Singapore affirms the Implementation of Overseas Vendor Registor Regime

Singapore has issued the Overseas Vendor Registration Regime (OVR) 2020 guide. With effect from 1 January 2020, overseas suppliers with a global turnover exceeding SGD1 million and also the ones that make B2C supplies (supplies made to individuals and businesses that are not registered for GST in Singapore) are required to register under the regime. The regime aims to reduce the discrepancies in GST treatment on the services consumed in Singapore.

Digital Service under OVR:

As per the guidelines from Inland Revenue Authority of Singapore (IRAS) ‘digital services’ are defined as the services supplied over the internet or an electronic network and the nature of which renders their supply essentially automated with minimal or no human intervention, and impossible without the use of information technology.

The scheme includes any digital content that can be downloaded, subscription-based media on the internet, software programs, support services, and data management through electronic means.

The new regime states the imposition of GST on the digital services made by overseas suppliers to non-GST customers in Singapore. Those services that are currently zero-rated are excluded from the regime.

Apart from overseas suppliers, B2C supplies made by overseas electronic marketplace operators and local electronic marketplace operators will also fall under the scheme.

Registration Rules:

• Retrospective basis: When the global turnover and value of the digital services provided are of SGD 1 million and SGD 100,000 respectively at the end of any calendar year and IRAS should be notified within 30 days of the end of the calendar year.
• Prospective basis: When the thresholds are expected to exceed for the next 12 months.

Suppliers can determine the customers belonging to Singapore by using proxies such as customer’s bank account details, credit card info, IP address, billing or home address. Overseas suppliers should not charge GST on the digital services provided to GST registered customers who have already given the GST registration numbers.

Overseas suppliers and marketplaces will have to check if they are liable to make the registration and also will need to allocate sufficient resources to the IT system to make it capable to comply with the new regime.