The Golden Rule
GST follows where the service is used, not where the customer is registered.
The Only 2 Questions That Matter
- Where is the supplier based?
- Where are the people who actually use the service located?
When Can 0% GST Be Charged? (Section 21 – Zero-Rating)
You may charge 0% GST only if ALL conditions below are met:
– Supplier is based in Singapore
– Service is used entirely outside Singapore
– Service is a normal business service (consulting, IT, training, marketing, software, advisory)
Important:
If the customer has a Singapore office or team that uses the service in Singapore, 9% GST must be charged even if their head office is overseas.
Examples Where 0% GST Is Allowed
– Singapore company providing services to an overseas company with no Singapore branch
– Services used fully by overseas teams
– Software licences used only outside Singapore
When 9% GST Must Be Charged
Charge 9% GST if any part of the service is used in Singapore, including:
– Singapore office benefits from the work
– Services support Singapore operations or staff
– Mixed use where Singapore use cannot be clearly excluded
Reverse Charge GST
When a Singapore company buys services from an overseas supplier:
– Overseas supplier charges 0% or no GST
– Singapore customer must self-account for 9% GST
– GST is reported and paid to IRAS
– Input tax may be claimed if allowed
Quick Checklist
– Are we (the supplier) based in Singapore?
– Are the people using the service outside Singapore?
– Is the service 100% used overseas?
If all yes → 0% GST may apply
If any no → 9% GST applies
One-Line Takeaway
Zero-rating only applies when the work is used 100% overseas by people overseas.