Important Updates

Notification of Goods and Services Tax (GST) Rate Change and GST treatment for travel arranging services  

In the 2022 budget, the Minister for Finance announced that the GST rate will be increased from: 

  • 7% to 8%, with effect from 1 Jan 2023; and 

  • 8% to 9%, with effect from 1 Jan 2024.  

Also, the basis for determining whether zero-rating applies to a supply of travel arranging services will be updated, to be based on where the customer and direct beneficiary of the services belong. Specifically, zero-rating will apply if the services are contractually supplied to an overseas person and directly benefiting an overseas person or a GST-registered person in Singapore. If the customer belongs in Singapore, the supply of travel arranging services will be standard rated. 

More information can be found on IRAS’s website. 

What does this mean for me: 

The impact of this is that, FCM Singapore Pte Ltd is now required to charge Goods and Services Tax (GST) for some of the services we offer as per the government guidance. The greatest change that you will experience as a client is that we will be required to charge GST on service charges at a rate of 8% from 01st January 2023 and 9% from 01st January 2024. 

Full details of what is eligible for GST and what isn’t are highlighted in the below table, with current, post 1 Jan 2023 and post 1 Jan 2024 called out:           

Supply of Services

Now till end of 2022

Jan 2023 to Dec 2023

Jan 2024 and onwards

Arranging of international transport of passengers and related insurance:


- From Singapore to a place outside Singapore;
- From a place outside Singapore to Singapore; or
- From a place outside Singapore to another place outside Singapore


E.g., Services to arrange or facilitate the booking/purchase of air tickets, travel insurance

Contract with a local customer:
Zero rated at 0% GST


Contract with an overseas customer:
Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated.

Contract with a local customer:
Standard rated at 8% GST


Contract with an overseas customer:
Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated.

Contract with a local customer:
Standard rated at 9% GST


Contract with an overseas customer:
Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated.

Arranging of accommodation 
E.g., Services to arrange or facilitate the booking of hotels or hostels 

Depends on the location of property:

 
-Standard-rate GST if the property is located in Singapore
 -Zero-rate under section 21(3)(e) if the property is located outside Singapore 

Contract with a local customer: 
Standard rated at 8% GST
Contract with an overseas customer: 


Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated. 

Contract with a local customer: 
Standard rated at 9% GST
Contract with an overseas customer: 


Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated. 

Arranging of inbound/outbound tour package 

Contract with an overseas customer: 

Standard rated at 7% GST


Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated.

Contract with an overseas customer: 

Standard rated at 8% GST


Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated. 

Contract with an overseas customer: 

Standard rated at 9% GST


Zero-rate (0% GST) if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, the service has to be standard rated. 

 

The GST treatment for supply of travel related product remains unchanged as illustrated below.  

Supply of Services/Goods  

GST Treatment  

Supply of international transport of passengers:  
 
-From Singapore to a place outside Singapore  
-From a place outside Singapore to Singapore; or   
-From a place outside Singapore to another place outside Singapore  


E.g. Sale of air tickets, ferry tickets and coach tickets to neighbouring countries. 

  • Zero-rate under section 21(3)(a)  

Supply of travel insurance for international transport of passengers  

  • Zero-rate under section 21(3)(c)  

Supply of travel accommodation  

  • Depends on the location of property 

  • Standard-rate if the property is located in Singapore  

  • Outside the scope of GST if the property is located outside Singapore  

Supply of outbound tour package  

  • Zero-rate under section 21(3)(i)  

Supply of inbound tour package  

  • Standard-rate 

 

Type of taxable supply  

Type of taxable supply 

Definition 

Standard-rated  

  • GST is charged at the prevailing rate of 7% by GST-registered businesses. 

Zero-rated  

  • GST is charged at 0% by GST-registered businesses. 
    There are two categories of zero-rated supply: 
    1) exports of goods;   2) provision of international services. 

More information can be found from Ministry of Finance (MOF) 's website

 

Q: Where to confirm FCM Singapore Pte Ltd is a GST-registered business?  

A: You may visit GST Registered Business Search by entering FCM Singapore Pte Ltd as the name or M200155971, which is the GST registration number.  

 

Frequently asked questions 

Q: Are my flights overseas (such as to London) subject to GST?  

A: No, international travel is zero rated under GST Act S21(3)(A). 

Q: Is my hotel overseas (such as in London) subject to GST?  

A: No, hotels located outside of Singapore are zero rated under GST Act S21(3)(E).

Q: Is my hotel in Singapore subject to GST?  

A: Yes, it’s standard rated as the hotel is located in Singapore.  

Q: Is my travel insurance subject to GST?  

A: No, it’s zero rated under GST Act S21(3)(C)  Refer to IRAS’s website for more information.  

Q: Is the service fee charged by FCM Singapore subject to GST?  

A: Service fee charged for travel arranged from 1 Jan 2023 is subject to 8% GST (standard rated), 8% to 9% from 1 Jan 2024 if the client belongs in Singapore, otherwise zero-rated.  

Refer to IRAS’s website for more information.  

 

Service fee charged for travel arranged before 1 Jan 2023 

Service fee charged for travel arranged on/after 1 Jan 2023 

Not subject to GST 

Subject to 8% of GST