Budget 2021: GST will be charged on all goods purchased from overseas starting Jan. 1, 2023

Yup, this means your overseas online shopping.

Matthias Ang | February 16, 2021, 04:52 PM

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Goods and Services Tax (GST) will be levied on imported low-value goods and business-to-consumer (B2C) imported non-digital services from Jan. 1, 2023.

This announcement was made on Tuesday (Feb. 16) by Deputy Prime Minister and Minister for Finance Heng Swee Keat, as part of his Budget statement.

All goods imported via air or post will now be subject to GST

Currently, GST applies only to imported items valued at S$400 and above. This change means that now all goods imported by air or post into Singapore will be taxed.

The existing arrangement has been in place to facilitate customs clearance.

Move is to ensure level playing field for local businesses

According to the Ministry of Finance, the move to implement GST on both categories of goods and services is to ensure that the same GST treatment applies regardless whether an item or service has been bought from overseas or locally.

The move, along with the overall increase in GST to 9 per cent, will "ensure" a level playing field for local businesses to compete effectively, Heng added.

Currently, B2C imported non-digital services, such as training services by a foreign company, are also not subjected to GST.

However, from Jan. 1, 2023, overseas suppliers who are required to register under the Overseas Vendor Registration regime will now charge GST on such sales to local consumers.

Such overseas suppliers will then pay the GST they collect to IRAS.

Meanwhile, consumers will be charged GST by overseas suppliers, just as they are charged GST when they purchase the same items from GST-registered local suppliers.

As for a GST-registered person making a business-to-business purchase, they will have to self-account for GST on their import of such goods, and pay the GST to the IRAS.

Here's what the previous change to the GST entailed:

Top image screenshots from respective websites