1. How much GST will I have to pay from 1 January next year?
Singapore will next increase GST in two phases, from 7% to 8% on January 1, 2023 and then to 9% on January 1, 2024.
As a result, from January 1 next year, consumers will have to pay 8% GST when they purchase goods or order services from GST-registered companies.
If a consumer orders a service that will last for a period of time, the service will be calculated at 7% GST before January 1 next year, and 8% for services on or after the 1st.
For example, if a consumer subscribes to music streaming services from December 10, 2022 to December 9, 2023, the total subscription period is 365 days, and January 1 to December 9 accounts for 343 days, so there are 343 days of average daily service charges subject to the 8% excise tax.
Even if the consumer has paid in full before January 1 and received a 7% GST invoice from the provider, services provided on or after January 1 must still count for the 8% GST. As a result, the consumer will receive a credit note cancelling the old invoice and a new invoice from the supplier at 8% GST.
In other words, the GST will be calculated based on the date the service was provided, regardless of the date the consumer pays.
2. How should I calculate GST for goods paid in installments?
Installment payment goods are the same as ongoing services. If the goods are delivered on or after January 1st next year, even if the consumer places the order before the 1st and makes the first payment at 7% GST, the installment payment on or after the 1st will still be subject to 8% GST.
However, if the purchase is delivered before January 1 next year, then all subsequent installments will also only be subject to 7% GST.
3. Do I need to pay GST even if I buy low-priced goods online overseas?
Starting in 2023, consumers will also be required to pay GST on low-priced goods worth $400 or less that are imported by air or mail.
This also includes non-digital services such as educational courses and telemedicine services provided by overseas operators via live video.
Currently, goods imported by sea or land, regardless of value, are subject to GST paid separately by the consumer to the Singapore Customs Board upon arrival in Singapore, rather than being collected by the merchant at the time of purchase. Goods imported by air or mail are only subject to GST if they are worth $400 or more, and are exempt from GST if they do not exceed $400.
This new tax is designed to ensure that both overseas and local suppliers face the same GST treatment, allowing local businesses to have a level playing field.
GST will be collected by sellers, e-commerce marketplace operators or forwarders who are already registered for GST. Consumers who purchase low-priced goods from overseas online will not need to pay GST repeatedly to other operators once they have paid GST to one of them. At the same time, consumers do not need to pay additional GST to the Singapore Customs Board if the amount paid already includes tax.
It is important to note that if the price of a product, excluding shipping and insurance, is less than $400, it is a low-priced product and is subject to GST.
The $400 cap also depends on the individual price of the item, not the total price. Assuming that a consumer purchases 10 items from overseas at a unit price of $100 and sends them to Singapore by air or mail, even if the total price of the item reaches $1,000, the consumer still has to pay GST at the time of purchase because the unit price is still below $400, rather than waiting for the item to arrive in Singapore before paying GST to the Singapore Customs Board.