Tax Advisory Services for Digital Economy 

Singapore government has taken steps to look at ways to tax the digital economy. With effect from 1 January 2020, overseas businesses (including
overseas suppliers and electronic marketplace operators) which provide digital services to Business-to-Consumer (B2C) customers (i.e., non-Goods and Services Tax [GST] registered customers) would have to charge Singapore GST at the current standard rate of 7% if they are registered under the Overseas Vendor Registration (OVR) regime.

Under the OVR regime, any overseas vendor with a global annual turnover
exceeding S$1 million and makes annual B2C supplies of digital services to
non-GST registered customers in Singapore exceeding S$100,000 would be liable for GST registration under the OVR regime. Examples of in-scope digital
services include but not limited to digital products, software updates, music,
search engine, access to online database, live streaming services and distance
teaching through any pre-recorded medium.

We provide various GST services to clients affected by the OVR regime
and our services include but not limited to the following:

• Advise clients on whether their services are within scope of OVR.
• Assess clients’ GST registration liability under the OVR.
• Assist in the application for GST registration.
• Assist in the preparation and e-filing of GST returns after clients are registered for GST under the OVR regime.

In addition, we help many multinational clients coordinate for Asia-wide
advice and assistance in their VAT/GST registration and filing obligations in
respect of similar regimes in other Asia Pacific countries.

Opinion piece

The digital economy and GST

It is not easy to define the digital economy; indeed the Organisation for Economic Cooperation and Development (OECD) admits as much. However, it is possible to point to examples of how consumers make use of it: when they download a game from an online gaming company, purchase songs through a music platform or order physical goods through a web-based portal and have the goods delivered via the postal system.

The dawn of taxation in the digital economy

The retail sector is a major contributor to the growth of Singapore’s economy but the rise of e-commerce, dominated mainly by overseas retailers, has resulted in more money flowing out of the country. As many of the largest online retailers are located outside of Singapore, the products and services escape Singapore domestic GST and often the goods they sell are brought into the country without any import GST being due.