03.23.22

The upcoming change in GST rate

In the Budget 2022, the Minister of Finance in Singapore announced two steps to increase the GST rate:

• from 7% to 8% with effect from 1 Jan 2023.
• from 8% to 9% with effect from 1 Jan 2024.

The IRAS (Inland Revenue Authority of Singapore) stated that the increased revenue from GST will be used to fund healthcare expenditures for seniors in the country.

Moreover, the GST treatment for travel arranging services will be updated from 1 January 2023, 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:

• if the customer of the service belongs in Singapore, the travel arranging service will be standard-rated; or
• 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.