Tax Write-Up: GST changes on digital services

With the year of 2019 coming to an end, we will be taking a look at the GST changes on digital services that we can expect to be implemented in 2020. For those who have been following the news of Budget 2018 and 2019 closely, you may be well aware of incoming policy changes regarding digital services under the Singapore’s Overseas Vendor Registration (OVR) regime.

Just to recap the key points, the affected digital services include (and are not limited to) subscriptions to music streaming such as Spotify and video streaming like Netflix. Software programs and data management services can also be expected to be affected. For more information to whether your service is taxable, do refer and search for your service company in the IRAS website linked at the bottom of this article.

As the information suggests, this means that consumers of said services can expect to pay 7% more than what they have before 1 Jan 2020. One of the main reasons for this implementation is that currently local services are already being subjected to GST, causing overseas suppliers of digital services to be able to have an advantage of avoiding GST. With OVR in place, both local and overseas services will be experiencing the same treatment with no GST drawback to the other. Such policies have already been in place for other countries such as Japan, Australia, New Zealand and South Korea as early as 2015.

 

Check for your affected service: https://mytax.iras.gov.sg/ESVWeb/default.aspx?target=GSTListingSearch

 

Articles:
https://www.straitstimes.com/singapore/over-100-overseas-digital-service-providers-register-for-gst-ahead-of-jan-1-deadline-iras

https://blog.moneysmart.sg/shopping/singapore-gst-2019-2020-changes/

 

 

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