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Taxation - Singapore

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Zero-rated GST on service

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GST is charged on taxable supplies. A taxable supply is a supply of goods or services made in Singapore, other than an exempt supply. A taxable supply can either be a standard rated (currently 7%) or zero-rated supply.

When to charge 0% GST (zero-rate)?

Your services are considered international services, which are zero-rated (i.e. GST is charged at 0%), if they fall within the provisions under Section 21(3) of the GST Act. Depending on the nature of your services, you may be required to determine your customer's belonging status (i.e. whether the customer is a local or an overseas entity) before your supply of services can be zero-rated. It is important to note that not all services provided to overseas customers can be zero-rated.

What nature of services can be zero-rated supply?

International services falls within the description under Section 21(3) of the GST Act can be zero-rated.

For example:

1.	You are a telecommunications company and provide auto roaming service and international calls;
2.	You are a local travel agent and your customer buy international flight ticket;
3.	You provide leasing service for use in Johor;
4.	An event management company charges a fee for organizing a concert outside Singapore;
5.	A management course entirely conducted outside Singapore;
6.	You provide domestic transport services to an overseas customer by collecting the goods from a local warehouse and delivering them to the airport for overseas export;
7.	An architect in Singapore provides design services for a building located outside Singapore;
8.	An estate agent in Singapore sells a house outside Singapore;
9.	You provide market research services for overseas company.

What is customer’s belonging status?

Under certain zero-rating provisions e.g. sections 21(3) (j), (k) and (s), you need to determine the belonging status of your customer, that is, whether your customer belongs to a country outside Singapore, before you can zero-rate your services. Your customer can be either an individual or a business. With effect from 1 Jan 2020, the zero-rating of services under these provisions is extended to services which directly benefit a GST-registered person belonging in Singapore, provided all other conditions specified in the provisions are satisfied:

Customer is an Individual.
Your customer will be treated as belonging in Singapore if his usual place of residence is in Singapore during the period of service. For GST purposes, an individual should have only one usual place of residence at any point in time.

Customer is a Business.
Your customer will be treated as belonging in Singapore when:

(1)	It has a business establishment or some fixed establishment in Singapore and nowhere else;
(2)	It is legally constituted in Singapore (e.g. company incorporated in Singapore) and has no business or fixed establishment in any other country;
(3)	It has establishments both in Singapore and outside of Singapore but services are most directly used or to be used at the establishment in Singapore.

I provide medical services to a foreign individual in Singapore. Can I zero-rate my services since the individual is an overseas person?

No. Under section 21(3)(j), the services must be provided to an overseas person who is not in Singapore at the time the services are performed. Not all services provided to an overseas person can be zero-rated.

I am engaged by a local company to perform my consultancy services overseas. My services are performed completely outside Singapore. Can I zero-rate my services?

Services performed completely outside Singapore may only be zero-rated if it falls within the list of services described in section 21(3)(i). Consultancy services do not fall within the list of services . Hence, you should standard-rate your consultancy services.

Exceptions:

1.	If your services are directly in connection with land or building located outside Singapore, you may zero-rate your services under section 21(3)(e);
2.	If your services are directly in connection with goods located outside Singapore at the time services are performed, you may zero-rate your services under section 21(3)(f).

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