29 November 2018

On 19 November 2018, the Goods and Services Tax (Amendment) Bill (“Bill”) was passed in Parliament.  The Bill, which is not yet in force, seeks to amend the Goods and Services Tax Act (“Act”) to:

  • introduce GST on imported services from 1 January 2020; 
  • enhance the powers of the Inland Revenue Authority of Singapore (“IRAS”) to investigate tax crimes; and
  • allow the sharing of information by IRAS with law enforcement agencies to combat serious crimes.

GST on imported services

Goods and services tax (“GST”) on imported services will be introduced through a Reverse Charge mechanism for business-to-business (“B2B”) imported services, and an Overseas Vendor Registration (“OVR”) regime for business-to-consumer (“B2C”) imported services.

Under the Reverse Charge mechanism, when local business customers that are GST-registered purchase services from overseas suppliers, they will be responsible for accounting and paying the GST to IRAS, instead of the supplier, as is traditionally the case. Examples of B2B imported services include management, IT and payroll services supplied by overseas service providers to local business customers. 

With regard to B2C imported services, overseas suppliers and electronic marketplace operators will be required to register for GST under the OVR regime if they have a global annual turnover of S$1 million or more and make sales of digital services of at least S$100,000 to local consumers. These GST-registered overseas vendors will charge and collect GST on their sale of digital services to consumers in Singapore, and pay the collected GST to IRAS. Examples of such B2C imported digital services are video and music streaming services, mobile applications and software.

Enhance IRAS’ powers to investigate tax crimes

IRAS' investigative powers will be enhanced by providing authorised IRAS officers with (i) the power of forced entry; (ii) the power to arrest without warrant; and (iii) the power to carry out body search. IRAS will also be empowered to gather from any person all information relevant to its investigations or the prosecution of offences under the Act.

Sharing information with law enforcement agencies to combat serious crimes

The Act will be amended to allow IRAS to share with law enforcement agencies information that may be relevant to the investigation or prosecution of serious crimes. Such crimes are prescribed in the First and Second Schedules to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act.

Reference materials

The following reference materials are available from the Ministry of Finance website www.mof.gov.sg and the Singapore Parliament website www.parliament.gov.sg:

 

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