Is it true that I have to pay GST on items purchased overseas?

Yes, but only if the total value of what you’ve purchased is more than a certain amount. Singaporeans love to travel and shop online...

04 Sep 2014

shopping mock

Yes, but only if the total value of what you've purchased is more than a certain amount. Singaporeans love to travel and shop online, and while it's great to have fun and go bargain hunting, take note of the tax rules on all those good deals too.

But why do I pay GST on things I bought while on overseas trips?

That's because the Goods and Services Tax (GST) is a tax on local consumption, not local purchases. That means that the GST is levied on goods consumed in Singapore, whether or not they are bought overseas or in stores here.

This has been the case since the GST was first introduced on 1 April 1994. The practice is consistent with countries that levy a GST (also known as Value-Added Tax in some countries).

So, all goods, whether from commercial shipments (i.e. shipping of goods) or hand-carried by travellers, are subject to the 7% GST. However, as a convenience to travellers - the international visitors and returning residents alike who hand-carry goods into Singapore for their own consumption - GST relief is granted up to a certain value, depending on how long the traveller is away from Singapore. GST will only have to be paid on the value of imported goods which exceed the amounts stated below:

GST table modified

(Source: Singapore Customs)

So far example, if you have been away from Singapore for a week and purchased S$500 worth of goods, you won't need to pay GST since you are eligible for GST relief for up to S$600 in purchases. But if you purchased S$800 worth of goods on that week-long trip, you would need to pay GST on the excess S$200 ( i.e. S$800 minus the S$600 for which you are eligible for GST relief). Remember, goods you are carrying for other people are also considered yours, and need to be included when calculating your total value of goods.

What about goods I import by post ( e.g. goods ordered via online shopping)?

For goods imported by post, you can get GST relief for amounts of up to S$400 per shipment. However, unlike goods purchased while you are overseas, if the value exceeds S$400, there is no GST relief, and GST is payable on the total value of the shipment.

If I buy a $2,000 bag in Changi Airport’s duty free while leaving for my holiday, will I have to pay tax on that bag when I return to Singapore?

GST is a tax on local consumption. You will be taxed on the newly purchased bag as long as it exceeds your GST relief amount.

And if I pay sales tax while shopping overseas but forget to claim my tax rebate, do I still pay GST?

GST will apply to all items brought into and used in Singapore, whether or not foreign sales tax was paid.

What if there is no price tag or receipt? What if I say that my overseas friend gave me the item?

All new items, including gifts and items that have been purchased overseas, are subject to GST. If receipts for the items are unavailable, their value will be calculated by assessing the values of identical or similar goods.

How are purchases in foreign currencies converted into SGD for tax purposes?

The foreign currencies are converted in Singapore dollars based on the Customs exchange rate available on the Customs website. The Customs exchange rate is computed by averaging the prevailing exchange rates from various local banks in Singapore and hence is reflective of the current market exchange rate. The use of the Customs exchange rate ensures fairness and consistency for both travellers and traders in the conversion of foreign currency into Singapore dollars for the purpose of duty and/or GST collection on goods imported into Singapore during the same period of time.

When do I have to declare and pay GST?

You can do so upon arriving in Singapore, whether by air, sea or vehicle at Changi Airport Terminals 1-3, Singapore Cruise Centre, Marine Bay Cruise Centre, Tanah Merah Ferry Terminal, Tuas Checkpoint or Woodlands Checkpoint. If you need to declare your overseas goods, speak to the Immigration & Checkpoints Authority (ICA) officer at the checkpoint’s Red Channel. There are also self-service Tax Payment Kiosks and the Singapore Customs Tax Payment office, where you can pay your GST. If the receipts for overseas purchases are not available, the value of the goods will be assessed based on the values of identical or similar goods when computing the GST payable.

Travellers who have nothing to declare can exit via the Green Channel, where ICA officers may conduct checks. Those who fail to declare at the Red Channel or pay the taxes due may be fined up to $10,000 and imprisoned for up to 3 years.

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