VAT Rates in Singapore
7%Applies to most goods and services.
0%Applies to some goods and services such as food or home energy.
|VAT Rates for Digital Products|
Reporting currency in Singapore is SGD.
Value Added Tax in Singapore
Value added tax (VAT), or Goods and Services Tax (GST) as it is called locally, is a type of indirect consumption tax imposed on the value added to products or services, specifically during different stages of the supply chain. A supply chain may include legally separate entities involved in production, wholesale, distribution, supply, or any other stages that add value to a product.
VAT is generally reclaimed by businesses that are involved in the supply chain and that carry a registered VAT ID. Its local name is GST Registration Number (GST Reg No.). The end-consumer at the end of the supply chain will pay the consumption tax.
Governments around the world use VAT as one of their main sources of revenue. Failure to report and pay VAT may therefore result in heavy penalties.
Charging VAT on Digital Products or Services
Governments want to ensure that they receive taxes on all goods and services consumed by their citizens. Physical products are taxed at customs. Electronically supplied services (ESS) don’t cross any borders to pass through customs. As a business, you are made responsible to charge the applicable VAT regardless whether you are based inside or outside Singapore.
As a supplier of ESS to end-consumers, you’re responsible for applying, collecting and remitting VAT to the individual governments at their various VAT rates.