In a country that regularly ranks among the top 3 worldwide for competitiveness, resilience, and wealth per capita, and is one of Asia’s most digitally advanced societies, online shopping has become a routine part of daily life, driven by convenience and the emergence of new digital commerce models. Although Singapore is the smallest e-commerce market in Southeast Asia, it is also the most affluent, with an average online order value of USD 137.40. 

Singaporeans' purchasing habits are increasingly extending beyond domestic platforms, positioning the country as a cross-border e-commerce hub, hosting two of Southeast Asia’s largest e-commerce marketplaces, Shopee and Lazada, which dominate regional traffic and sales. Nevertheless, the competition is growing with the entrance of new market players, such as social commerce platforms like TikTok Shop. While all of this represents a great opportunity for businesses, it also bears significant GST compliance implications.

GST Registration Requirements in Singapore

Under Singapore’s overseas vendor registration (OVR) regime, foreign businesses with annual turnover exceeding SGD 1 million (approximately USD 790,000) and that supply B2C remote services or low-value goods to Singaporean customers exceeding SGD 100,000 (approximately USD 79,000) per year, are required to register for GST. 

In this context, remote services are those that the customer can consume without being physically present where the service is performed. On the other hand, low-value goods are items shipped from outside Singapore and delivered by air or post, valued at SGD 400 (approximately USD 320) or less.

Singapore eased compliance requirements for these businesses, allowing them to operate under a simplified pay-only system. However, while registering under this regime is simplified, it does not allow businesses to claim input tax on purchases made in Singapore.

Given the rise in cross-border sales, the Inland Revenue Authority of Singapore (IRAS) implemented the deemed supplier rule, treating electronic marketplace operators as the suppliers of low-value goods and remote services sold through their platforms. As a result, marketplace operators must include these sales when determining their GST registration obligations and charge GST accordingly.

Similarly, foreign redeliverers who assist in purchasing or delivering low-value goods to Singaporean customers are regarded as suppliers for GST purposes and must account for GST on these transactions once registered.

The SGD 1 million and SGD 100,000 thresholds can be calculated either retrospectively or prospectively. On a retrospective basis, registration is required if, in the previous calendar year, foreign business exceeded the global annual and domestic annual thresholds. In contrast, on a prospective basis, businesses must register for GST if they reasonably expect that, over the next 12 months, their global turnover and B2C supplies to Singapore will exceed the same thresholds.

Key GST Compliance Obligations

Once the threshold is exceeded, foreign businesses may complete the GST registration process by submitting an online GST registration application form. As part of the procedure, businesses must provide a Declaration Form signed by a director, partner, or sole proprietor, along with a Certificate of Incorporation that is officially translated into English and notarised, showing the entity name, date of incorporation, and country of incorporation. 

Notably, it is not mandatory to appoint a local agent or provide a guarantee during registration, except when applying for voluntary GST registration. Once registered, foreign businesses must charge and remmit 9% GST rate on all taxable supplies to Singapore.

One of the main obligations for foreign businesses is to file a GST return quarterly via the e-Filing system. Businesses registered under the simplified pay-only regime submit simplified GST returns containing only the necessary fields. All returns and payments must be filed and made within one month after the end of each accounting period.

It is essential to note that all prices on websites, online stores, or marketplaces must include GST when dealing with Singapore consumers. Regarding invoicing requirements, as with local GST-registered businesses, foreign businesses must maintain proper business and accounting records for at least 5 years.

Risks of Non-Compliance for Foreign Businesses

Foreign businesses failing to meet their GST compliance obligations adn requirements risk facing severe penalties:

GST Compliance Breach

Penalty/Consequence

Late notification of GST registration

Backdate registration to the date the business first became liable to register for GST, a fine of up to SGD 10,000 (about USD 7,900) and a penalty equal to 10% of the GST due, with the possibility of prosecution.

Late filing or non-filing of GST returns

IRAS may issue an estimated Notice of Assessment based on its own assessment of the tax payable and impose a 5% late payment penalty on the estimated amount, in addition to a late submission penalty of up to SGD 5,000 (around USD 3,950).

Submission of incorrect GST returns

Penalties of up to 200% of the tax undercharged, in addition to potential fines and imprisonment. Cases involving fraud are treated even more seriously.

Late payment or not paying

A 5% penalty is imposed on the unpaid tax. If the tax remains unpaid 60 days after the due date, an additional penalty of 2% per month may be applied on the outstanding amount. This additional penalty is capped at 50% of the unpaid tax.

Failure to comply with price display requirements

A penalty of up to SGD 5,000 may be imposed.

Compliance Recommendations and Considerations

One of the first steps for foreign businesses operating in Singapore is to closely monitor taxable supplies. This includes maintaining accurate sales records and regularly evaluating turnover against global and local registration thresholds.

Once registered, businesses must keep in mind that nil or zero GST returns are required for accounting periods with no transactions. Additionally, GST-registered taxable persons must issue a tax invoice, or where applicable, a customer accounting tax invoice, in accordance with the requirements set by the IRAS. However, if the total amount payable for a supply, including GST, does not exceed SGD 1,000 (around USD 790), a simplified tax invoice may be issued instead of a full tax invoice.

Furthermore, GST-registered businesses must inform the GST Comptroller of any significant changes to their business particulars. The Comptroller must be informed within 30 days of any relevant change, such as a change in GST mailing address, business constitution or ownership, change in partners, or changes in the particulars of existing partners.

Source: Statista - E-commerce in Singapore, IRAS - Overseas businesses, IRAS - Local businesses, IRAS - Applying for GST registration, VATabout