Section 15 + Section 21 = All you need to know about 0%, 9% or no GST
The Only 2 Questions That Matter
- Where is the supplier “based”? → Section 15
- Where is the customer “using” the service? → Section 15
- If supplier is in Singapore AND customer uses it overseas → probably 0% (Section 21)
- Everything else → 9% or reverse charge
| Supplier based in SG? | Customer uses it in SG? | GST Rate | Who pays the GST? | Simple example |
| Yes | Yes | 9% | Supplier charges | SG company → company |
| Yes | No | 0% | No GST | SG company → Malaysia office |
| No | Yes | 9% | Customer pays (reverse charge) | Australia office SG company |
| No | No | 0% | No Singapore GST | Malaysia office Thailand office |
Reverse Charge (RC) – What Every Singapore Company Must Know
- When do we have Reverse Charge?
- Singapore company buys services from ANY overseas supplier→ Supplier belongs outside Singapore (Section 15)
- What happens?
- Overseas supplier correctly charges 0% GST (or no GST)
- Singapore customer must:
- Self-calculate 9% GST on the invoice value
- Report & pay this 9% to IRAS
- Can claim it back as input tax (if the cost is for business)→ This is called REVERSE CHARGE
- GST-registered persons who procure services from overseas suppliers, import LVG, and are either not entitled to full input tax credit or belong to GST groups that are not entitled to full input tax credit; and (ii) Non-GST registered persons who procured or will procure services from overseas suppliers and imported LVG exceeding S$1 million in a 12month period and would not be entitled to full input tax credit even if GST registered.
How to Get 0% (Zero-Rated) – We are the supplier
- We can issue invoice at 0% ONLY when
- ALL 3 are true:
1.We are based in Singapore
2.Customer’s people who actually use the service are overseas
3.Service is normal business type (IT, consulting, training, marketing, software, etc.)If customer has a Singapore office and uses it here → must charge 9%
How to Charge 0% – Section 21 Zero-Rating (Super Simple)
| Question | Must be YES for 0% | If answer is NO → Charge 9% |
| 1. Are WE (the supplier) based in Singapore? | YES | Charge 9% |
| 2. Does the CUSTOMER belong outside Singapore? (Their people who actually use our service are overseas) | YES | Charge 9% |
| 3. Is our service one of the normal “international” types? (consulting, IT, software, training, marketing, design, cloud, advertising, etc.) | YES | Charge 9% |
Real Life Examples
- Real examples you can safely charge 0%
- Singapore Co → Malaysia company (no SG branch) → IT support
- Singapore Co → Thailand factory → training course
- Singapore Co → Hong Kong head office → marketing campaign for HK customers
- Singapore Co → Japan customer → software licence used only in Tokyo
Quick Checklist (Print & Stick on Desk)
- Every invoice – ask these 3 questions:
- Are WE (sending the invoice) in Singapore? Yes / No
- Is the CUSTOMER’s team that uses our work in Singapore? Yes → 9% / No → probably 0%
- Golden Rule (big bold):“GST follows the people who use the service – not the contract address.”
One-line rule to remember
- Biggest mistake that forces you to charge 9%
- Customer has a Singapore office/branch and they use our service here→ Even if head office is overseas,
- GST follows the people who actually use it in Singapore → 9%
- One-line rule to remember “Zero-rate only when the work is used 100% overseas by people overseas.”