Singapore is generally a free port and has an open economy and ease of tax. More than 99% of all imports into Singapore enter the country duty-free. However, for social and environmental reasons, the country collects high excise taxes on distilled spirits and wine, tobacco products, motor vehicles and petroleum products.

Hence, this article focuses on the import requirements, errors, and offences, lastly the calculation of the import tax and customs in Singapore. Let’s keep reading the article!

The Import Tax Requirements

All goods that are imported into Singapore have to be regulated under the Customs Act, the Goods and Services Tax (GST) Act and the Regulation of Imports and Exports Act.

Moreover, imported goods are subjected to GST and duty payment. A customs permit is required to account for the import and tax payment of the goods.

All other goods are non-dutiable and acquire GST only. GST is levied at 7% of the Cost, Insurance, and Freight (CIF) value, which includes duties, if it is a dutiable goods, and other charges, such as costs and expenses to the sale and delivery of the goods into Singapore, whether shown or not shown on the invoice.

There are requirements for the importer to obtain a customs permit before having an actual importation. The importer itself is the party who imports the goods into Singapore:

• For their own account or use; or
• For the account or use of some other person

For example, if an overseas company sells goods to a local company and the commercial invoice indicates the local customer as the consignee, the local customer will be the importer of the goods.

The taxable companies should also check with the Inland Revenue Authority of Singapore (IRAS) on the arrangements to account for the GST.

The importers may be penalised, if they do not comply with the requirements that are under the Customs Act, the Regulation of Imports and Exports Act (RIEA), and their subsidiary legislation. These are the errors and offenses for the importers!

Examples of common offences:

1. Make an incorrect declaration on the value of goods imported into Singapore

• Omission of insurance charges in the value when declaring GST Payment permit to import goods
• Free gifts provided by overseas supplier but not declared in the GST Payment permit

2. Failure to make a declaration of goods imported into Singapore

• Undeclared goods found inside container imported into Singapore

3. Failure to produce trade documents upon request by Singapore Customs

• Failure to produce documents such as invoice, bill of the freight or certificate of origin for verification

4. Failure to produce license or customs permit for customs clearance or endorsement

• Haulier failing to produce the goods and customs permit with supporting documents for endorsement at the checkpoint

5. Unauthorised tampering/opening/breaking/altering or removing of customs lock, seal or other safeguards placed on containerised dutiable goods

• Unauthorised breakage of Customs red seal affixed on the container

For minor offences under the Customs Act and the RIEA, Singapore Customs may offer to combine the offences for a sum not more than S$5.000 per offence. Offenders may be sued if the offences committed are of a fraudulent or serious nature.

The Calculation of Import Tax and Customs in Singapore

All the imported goods to Singapore or manufactured in Singapore are subject to customs duty and excise duty.

Customs duty is a duty levied on goods imported into Singapore, excluding excise duty. Excise duty is a duty levied on goods manufactured in, or imported into Singapore.

The duties are based on ad valorem or specific rates. An ad valorem rate is a percentage of the goods’ customs value, for example, 20% of the customs value. A specific rate is a specified amount per unit of weight or other quantity, for example, S$388.00 per kilogramme. 

There are 4 categories of taxes on imported goods or duties payable:

1. Intoxicating Liquors

a. For alcoholic products with duty rates based on per litre of alcohol

Duties payable = total quantity in litres x Customs and/or excise duty rate x Percentage of alcoholic strength.

For example, company A imports 75 litres of stout with an alcoholic strength of 5%. Assuming the customs and excise duties for stout is S$16 and S$60 per litre of alcohol respectively:

As both customs and excise duties are levied on the import of stout, the duties payable = 75 x (S$16 + 60) x 5% = S$285.

b. For alcoholic products with duty rates based on dutiable content (weight/volume)

Duties payable = Total dutiable quantity in kilogrammes x Customs duty rate

For example, if 1 kilogramme of alcoholic composite concentrates contains 0.2 kilogramme of powdered alcohol, the duties payable = 0.2kg x S$113 = S$22.60.

2. Tobacco Products

a. All tobacco products except cigarettes

Duties payable = Total weight (in kilogrammes) x Excise duty rate

For example, company A imports 100 kilogrammes (kgm) of tobacco stems. Assuming the excise duty for tobacco stems is S$388 per kilogramme. Duties payable = 100 x S$388 = S$38,800

b. Cigarettes

Duties payable = Total number of sticks x Weight of individual sticks (every gramme or part thereof) x Excise duty rate.

For example, company A imports 100 sticks of cigarettes weighing 1.5 grammes each. Assuming the excise duty for cigarettes is 42.7 cents for every gramme or part thereof of each stick:

Since the weight of each cigarette is between 1 and 2 grammes, the weight to be taken to calculate the duties payable is 2 grammes. Hence, duties payable = 100 x 2 x S$0.427 = S$85.40

3. Motor Vehicles

Duties payable = Customs value x Excise duty rate

For example, company A imports a motor car that was bought at S$100,000 on Free on Board (FOB) incoterms. The overseas freight, handling and insurance charges to ship the car to Singapore cost S$1,000. Assuming the excise duty for motor cars is 20% of the customs value: 

Customs value of car = S$101,000. Hence duties payable : S$101,000 x 20% = S$20,200.

