Another change that is closely related to the introduction of GST on LVG is the OVR regime.
The OVR regime was introduced by IRAS so that overseas suppliers that makes supply of digital services to non-GST registered customers in Singapore (i.e. people like you and I) are registered for GST in Singapore (if the conditions are met), and to charge and account for GST on the supplies.
From 1 January 2023, the scope of OVR regime will also be extended to include non-digital services (collectively known as remote services) and LVG. All in effort to level the playing field for local businesses in Singapore to compete effectively.
Remote services include any services where at the time of the performance of the service, has no necessary connection between the physical location of the recipient and the place of the physical performance of the service. But, excludes the following services:
- Exempt services described in Fourth Schedule of the GST Act
- Services that qualify for zero-rating under section 21(3) of the GST Act had they been provided by a local supplier
- Services provided by an overseas government, that are of a nature described in the Schedule to the GST (Non-Taxable Government Supplies) Order of the GST Act
On-the-spot services that require the customer to be physically located at the place where the services are provided.
The key thing to note on the change in the OVR regime come 1 January 2023 would basically be the GST registration criteria. Generally, with effect from 1 January 2023, overseas suppliers will be liable for registration under the OVR regime if:
- They have a global turnover exceeding S$1 million; and
- They make B2C supplies of low-value goods and remote services to Singapore exceeding S$100,000.
If you are an overseas electronic marketplace operator or an overseas redeliverer, it will be slightly more complicated and it will be best to seek a professional’s help if you are unsure of your GST registration liability. Feel free to speak to us!
On a side note, in view of the update involving LVG and remote services in the coming January 2023, IRAS has updated the following e-tax guides. Have a read in case you have missed them.
- Reverse Charge
- Property Developer
- Transfer Pricing Adjustments
- Time of Supply rules
- Attribution of input tax
- Transfer of Business as a Going concern and other Excluded transactions
- Guidelines on Determining the Belonging Status of Supplier and Customer
- Partial Exemption and Input tax recovery
- Concession for REITS and Qualifying Registered Business Trusts Listed in Singapore
- Guide on Exemption of Investment Precious Metals (IPM)
- Guide for the Insurance Industry
- Guide for Advertising Industry
- Guide on Approved Import GST Suspension Scheme
- Approved Refiner and Consolidator Scheme (ARCS)
- Guide for the Marine Industry
- Guide for e-Commerce
- Approved Third Party Logistics Company Scheme
- Guide for the Aerospace Industry
- Guide for the Logistics Service Industry
- Guide for the Biomedical Industry
- Guide for the Property Owners and Property Holding Companies
- Approved Contract Manufacturer and Trader (ACMT) Scheme
- Claiming of GST on re-import of value-added goods
- Guide for Charities and Non-Profit Organisations