Singapore GST Rate Change from 7% to 8% in FY2023

1
6 April 2022, 11.00 am – 11.45 am
Samuel Fung, Associate Director
Accounting & Tax services, Greater China

2
Chester Leong
Managing Director Asia
Accounting & Tax Services
Based in Singapore, Chester is primarily responsible for the overall strategy and
management of BoardRoom's regional accounting and tax services in Singapore,
Malaysia and Greater China. He has extensive knowledge in the reporting
requirements of various industries for public listed and private limited companies. He
is a chartered accountant, company secretary, liquidator and accredited tax advisor
with more than 20 years of experience.
Eddie Soh
GST Consultant
With more than 20 years of practical GST experience gained from working at Inland
Revenue of Singapore (IRAS) as a tax auditor and at PricewaterhouseCoopers (PwC) as
a tax advisor, Eddie is the subject matter expert on goods and services tax (GST)
matters. He is an accredited tax advisor (GST) with Singapore Chartered Tax
Professionals (SCTP) and he speaks regularly at public GST workshop and seminars.
Speakers

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• Method of apportionment
- How much to charge at 7% and how much to charge at 8%
Agenda • Transitional rules for supplies
- When should you charge 7% and when should you
charge 8%
• Adjustment of tax previously charged
- Should you reduce at 7% or 8%
• Quick update on GST changes with effect from 1 January
2023
- Low value imported goods
- GST on the importation of remote services
- GST on travel arranging services
• Other practical considerations for GST rate change

Singapore’s GST rate
3%
4%
5%
7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
1994 2003 2004 2007
GST
rate
Year
3

Singapore’s GST rate
3%
4%
5%
7%
8%
9%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1994 2003 2004 2007 2023 2024
GST
rate
Year
4

What are the things to consider?
Accounting and
invoicing systems
• Have you spoken and booked
resources from your IT
team/vendor?
• How many internal systems are
involved?
• Tax invoice format
• GST transitional issues
Repeat for 2024 rate
change
• Are there any areas that could
have been done better?
Communication
• Is there a particular group of
customers which may be
adversely impacted?
• Is there any opportunity to
push more sales for businesses
in a B2C environment
Price display
• Price display must be GST inclusive
price.
• How many SKUs are involved?
• Which are the affected areas (e.g.
retail shop, online website, shopping
platforms)
Contracts
Training to internal
stakeholders
• Is there any major contract that are
fixed in price?
• Is there any flexibility in
renegotiating?
• Who needs to be involved (e.g.
procurement, AR team, finance and
tax team)
• Have you booked their time?
• What are the topics to be included
(e.g. Transitional issues, issuing credit
notes, price display?)
8

Time of supply – GST is chargeable at the prevailing rate on the supply at the earlier of
an invoice issued or a payment received
• If invoice issued or payment received before 1 Jan 2023 : GST at 7%
• If invoice issued or payment received after 1 Jan 2023 : GST at 8%
(unless election made under transitional rules where allowable)
General rules
9

Question
Scenario 1
SgCo is holding its annual dinner and dance at a five star
hotel in February 2023. The hotel issues a tax invoice in
November 2022 to collect a non-refundable 30% advance
payment from Sg Co.
Question: What should be the GST treatment when the five
star hotel issues the tax invoice on Nov 2022?
a) 7%
b) 8%
c) 9%
Answer: 7%. You are not allowed to charge or reflect GST
at 8% on invoices and payments that are issued or
received before 1 January 2023

Application of Transitional rules –
Invoice issued BEFORE 1 Jan 2023
13

Invoice issued before 1 Jan 2023
Example 1
15

• Since the invoice is issued on 1 Dec 2022
(i.e. before rate change) and full payment is
received on 10 Dec 2022 (i.e. also before
rate change), the supply is subject to GST
at 7%
• No adjustment required
Example 1
15

Example 2
17

• Charge and account GST at 7% on
tax invoice issued on 20 Dec 2022
• As goods are fully delivered before
rate change, no adjustment is
required
Example 2
17