4. Petroleum and Biodiesel Blends

a. Petroleum products

Duties payable = Total volume x Excise duty rate.

For example, company A imports 100 litres of unleaded motor spirit of RON 97 and above. Assuming the excise duty for unleaded motor spirit of RON 97 and above is S$6.40 per dal (1 dal = 10 litres): Duties payable = S$6.40 x 10 = S$64.

b. Compressed natural gas (Cng)

Duties payable = Total weight x Excise duty rate.

For example, company A imports 50 kilogrammes of compressed natural gas. Assuming the excise duty for compressed natural gas is S$0.20 per kgm:

Duties payable : S$0.20 x 50 = S$10.

c. Biodiesel Blend

Duties Payable = Volume of diesel x Excise duty rate

For example, company A imports 1.000 litres of biodiesel blend, comprising 100 litres of diesel. Assuming the excise duty for diesel is S$2.00 per dal (1 dal = 10 litres): Duties payable: S$2 x 10 = S$20.

READ MORE: Viettonkin Accounting and Tax Service

These are what you need when you are thinking about importing goods in Singapore. You also have to know the calculation of the duties payable, so you will prepare things before getting into importation, in order to avoid the problems that could slow down the process of importing goods. 

The ease of doing business in Vietnam has increased. According to the World Bank’s ease of doing business 2020 rankings, Vietnam ranked 70th position out of 190 countries. One of the biggest improvements in doing business in Vietnam is the process of tax payment which is now supported by the advancement of information technology. Actually, it is legal for all enterprises to submit taxes when the business takes place in Vietnam. Taxation plays a significant role in funding public expenditures and implementing public programs, therefore the government establishes fiscal policies for both individuals and companies to encourage the legal obligation. This article focuses on handling tax compliances in Vietnam on the business side. 

What are tax compliances?

Tax compliances refer to the awareness of taxpayers on tax-related regulation set by the government. There are two forms of tax compliances consisting of voluntary and enforcement tax compliances. Voluntary taxpayers are those who voluntarily follow the tax obligations without revenue administration’s control meanwhile enforcement tax compliances pay taxes via the management of administration to increase the tax compliances. 

Updated regulation in the COVID-19 situation

According to Grant Thornton Vietnam, the Vietnamese government has amended some policies for taxpayers in the COVID-19 situation. 

Regarding tax finalization deadline, based on Clause 3, Article 10, Circular 156/2013/TT-BTC: “The deadline for submission of annual tax finalization dossiers is the 90th (ninety) day from the last day of the calendar year or financial year.” As a result, taxpayers and companies have to submit the taxation dossiers including incorporate tax, personal income tax, and so on within 90 days from the last day of the fiscal year. 

In terms of deductible expenses for corporate income tax (CIT) calculation, according to Clause 2, Article 4, Circular 96/2015/TT-BTC, to get the approval of CIT reducible expenses, the company should submit and present dossiers of loss or damage in case the authority requires. This dossier includes:

- A statement mentioned the value of damaged assets/ goods presented by the enterprise.

- The above statement must clarify the value of damaged assets/goods; causes of the damage; responsibilities for such damage; categories, quantity, the value of recoverable assets/goods (if any); inventory records of damaged goods certified by the legal representative of the enterprise.

- Compensation claims defended by the insurer (if any).

- Responsibilities of organizations/individuals for the provision of compensation (if any).

In the aspect of tax payment deadline deferral update, these following industries are eligible to delay tax payment:

Regarding the tax inspection and customs inspection schedule in the year of 2020, ministries, departments and agencies are required to urgently review and reduce the administrative burden and costs upon the enterprise. Furthermore, the Ministry of Finance has also requested tax agencies not to organize regular inspections in 2020 so that enterprises have time to solve difficulties on their own.  

Procedures for doing tax compliances

Tax compliances should include corporate income tax, personal income tax, value-added tax, and foreign contractor withholding tax. 

Corporate Income Tax

The standard corporate income tax has been 20% since 1 January 2016. Depending on the project locations and conditions, the CIT rate for enterprises working in exploration and mining of petroleum, gas, and other rare and precious natural resources shall range from 32% to 50%. 

Personal Income Tax

Personal income tax may range from 5% to 35% depending on each employee’s income. The enterprise takes charge of calculating, deducting, and paying the tax on behalf of its employees at the time of salary payment. 

SEE ALSO: Things You Must Know About Personal Income Tax in Vietnam.

Value Added Tax (VAT)

Value Added Tax is imposed on certain goods or services. Usually, the VAT ranges at 10% of the total bill. 

Foreign Contractor Withholding Tax

Foreign Contractor Withholding Tax applies when a domestic enterprise buys certain goods and services from foreign suppliers who are not based in Vietnam. Based on the relevant service or purchase contract, the merchandise is obliged to declare and pay foreign contractor tax on behalf of the sellers at the local office. Plus, the foreign contractor withholding tax comprises of CIT and VAT.

In conclusion, taxation is a part of the contribution to public services or public programs implemented by the government. As a result, all enterprises have legal duties to handle tax compliances. This article introduces you regulations of tax compliances in the situation of COVID-19 and the procedure of doing tax compliances. Viettonkin is always ready to assist you in taxation services with the most accurate and professional consultant.