General Changes

Increase in the Goods and Services Tax (”GST”) Rate

Current The current GST rate is 7%.

Proposed The GST rate will be increased in two steps:

1. From 7% to 8% with effect from 1 January 2023; and
2. From 8% to 9% with effect from 1 January 2024.

To read the Inland Revenue Authority of Singapore’s (”IRAS”) guide on the GST rate change for businesses, click **here.**

To download the e-Tax Guide on the GST rate change in 2023 click below:

etaxguide_2023-gst-rate-change_1st-edition.pdf

GST Treatment for Travel Arranging Services

Current Currently, the GST treatment of the following travel arranging services provided by local suppliers is as follows:

1. Services comprising the arranging of international transport of passengers and the arranging of insurance related to such transportation are zero-rated; and
2. Services comprising the arranging of accommodation are standard-rated if the property is located in Singapore, and zero-rated if the property is located outside Singapore.

Proposed The basis for determining whether zero-rating applies to a supply of travel arranging services will be updated, to be based on the place where the customer (i.e. the contractual customer) and direct beneficiary of the service belong:

1. If the customer of the service belongs in Singapore, the travel arranging service will be standard-rated; or
2. If the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the travel arranging service will be zero-rated.

This change will take effect from 1 January 2023. IRAS will provide further details on the changes by 31 July 2022.

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Ensuring your Organisation is Up-to-Date on GST Compliance

In the course of assisting businesses in dealing with the Inland Revenue Authority of Singapore and addressing their GST concerns, we have come across errors which expose them to penalties, as well as opportunities for GST savings.

To learn more, click here.

Connect with our

Tax Experts

Sivakumar Saravan Senior Partner & Head of Tax [email protected]

Adrian Kong Director, Tax [email protected]

Liew Kin Meng Director, Tax [email protected]

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