GST Changes from 1st January 2023

14 December 2022 | News

2022 went by in a blink of an eye and 2023 is waiting for us around the corner, with all the changes in indirect taxation it will bring along. We have collated all the important GST changes being applicable from 1st January 2023 that you need to be aware of! Let us look at the changes one by one.

1- GST rate will increase from 7% to 8%

Singapore will increase its GST from January 1, 2023, from seven to eight percent. The change is only the first of two planned increases in the GST rate as announced in the 2022 budget. The second increase, from 8% to 9%, will occur on January 1, 2024.

GST-registered businesses must be prepared for the upcoming rate change. Systems, documents and data automation may also be affected by the change. For a smooth change, few items should be prepared for the rate increase such as:

  • Accounting, and Sales Systems
  • Update of sales invoicing formats
  • Point of Sale system changes
  • Price lists
  • Changes to prices listed on websites or product shelves
  • Modification of internal price lists and product brochures
  • Contracts

Other process that may be affected by the changes:

  • impact in cashflow
  • Proper communication with costumer how GST increase will impact them

Transitional rules to take note

The timing of supply continues to be based on the invoicing date or payment date, whichever is earlier.

For any goods/services fully delivered before 1 January 2023, it is possible to charge GST at the old rate for the full value of goods/services received, even if the time of supply is after 1 January 2023.

For any goods/services partially received before 1 January 2023, it is possible to charge GST at the old rate on the portion of goods/services received before 1 January 2023, even if the time of supply is after 1 January 2023.

2 – Changes to the Overseas Vendor Registration (OVR) regime

Under the current OVR regime, it is mandatory to register for GST for any overseas supplier if:

  • the global turnover exceeds S$1 million;
  • he supplies B2C (Business to Consumer) with digital services in Singapore exceeding S$100,000 for the relevant 12-month period.

With effect as of 1 January 2023,  the OVR regime will be extend to the supplies of:

  • non-digital services
  • import of low value goods (no dutiable good not exceeding S$400)

Examples of non-digital services include advisory, professional, consultancy or educational services supplied from outside Singapore.

3 – Travel Agency Services

From 1 January 2023, travel arrangements by local agents will no longer be based on the place of destination.

Travel agency services to customers can only be zero rated if the customer is an overseas person or a GST-  registered person in Singapore. This change only applies to the travel agent fees. However, this means holiday travel may become a slightly more expensive affair for individuals.