Example 3
19

• Must charge and account GST at 7% on
tax invoice issued to your customer on 20
Dec 2022.
• Since no payment received or services
performed before 1 Jan 2023, required to
issue credit note to the customer by 15
Jan 2023 to cancel original tax invoice
• Issue new tax invoice to charge GST at 8%
Example 3
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(a) A header “Credit Note”;
(b) An identifying number;
(c) Date of issue;
(d) Your name, address and GST registration number;
(e) Your customer’s name and address;
(f) The identifying number and date of issue of the original tax invoice;
(g) A description which identifies the goods and services to which the credit relates;
(h) Reason for credit;
(i) The quantity and value of goods or services to which the credit relates; and
(j) The rate and amount of GST being credited.
Credit notes
Must contain the following information :
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• Issue credit note to cancel the full
original invoice at 7%
• Re-issue tax invoice at 8%
• The above must be done by 15
January 2023 (Sunday!)
• Need to write in to IRAS to seek
extension of time, if required
Credit notes
Continue from example 3
22
Example 3

Example 4
23
Example 4

• Must charge and account GST at 7%
on tax invoice issued to customer on
22 Dec 2022
• As no payment received and only
part of services performed before 1
Jan 2023, required to issue a credit
note by 15 Jan 2023 for the part of
services performed after 1 Jan 2023
and issue a new tax invoice and
charge GST at 8% by 15 Jan 2023.
Example 4
Note: The value of the part services performed after 1
Jan 2023 ($800) is subject to GST at 8% as it is lower
than the value of payment received after 1 Jan 2023
23
Example 4

Example 5
25

• Charge and account for GST
at 7% on tax invoice issued
on 21 Dec 2022
• No adjustment required
(goods fully delivered before
1 Jan 2023)
Example 5
25

Example 6
27

• Charge and account GST at 7% on
tax invoice issued on 21 Dec 2022
• Required to issue the following
before 15 Jan 2023 (as part payment
received after 1 Jan 2023 is lower
than value of services performed
after 1 Jan 2023):
- Credit note for $749 ($700 plus
7% GST of $49); and
- New tax invoice for $756 ($700
plus 8% GST of $56).
Example 6
27

Example 7
29

• Charge and account GST at 7% on tax
invoice issued on 21 Dec 2022
• Required to issue the following before
15 Jan 2023 (as value of part goods
delivered after 1 Jan 2023 is lower
than value of part payment received
after 1 Jan 2023):
- Credit note for $642 ($600 plus
7% GST of $42); and
- New tax invoice for $648 ($600
plus 8% GST of $48).
Example 7
29

Do’s
• Ensure full payment is received;
• Ensure goods/services are fully delivered/performed;
• Issue tax invoice only in respect of the goods delivered to be delivered before 1 January 2023.
Invoices issued before 1 Jan 2023
- What can you do to avoid all these?
31

How to identify transactions that require adjustments?
• As at 1 January 2023
 Identify unpaid invoices as at 1 January 2023
 Check whether goods/services issued/performed for the unpaid invoices
 Make adjustments accordingly
• Wait for IRAS to audit you.
Invoices issued before 1 Jan 2023
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Questions?
©2022 Jed Tax Consulting Pte Ltd. All rights reserved

Invoice issued ON/AFTER 1 Jan 2023
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Invoice issued on/after 1 Jan 2023
Example 8
36

• Time of supply: 12 Dec 2022, full
payment received
• Charge GST at 7%, regardless of
invoice issued or goods delivered
after rate change
Example 8
36

Example 9 – Basic Tax Point occur before rate
change
38

• Time of supply: 3 Jan 2023,
invoice issuance
• Basic tax point: 15 Dec 2022,
goods delivered
• General rules – GST is chargeable
at 8%
• Can elect to charge GST at 7% on
entire value of supply as the goods
are fully delivered before 1 Jan
2023.
Example 9 – Basic Tax Point occur before rate
change
38

Example 10
40

• Time of supply: 4 Jan 2023, invoice
issuance
• Basic tax point: 6 Jan 2023, services
performed
• General rules – GST is chargeable at
8%
• No election applies as services are
fully performed after rate change
Example 10
40

Example 11
42

• Time of supply: 5 Jan 2023, invoice
issuance
• Basic tax point: 27 Dec 2022 and 15
Jan 2022, goods delivered
• General rules – GST is chargeable at
8%
• Can elect to charge GST at 7% on the
value of part of the goods delivered
before 1 Jan 2023.
• Remaining value of part of the goods
delivered after 1 Jan 2023 will be
subject to GST at 8%.
• See method of adjustment
Example 11
42

Credit notes
• Issue credit note to cancel the full
original invoice at 8%
• Re-issue tax invoice at 7% for S$200
and 8% at $800; or
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Method 1
Example 11

