Welcome to our E-Newsletter March 2018
We hope you have a prosperous Chinese New Year!
The year ahead of us promises to bring many challenges, but the dawn of the Chinese New Year also brings in opportunities to prosper and grow. Singaporeans usher in the auspicious Chinese New Year with Singapore Budget 2018 themed “Together, a better future”.
Earlier this week, the Minister for Finance of Singapore, Mr Heng Swee Keat has announced the Budget 2018 in Parliament on Monday, 19 February 2018. The Budget 2018, in summary, was all about increasing government revenue via higher taxes in order to pay for rising spending needs. On a brighter side, the budget reflects the Singaporean government’s efforts to address inequality in Singapore as well as to improve quality of life.
Let us have a quick look at the Singapore Budget 2018.
Introduction of GST on Imported Services
Due to kick in 2020, GST is to be levied on imported services on or after Jan 1, 2020. The new tax system will affect two types of services: business-to-business (B2B), such as marketing services, accounting services and IT services; and business-to-consumer (B2C), including video and music streaming services, apps, and online subscription fees. The GST, however, does not affect e-commerce for goods such as online shopping. In addition, overseas suppliers, which have establishments in Singapore, do not need to pay the new tax. Under the new tax system, B2C imported services will be taxed under an overseas vendor registration model, while B2B imported services will be levied through a reverse charge mechanism (reverse charges and overseas vendor registration are commonly used in countries that implement GST on imported services, such as Australia, Japan, South Korea and New Zealand).
The reverse charge only applies to businesses that: (i) make exempt supplies, or (ii) do not make any taxable supplies. On the other hand, the taxation of B2C imported services will take effect via an Overseas Vendor Registration (OVR) model that requires overseas suppliers and electronic marketplace operators, which make significant supplies of digital services to local consumers to register with IRAS for GST.
GST hike from 7% to 9%
Another highlight of the Singapore Budget 2018 is the 2% GST rate hike. Planned to be imposed sometime between 2021 and 2025, the tax hike is depending on Singapore’s economy – how much Singaporeans’ expenditures grow, and how buoyant the existing taxes are.
Buyer’s Stamp Duty Hike
The buyer’s stamp duty hike is one of the most-talked topics following the announcement of the new budget as the top marginal Buyer’s Stamp Duty (BSD) rate for residential properties worth more than S$1m will be raised to 4 %.
Personal Income Tax Filing Season
Lastly, we would like to remind you that tax season is right around the corner. The annual personal tax returns for the Year 2017 must be filed with IRAS by 15 April 2018. For the employer, you need to prepare Form IR8A and Appendix 8A, Appendix 8B or Form IR8S (where applicable) for all of your staff including directors (who are employed in Singapore) by 1st March each year.
Going forward, we continue our efforts to grow and provide services that exceed expectations. We will steadfastly uphold our corporate philosophy, as one of the leading one-stop solution providers in Singapore. We look forward to your continued support and patronage.
Read More in our E-Newsletter March 2018 .