Page 18 - Budget-2018-Highlights-en-flip

GOODS AND SERVICES TAX

 It would impact the way accounting entries  In the Budget proposals announced for the
are put through and posted in the books of OVR regime, overseas vendors belonging
accounts (e.g. recording the transactions in outside of Singapore with a global turnover
the traditional way or through journal exceeding $1 million and making B2C
entries). In addition, unless the accounting supplies of digital services to customers in
systems support team could link the supply Singapore exceeding $100,000 are
and the purchase aspects of the reverse required to register, charge and account
charge reporting in the GST returns, it for GST.
might require human intervention and thus
could potentially lead to input error.  As the overseas suppliers and electronic
marketplace operators are based outside
 Whilst the majority of businesses make of Singapore, enforcing the GST
fully taxable supplies and thus would not be registration requirement rules on them
affected by the reverse charge mechanism, may prove a challenge to IRAS.
there is nevertheless a need for such
businesses to periodically monitor their  Low value imported goods
“exempt supplies” position to establish
whether there is a subsequent need of The Budget proposals announced did not
reverse charge reporting in their GST address the issue of Singapore consumers
return filings for their transactions with purchasing goods online from overseas
overseas vendors. suppliers and importing them into Singapore.
Currently for consumer goods that are
 Non-GST registered businesses that imported via air or post and the value is below
procure services from overseas suppliers $400, no GST is collected upon their
exceeding $1 million in a 12-month period importation into Singapore.
and would not be entitled to full input tax
credit even if GST-registered may become The Minister indicated that there are ongoing
liable for GST registration by virtue of the international discussions in this area. The
reverse charge rules. Government is reviewing international
developments before deciding on the measure
This may well translate into additional to take for Singapore.
compliance costs for such businesses.

 B2C

 Under the OVR regime, a two-tier
registration threshold, based on the value
of annual global turnover as well as the
value of digital services rendered to
customers in Singapore will be looked at in
the determination of whether the overseas
suppliers and overseas electronic
marketplace operators are required to
register for GST in Singapore.

 The proposed two-tier registration
threshold is to avoid imposing an
unnecessary compliance burden on
overseas suppliers whose global turnover
may be sizable but they may not be making
significant sales to customers in Singapore.

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