Credit notes
• Issue credit note for S$200 at 8%
• Reissue tax invoice for S$200 at 7%
The above must be done by 15 January
2023 or 90 days from the date of the
original tax invoice
45
Method 2
Example 11

Example 12
46

• Time of supply: Payment receipt
• General rules – GST chargeable at
7% on $200 received on 20 Dec
2022 and 8% on $800 received on 5
Jan 2023
• Can elect to charge GST at 7% on
entire value of supply as the goods
fully delivered before 1 Jan 2023
Example 12
46

Example 13
48

• General rules – GST chargeable at 7% on
$200 received on 20 Dec 2022 and 8%
on $800 received on 15 Jan 2023
• No election applicable as the goods are
fully delivered after 1 Jan 2023
Example 13
48

Example 14
50

• General rules – GST chargeable at 7% on
$200 received on 27 Dec 2022 and 8% on
$800 received on 15 Jan 2023
• Can elect to charge GST at 7% on the
value of the part of goods delivered on 28
Dec 2022 (i.e. before 1 Jan 2023) which is
the higher of the value of payment
received or goods delivered before 1 Jan
2023
• Remaining value of part of the goods
delivered on 22 Jan 2023 (i.e. after 1 Jan
2023) will be subject to GST at 8%
Example 14
50

Example 15
52

• General rules – GST of 7% is chargeable
on $600 received on 27 Dec 2022 and
GST of 8% is chargeable on the balance
payment of $400 received on 15 Jan
2023
• No election necessary – value of part
payment received before 1 Jan 2023 is
higher than the value of part of the goods
delivered before 1 Jan 2023
Example 15
52

• Cannot apply to business assets sold in satisfaction of a debt
• Can only be performed by the GST-registered supplier
• For self-billing, customer must obtain agreement with supplier in writing before issuing tax invoice
charging GST at 7%
• No need to seek approval or complete any form to make election
• Must maintain documentary evidence to show goods delivered or services performed before 1 Jan 2023
Making an Election
54

• How many percent of your customers are GST registered?
• If they are GST registered, will they complain if I charge them 8%
instead of 7%?
• Are you a B2B business or B2C business?
• What will happen if I adopt the general time of supply rules and only
react when customers complain?
Should you elect?
55

• If tax invoice issued to customer on/after 1 Jan 2023 with GST at 8% and subsequently elect to
charge GST at 7% on goods delivered and services performed before 1 Jan 2023
• Must issue credit note by 15 Jan 2023 for the GST amount overcharged or 90 days from the date
of the original tax invoice
Issuance of credit note for election of GST rate
56

How to identify transactions that require adjustments?
• As at 1 January 2023
 Identify advance payment received (check GL account)
 Identify goods issued but not invoiced (Exception report)
 Ensure GST rate is applied correctly when issuing invoices for these two reports
• Wait for feedback/complaints from customers.
Invoices issued on/after 1 Jan 2023
57

Adjustment of Tax
Previously Charged

• To correct a mistake – GST rate on credit note to follow the GST rate on the original tax invoice
• Give credit for volume-related rebate in the form of cash – GST rate on credit note to follow
the GST rate on past purchases.
• Returned goods – GST rate on credit note to follow the GST rate on the original sales, if unable
to trace, possible to issue credit note without GST (subject to condition)
Issuing credit note
59

• All payments received within the month of Jan 2023 treated as payments received before 1 Jan 2023 if
following conditions met:
(a) GIRO deduction or credit card payment is successfully effected by end of Jan 2023;
(b) GIRO deduction or credit card payment relates to bills or invoices that are issued before 1 Jan
2023; and
(c) Bills or invoices in (b) are issued according to the normal billing cycle of the business.
Other Matters – Receipt of Payment
Payment mode: Recurring payments via GIRO deductions and credit card
60

• Following payments can be treated as received before 1 Jan 2023 even though actual money may be
received by supplier on/after 1 Jan 2023:
(a) Non-recurring payment charged to credit card by 31 Dec 2022;
(b) Telegraphic transfer (TT) instruction received by recipient bank by 31 Dec 2022; and
(c) AXS, SAM or NETS transaction which takes place by 31 Dec 2022.
• If receive cash or electronic fund transfer (e.g. FAST, PayNow) where the funds are transferred instantly,
payments will be treated as received on the date the funds are received.
61
Payment mode: Electronic payment modes

• Cheques issued before 1 Jan 2023 (i.e. dated before 1 Jan 2023);
• Presented to the bank (i.e. bank-in date) by 4 Jan 2023; and
• Cleared successfully can be treated as payment received before 1 Jan 2023.
Payment mode: Cheque

