Online businesses have a great opportunity to grow thanks to international sales. However, they also bring up a number of issues, such as how to handle import regulations. It is imperative for business owners to do a research on Singapore’s import tax and customs fees before shipping goods there. In this article, we would introduce everything you need to know about import tax & duty in Singapore.
What is import tax in Singapore?
Except for items that fall under an exempt category, all commodities carried into Singapore are subject to the Goods and Services Tax (GST).
Singapore Goods and Services Tax (GST)
GST is computed using the item’s worth and may additionally take into account the cost, insurance, freight, and other chargeable expenses. You must pay regardless of whether you already paid a foreign sales tax when purchasing the products. All items entering Singapore are subject to a 7% Goods and Service Tax. However, the government has declared that by 2025, this will be increased to 9% (The Straits Times).
Singapore customs duty
All commodities that enter one country from another often have to pay customs duty; because the goods are crossing international borders. Singapore does not often impose Singapore customs duty on imported goods because it runs a free port.
Singapore excise duty
The majority of nations charge an excise tax on imported goods that they aim to deter citizens from purchasing. As a result, they are typically used in conjunction with products that could be regarded hazardous for both social and environmental reasons. The majority of internet sellers won’t have to worry about paying excise duty when importing goods to Singapore. For this sort of Singapore import duty, the nation mentions the following four product categories:
-
- – alcoholic beverages
-
- – motor vehicles
-
- – tobacco and cigarettes
-
- – petroleum products and biodiesel mixes
How does the import tax in Singapore operate?
All items arriving in Singapore are subject to GST, one component of the Singapore import tax regime, as we have already mentioned.
Two ways to pay import tax in Singapore
In Singapore, there are two ways to pay customs tax:
The first way is to submit a declaration in advance before returning to Singapore (or before the goods arrive). Utilizing the Customs@SG mobile app or website, you must do this no later than three days before your arrival. Once this process is finished, you should be given an electronic receipt to carry with you in case you are questioned by customs upon entering Singapore. You can easily present this as proof of GST payment on your smartphone or other mobile device.
The other way is to submit a GST declaration and payment at the Customs Tax Payment Office.
As the importer of the products, it is your responsibility to declare the value of the goods honestly, accurately, and completely and to pay the appropriate GST.
You still need to pay the import tax even if the item(s) you’re importing don’t have a receipt or price tag. The price paid at the time of purchase or the price of comparable or identical items in the nation in which you purchased the item will serve as the basis for an estimation of value for GST purposes.
GST relief
You should notice that products brought back for consuming or personal use are exempt from GST.
GST relief for Singaporean holiday makers
You may be eligible for GST relief if you purchase items outside of Singapore with the intention of bringing them back for personal use.
You cannot receive GST relief if you import goods into Singapore for your company since this does not apply to any goods brought in for business.
The length of your absence from Singapore will determine how much GST relief you receive. You will receive S$500 in GST relief if you travel abroad for at least 48 hours. You can only receive a GST reduction of S$100 for international journeys that last less than 48 hours.
The most expensive item you can bring back into Singapore (for personal use) without having to pay customs tax is worth up to this amount. If the price of your items exceeds your GST relief limitation, you will be responsible for paying tax on the balance.
GST exemptions for postal or courier orders
You can receive GST relief on purchases up to S$400 if you shop online and use international shipping for postal imports of products from abroad.
However, a significant distinction from importing items into the nation on your own is that if the order value is greater than S$400, you won’t be eligible for any GST relief. Therefore, the import tax of 7% is applied to the entire order amount if you go over this limit.
Singapore GST exemptions
Not all of the items you want to bring back from your vacation will be exempt from GST. The GST exemptions are (including purchases made during online shopping):
-
- – alcoholic beverages
-
- – motor vehicles
-
- – tobacco and cigarettes
-
- – petroleum products and biodiesel mixes
Remember that only Singapore citizens and permanent residents are eligible for the GST relief. You might not be qualified for GST exemption even if your time in Singapore is covered by a work, student, dependent, or long-term pass. Thus, the 7% import tax may apply to everything you ship to Singapore or bring back from outside.
Payment of import tax in Singapore
All import taxes and charges in Singapore must be settled in Singapore Dollars. This holds true even if you purchased things using a different currency. To make this easier, the Monetary Authority of Singapore (MAS) releases a Singapore custom exchange rate each week. The MAS website has the rates released one week in advance.
The following payment methods are also available for paying duties and GST:
– Visa or Master credit cards on the Customs@SG Web Application
– All major credit cards (MasterCard, Visa, and American Express), mobile wallets, NETS, and Cashcard are accepted at the Singapore Customs Tax Payment Office.
Conclusion
Making sure your consumers are at ease making purchases from your store and have confidence that their order will be delivered safely to their location is one of the most crucial aspects of managing a global e-commerce brand. Making sure clients are aware of the exact amount of import tax and duty they will be required to pay is one aspect of this. By assisting you to compute these automatically in your store, Shopify makes this procedure simpler for customers in Singapore and elsewhere. If you want to build an ecommerce website on Shopify, Scuti is here to help.