GST Changes

Key takeaways

Goods and Services Tax (“GST”) rate will increase from 8% to 9% from 1 January 2024.

What is GST?GST is a consumption tax that is levied on the supply of goods and services in Singapore and the import of goods into Singapore (collected by Singapore Customs). In other countries, GST is known as the Value-Added Tax or VAT.

About Singapore’s GST rate changeIn the Singapore Budget 2022, the Minister for Finance announced that the GST rate will be increased from:(i) 7% to 8% with effect from 1 January 2023; and(ii) 8% to 9% with effect from 1 January 2024.For more information, please refer to IRAS’ website here.

How will the GST rate change affect you as a customer?GST exemptions apply to the provision of certain financial services. As a general rule, purchases of goods and services from GST-registered businesses before 1 January 2024 will be subject to GST at 8%, and purchases on or after 1 January 2024 will be subject to GST at 9%. There are scenarios where special GST rules will apply for events that straddle 1 January 2024. Please refer to IRAS' website here for such scenarios.

Impact on banking services and products:

As prevailing practice, fees and services relating to products that are not subject to GST are not impacted by the rate change.

Examples of fees and services not subject to GST include:

Fees incurred for the operations of current, deposit or savings account
Remittance and money transfers – issuance of bank drafts, cheques, money order, direct debits, GIRO/ Standing instructions, transfers between accounts
Interest on loans and advances including overdrafts, mortgage loans, trust receipts, foreign currency loans
Interest earned on deposits

Examples of fees and services subject to GST include:

Arranging, broking, underwriting, custody and advisory services
Credit cards – annual fees, chargeback fees, air miles conversion admin fee and statement retrieval fees
CPF Investment Account – transaction fees, service charges
Fees charged to cash card holder for each cash card statement printout
Safe Deposit Box rental
Unit Trust commission/ management fees
Trustee – custodian/ management fee
Commission, brokerage and other service fees relating to the Derivatives Clearing and Execution Account

(Kindly note that the above list is not exhaustive.)

General

What are the changes made to the GST rate?

As announced by the Finance Minister in the 2022 Budget, the GST rate will increase from 7% to 9% over the following periods:

1 July 2007 to 31 December 2022: 7%
1 January 2023 to 31 December 2023: 8%
1 January 2024 onwards: 9%

Am I impacted by the GST rate change?

For existing fees and services that are currently charged with GST, the GST rate will increase according to the announced implementation dates.

There are no changes to existing fees and services that are not subject to GST.

Current and Savings Account

Will my Current Account(s) and/ or Savings Account(s) be subject to GST?

Charges for the operation of Current Accounts and Savings Accounts are GST exempted. No GST is charged on these services. There will also be no GST levied on interest earned on deposits.

Loans

Will my loans/ mortgage/ auto financing be subject to GST?

Payment of principal loan amount and interest (monthly instalment) are not subject to GST.

Are there loan-related fees that will be subject to GST?

Application fee and audit confirmation of customer's loan accounts are subject to GST.

Is stamp duty subject to GST?

Stamp duty is not subject to GST.

Credit cards

What are the charges to my credit card that will be subject to GST?

Annual fees, chargeback fees, air miles conversion administrative fees and statement retrieval fees will be subject to GST.

Will I have to pay GST if the annual fee for my credit card is waived?

No GST will be levied if your credit card fee is waived.

Are late payment and finance charges subject to GST?

Late payment and finance charges (monthly interest) are exempt from GST.

Are cash advance fees subject to GST?

No, they are exempt from GST.

Remittances

Will interbank GIRO/ FAST/ Telegraphic Transfer be subject to GST?

Interbank GIRO/ FAST / Telegraphic Transfer are exempted from GST.

Are telegraphic transfers and SWIFT duplicate statement of transactions subject to GST?

Duplicate statement of transactions are subject to GST.

Are charges for bankers’ drafts/ money order/ cheque order subject to GST?

Issuance, collection, amendment and stop payment charges are exempted from GST.

Derivatives

Will commission, brokerage and other service fees on the Derivatives Clearing & Execution Account be subject to GST?

Commission, brokerage and other related service fees on the Derivatives Clearing & Execution Account will be subject to GST.

Others

Are safe deposit boxes subject to GST?

Rental fees and charges relating to the loss of keys are subject to GST.

Will foreign exchange transactions be subject to GST?

Foreign currency exchange transactions are exempted from GST.