outside Singapore to a recipient in Singapore, give rise to a “reverse charge supply” of those services deemed to have been made by the recipient to himself. The reverse charge supply is chargeable to tax as if the recipient had supplied the services in Singapore in the course or in furtherance of his business, and the supply were a taxable supply.
Enhancing administration and enforcement of the Act
The Bill will also amend the Act to enhance the administration and enforcement of the Act. For example, the Inland Revenue Authority of Singapore (“IRAS”) will be given enhanced powers to investigate specified serious tax crimes, e.g. the power of forced entry, power of arrest without warrant and power of body search. IRAS’ power to gather all information relevant to its investigations from any person will also be expanded. Further, IRAS will be empowered to disclose to the head of any law enforcement agency information required for investigating an offence under the First or Second Schedule to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act.
Public consultation and Response on draft Bill
From 28 June 2018 to 18 July 2018, the Ministry of Finance (“MOF”) conducted a public consultation on a draft version of the Bill. On 27 September 2018, MOF issued its Response to the feedback received from the public consultation.
- Goods and Services Tax (Amendment) Bill
- Summary of Response to Public Consultation on the Draft Goods and Services Tax (Amendment) Bill 2018
- MOF’s Response to common feedback on the Goods and Services Tax Bill 2018