SINGAPORE Law and Practice Contributed by: Yang Shi Yong, Drew & Napier LLC
9.13 Approach to Digital Services Taxation Other than the GST on the digital economy business, Singapore has not introduced any other digital taxa - tion rules or laws on income taxation. The tax authori - ties have provided certain guidelines on the tax treat - ment of transactions involving digital tokens. 9.14 Offshore IP Provisions Subject to certain exceptions, withholding tax of 10% will be imposed if royalties are paid for the use of offshore intellectual property to a non-Singapore tax resident. Such withholding tax is applicable if the payment: • is borne by a Singapore tax-resident person or a person with a Singapore permanent establishment; or • is deductible against any Singapore-sourced income. The withholding tax rate may be reduced, or the roy - alty payments exempted from tax under the relevant DTA. The Act does not impose differing tax treatments on owners of IP in tax havens as long as any related- party arrangements for the use of intellectual property (if any) are at arm’s length and do not constitute an abuse of the DTAs.
Overseas Vendor Registration Regime The overseas vendor registration regime applies to any overseas supplier and operator of an electronic marketplace that, under certain conditions: • has a global revenue exceeding SGD1 million; and • makes supplies of remote services and/or low value goods exceeding SGD100,000 to Singapore customers. Under the overseas vendor registration regime, the overseas supplier and operator have to register and account for GST on supplies of remote services and/ or low value goods to non-GST registered customers in Singapore. Remote services refer to services where, at the time of the performance of the service, there is no nec - essary connection between the physical location of the recipient and the place of physical performance. This may be digital or non-digital services. Low value goods are goods that at the point of sale: • are not dutiable goods; • are dutiable goods for which payment of the cus - toms duty or excise duty is waived; • are not exempt from GST; • are located outside Singapore and are to be deliv -
ered to Singapore via air or post; and • have a value not exceeding SGD400.
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