Digital services like Netflix will be taxed starting next year
Watching your favourite shows on Netflix may get more expensive when the goods and services tax (GST) for imported digital services kicks in on Jan 1.
More than 100 overseas digital service providers have registered for GST under Singapore's Overseas Vendor Registration (OVR) regime, said the Inland Revenue Authority of Singapore (Iras).
Digital services are those supplied over the Internet or those using an electronic network.
Subscription-based media, such as Netflix, is one example of a digital service that will be taxed.
Others include downloadable digital content such as mobile apps and movies, software programmes such as photoshop tools and office suites, and electronic data management such as cloud storage services.
Currently, only locally procured services are subject to GST, while services procured from overseas are not.
Starting next year, prices of these digital services will be inclusive of GST.
Overseas providers who exceed $1 million in their yearly global turnover and sell more than $100,000 worth of digital services to customers in Singapore in a 12-month period, must register and charge for GST.
Iras said this new GST rule levels the playing field for local companies and maintains parity in the GST treatment of all services consumed in Singapore.
Meanwhile, the Iras said there are no changes in the GST treatment for goods purchased online.
GST remains payable on all goods imported to Singapore that are valued for more than $400.
Consumers and businesses can go to the Iras website to check if an overseas digital service provider is registered for GST in Singapore.