GST rules for low-
value imported goods

• Scope of LVG
• Goods which at the point of sale :
• Are not dutiable goods or are dutiable goods but payment of duty chargeable is waived under
section 11 of the Customs Act;
• Are not exempt from GST (e.g. investment precious metal);
• Are located outside Singapore and are to be delivered to Singapore via air or post; and
• Have a entry value not exceeding the import relief threshold of S$400 (a.k.a. entry value
threshold).
• Sales value of the goods will be used to determine whether the supply of goods exceeds the entry
value threshold (i.e. entry value is determined by the sales value).
GST rules for Low-Value imported Goods
61

• Local suppliers
• Goods stored outside Singapore for sale to consumers in Singapore and outside Singapore
• Prior to 1 Jan 2023 : sale of LVG stored outside Singapore and sold to consumers in
Singapore outside the scope of GST as the goods are outside Singapore at the time of supply
• With effect from 1 Jan 2023 : Direct sales of LVG by GST-registered local suppliers to
customers who are not GST-registered in Singapore fall within scope of GST (i.e. standard-
rate the supply of goods)
• Non GST-registered local supplier required to include such supplies in his taxable turnover in
determining GST registration liability
62

• GST effected via the Overseas Vendor Registration (OVR) for supply of LVG made to non-GST registered
customers in Singapore (i.e. B2C supply) applies to:
• Overseas supplier
• Electronic marketplace
• Redeliverer
GST registration threshold
• S$100,000 to Singapore non-GST registered customers; and
• S$1million global turnover
63

GST rules for
Remote services

Current scope…
• Digital services provided by overseas supplier (e.g. mobile applications, Netflix, anti-virus software,
cloud services) to non-GST registered customers in Singapore is subject to GST.
With effect from 1 January 2023
• Remote services (i.e. digital and non-digital services) will be subject to GST if it is provided by GST
registered overseas service providers.
• Non-digital services consumed or capable of being consumed regardless of where the physical
performance of the services is carried out will be subject to GST (e.g. legal tax and accounting
services, online counselling, distance learning classes, membership subscription to professional
associations ec).
GST rules for Remote services
64

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GST registration liability
• Global turnover exceeding S$1million; and
• Make B2C supplies of remote services plus low-value goods to Singapore exceeding S$100,000
B2C – “C” is defined by non-GST registered persons.
Retrospective basis
The global turnover and value of B2C supplies of LVG and remote services to Singapore for the
calendar year (i.e. 1 January to 31 December) exceed S$1million and S$100,000 respectively.
Prospective basis
You reasonably expect the value of your global turnover and B2C supplies of LVG and remote services
to Singapore exceed S$1million and S$100,000 respectively for the next 12 months.

• (i) Services that fall within the description of exempt supplies under the Fourth Schedule to the GST
Act;
• (ii) Services that qualify for zero-rating under section 21(3) of the GST Act had the services been
supplied by a taxable person belonging in Singapore; and
• (iii) Services provided by the government of a jurisdiction outside Singapore, if the services are of a
nature that fall within the description of non-taxable government supplies under the Schedule to the
GST (Non-Taxable Government Supplies) Order of the GST Act.
65
Remote services excluded from the scope of GST

• Hairdressing services
• Physiotherapy services
• Restaurant
• Passenger transportation services
• Physical entry to entertainment or sporting events
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On-the-spot services (Excluded)

GST rules for travel
arranging services

• Services which facilitate booking and payment of underlying travel products.
• Services can be provided via internet or through non-digital means (i.e. walk-in or over the phone)
• Arranging of international transport of passenger and related insurance
• Arranging of travel accommodation
• Arranging of package tours (inbound/outbound)
GST rules for travel arranging services
What are travel arranging services
67
3 categories

Before 1 January 2023
GST treatment
Arranging of international travel Zero-rated
Arranging of overseas accommodation Zero-rated
Arranging of package tours Zero-rated if contract with and directly benefits
overseas customer
68

On/After 1 January 2023
Basis for determining GST treatment will be based on where the customer and direct beneficiary of the
services belong.
For all 3 categories of travel arranging services,
 Overseas customer – Zero-rated
 Singapore customer – Standard-rated
Note: No change in the GST treatment of the supply of the underlying travel product.

Questions?
Email us:
info.sg@boardroomlimited.com

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