Cross-border trade compliance platform provider Eurora Solutions has commented on upcoming regulation changes which directly affec UK and EU companies exporting low-value goods.
From January 1st 2023, the Singapore GST exemption on imported low-value goods (up to S$400 or £250) will be discontinued, and all goods delivered to Singapore via air or post will be subject to GST. Simultaneously, the current GST rate will rise from seven per cent to eight per cent.
Overseas vendors are liable for registration, under either the retrospective or prospective basis, if they have a global turnover exceeding S$1 million (£626,000/€717,500) and supply B2C low-value goods and remote services (i.e. digital services) to Singapore, exceeding S$100 000 (£62,100/€71,800) in value. Businesses exceeding these thresholds could start registering for GST on 1 October 2022.
Marko Lastik, founder and CEO of Eurora Solutions, said: “Complying with this new regulation will be a challenge for merchants and logistics operators from the UK, the EU, the United States, China and the rest of the world. Eurora is well positioned to support companies with compliance with the new laws, as the changes are similar to the ones introduced by the EU in July 2021. Eurora’s team of tax experts will take responsibility for the overseas vendor registration regime without companies having to navigate the paperwork. Additionally, our proprietary AI/ML-powered cross-border compliance platform calculates the GST and automates filing the necessary documentation with the Singaporian customs authorities, allowing companies to focus on their core business.” Eurora plans to open a Singapore Cental office by December this year to meet the projected surge in demand in the region.
As the extension of GST is similar to the legislative changes introduced by the EU, Eurora, through its wholly-owned subsidiary, a Singapore-based logistics provider GTS Express, is well placed to provide advice and support with adherence to the new legislation. Eurora’s tax consultants help businesses navigate the changes in legislation whilst the companies can focus on growing their business. Registration for the scheme with Eurora can take as little as two hours, and thanks to the company’s AI/ML-powered technology, Eurora can offer its services at an unmatched quality and price point.
According to the latest statistics from the UK Department for International Trade, the total UK exports of goods to Singapore amounted to £5.4 billion in the four quarters to the end of Q1 2022 (an increase of 33.1 per cent or £1.3 billion compared to the same period the year before). The value of EU goods exports to Singapore in 2021 was €27 billion.
Singapore’s move follows a global trend to scrap the VAT or GST exemptions on imported online sales of goods. Countries such as Norway and the UK recently scrapped the VAT exemption for low-value goods, and in July 2021, the EU followed suit. Governments worldwide aim to create a level playing field for national online and high-street retailers and boost tax revenues following the rapid growth of e-commerce during the COVID-19 crisis.
According to TechCrunch‘s coverage of IBM’s US Retail Index, the COVID-19 pandemic accelerated the shift to Ecommerce by five years, with online sales reaching levels in 2020 that weren’t expected until 2025.