Zero-rating for exports and international services
s 21
21.—(1) Subject to this section and sections 21A, 21B and 21C, a supply of goods is zero‑rated only if the goods are exported and a supply of services is zero‑rated only if the services are international services.[28/2007; 19/2012] (2) Where a taxable person supplies goods or services and the supply is zero‑rated, then, whether or not tax would be chargeable on the supply apart from this section —(a) no tax is charged on the supply; but (b) it is in all other respects treated as a taxable supply, and accordingly the rate at which tax is treated as charged on the supply is nil. (3) A supply of services is treated as a supply of international services where the services or the supply are for the time being of any of the following descriptions:(a) services (not being ancillary transport activities such as loading, unloading and handling) comprising the transport of passengers or goods —(i) in the case of transport by air or land, where the transportation is —(A) from a place outside Singapore to another place outside Singapore; (B) from a place in Singapore to a place outside Singapore; or (C) from a place outside Singapore to a place in Singapore; and (ii) in the case of transport by sea, where the transportation is —(A) from a place outside Singapore to another place outside Singapore; or (B) from a place in Singapore or to a place in Singapore, and substantially outside Singapore; (iii) [Deleted by Act 20 of 2010] (b) services (including any ancillary transport activities such as loading, unloading and handling) comprising the transport of goods from a place in Singapore to another place in Singapore to the extent that those services are supplied by the same supplier as part of the supply of services to which paragraph (a)(i) and (ii) (other than in relation to any transportation that is from a place outside Singapore to another place outside Singapore) applies; (c) services (other than the letting on hire of any means of transport) —(i) supplied before 1 January 2023, and comprising the insuring or the arranging of the insurance or the arranging of the transport of passengers or goods to which any provision of paragraphs (a) and (b) applies; or (ii) supplied on or after 1 January 2023, and comprising —(A) the insuring of the transport of passengers to whom any provision of paragraph (a) applies; or (B) the insuring or the arranging of the insurance or the arranging of the transport of goods, to which any provision of paragraphs (a) and (b) applies;[Act 35 of 2022 wef 01/01/2023] (d) the letting on hire of any means of transport for use in a place outside Singapore throughout the period of the hiring which —(i) are exported by the lessor to such a place; or (ii) are in such a place at the time of the supply; (e) subject to subsections (4B) and (4E), services supplied directly in connection with land or any improvement thereto situated outside Singapore;[Act 35 of 2022 wef 01/01/2023] (f) subject to subsection (4B), services supplied directly in connection with goods situated outside Singapore when the services are performed; (g) subject to subsection (4B), services supplied directly in connection with goods for export outside Singapore and supplied to a person who belongs in a country other than Singapore, at the time the services are performed; (h) prescribed financial services supplied in connection with goods —(i) for export outside Singapore; or (ii) the supply of which involves the removal of the goods from a place outside Singapore to another place outside Singapore; (i) services of any of the following descriptions which are performed wholly outside Singapore:(i) cultural, artistic, sporting, educational or entertainment services; (ii) exhibition or convention services; (iii) services ancillary to the services in sub-paragraph (i) or (ii), including that of organising the performance of those services outside Singapore, except where, at the time of the performance of those services, there is no necessary connection between — (iv) the place where the services are physically performed; and (v) the location of the customer of the services (as defined in paragraph 2 of the Seventh Schedule);[Act 34 of 2021 wef 01/01/2023] (j) subject to subsections (4B) and (4C), services supplied —(i) under a contract with a person who belongs in a country outside Singapore; and (ii) which directly benefit —(A) a person who belongs in a country other than Singapore and who is outside Singapore at the time the services are performed; or (B) a registered person who belongs in Singapore; (k) prescribed services supplied —(i) under a contract with a person wholly in the person’s business capacity (and not in the person’s private or personal capacity) and who in that capacity belongs in a country outside Singapore; and (ii) which directly benefit —(A) a person wholly in the person’s business capacity (and not in the person’s private or personal capacity) and who in that capacity belongs in a country other than Singapore; or (B) a registered person who belongs in Singapore; (l) prescribed services in connection with —(i) the handling of ships or aircraft; or (ii) the handling or storage of goods carried in any ship or aircraft; (m) pilotage, salvage or towage services performed in relation to ships or aircraft; (n) services comprising the surveying of any ship or aircraft or the classification of any ship or aircraft for the purposes of any register; (o) the supply (including the letting on hire) of any ship or aircraft; (p) prescribed services comprising the repair, maintenance, broking or management of any ship or aircraft; (q) prescribed services comprising the provision of any means of telecommunication transmitted —(i) from a place outside Singapore to another place outside Singapore; (ii) from a place in Singapore to a place outside Singapore; or (iii) from a place outside Singapore to a place in Singapore; (r) services supplied in relation to a trust, where the services and the person supplying the services satisfy such conditions as may be prescribed; (s) services supplied —(i) under a contract with a person who belongs in a country outside Singapore; and (ii) which directly benefit —(A) a person who belongs in a country other than Singapore; or (B) a registered person who belongs in Singapore, relating to the co-location in Singapore of computer server equipment belonging to the person referred to in sub‑paragraph (i) or (ii); (t) prescribed services in connection with the provision of an electronic system relating to the import of goods into or the export of goods out of Singapore; (u) subject to subsection (4D), services supplied before 1 January 2022 comprising either of or both —(i) the supply of a right to promulgate an advertisement by means of any medium of communication; and (ii) the promulgation of an advertisement by means of any medium of communication, where the Comptroller is satisfied that the advertisement is intended to be substantially promulgated outside Singapore; [Act 34 of 2021 wef 01/01/2022] (v) the supply (including the letting on hire) of any air container or sea container, which is used or to be used for the international transportation of goods and which complies with such other requirements as may be prescribed; (w) prescribed services comprising the repair, maintenance or management of any air container or sea container, which is used or to be used for the international transportation of goods and which complies with such other requirements as may be prescribed; (x) the supply (including the letting or hire) of qualifying aircraft parts that are certified as airworthy by —(i) in relation to an aircraft that is not a military aircraft, a person certificated by a national civil aviation authority; and (ii) in relation to a military aircraft, the government owning that aircraft; or (y) prescribed services supplied directly in connection with prescribed goods —(i) under a contract with a person who belongs in a country outside Singapore; and (ii) which directly benefit —(A) a person who belongs in a country other than Singapore; or (B) a registered person who belongs in Singapore, if, at the time the prescribed services are performed, the prescribed goods are — (iii) at an approved warehouse; or (iv) at any place from which they may not be removed except with the permission of the proper officer of customs (and by virtue of which the prescribed goods remain under customs control), if —(A) the goods have been brought to that place from an approved warehouse for the purpose of the repair of, maintenance of or performance of any other similar service on the goods, or for the purpose of an auction, an exhibition or any other similar event involving the display of goods; and (B) the goods will be returned to any approved warehouse after the activity or event mentioned in sub‑paragraph (A).[38/2005; 28/2007; 33/2008; 19/2009; 20/2010; 24/2011; 19/2012; 52/2018] (4) For the purposes of subsections (3), (6), (6AA), (6A) and (6B) —(a) “aircraft” means any aircraft —(i) that is wholly used or intended to be wholly used for travel —(A) from a place outside Singapore to another place outside Singapore; (B) from a place in Singapore to a place outside Singapore; or (C) from a place outside Singapore to a place in Singapore; or (ii) that is a military aircraft; “approved warehouse” means a warehouse or other premises approved by the Comptroller as an approved warehouse; “co-location”, in relation to computer server equipment, means the provision of a physical environment for the operation of the computer server equipment; “non-international aircraft” means any aircraft —(i) that is not wholly used or intended to be wholly used for travel —(A) from a place outside Singapore to another place outside Singapore; (B) from a place in Singapore to a place outside Singapore; or (C) from a place outside Singapore to a place in Singapore; and (ii) that is not a military aircraft; “qualifying aircraft parts” means such parts and equipment as are designed and built for exclusive use on an aircraft; “ship” means any ship (including an oil rig) but does not include any ship —(i) that is licensed under the Maritime and Port Authority of Singapore Act 1996 as a passenger harbour craft or pleasure craft; (ii) in respect of which a vessel permit has been granted by the Public Utilities Board under regulations made under the Public Utilities Act 2001; or (iii) that is designed or adapted for use for recreation or pleasure and is so used within Singapore (unless the use within Singapore is for such purpose that is incidental to its use outside Singapore as the Comptroller may allow); (b) the services in subsection (3)(e) include —(i) services in the course of the construction, alteration, repair, maintenance or demolition of any building or any civil engineering work; and (ii) services such as are supplied by estate agents and auctioneers, architects, surveyors, engineers and others involved in matters relating to land; and (c) the supply in subsection (3)(o) of a ship or an aircraft (as the case may be) includes the supply of services under a charter of that ship or aircraft except where the services supplied under such a charter consist of any of the following:(i) transport of passengers; (ii) accommodation; (iii) entertainment; (iv) catering of food or beverage; (v) education, being services performed substantially in Singapore. [19/2009; 20/2010; 24/2011; 1/2016] (4A) For the purposes of subsection (3)(j), (k), (s) and (y), the person with whom the contract is made and the person who directly benefits from the services may be the same person or different persons.[19/2012] (4AA) The services mentioned in subsection (3)(a), (b) and (c) do not include any services comprising the transport by a taxable person who is a redeliverer (as defined in paragraph 1(1) of the Seventh Schedule) of goods comprised in a Seventh Schedule supply, the insuring or the arranging of the insurance of the goods, or the arranging of the transport of the goods by that taxable person.[Act 34 of 2021 wef 01/01/2023] (4B) The services referred to in —(a) subsection (3)(e), (f) and (g); and (b) subsection (3)(j), if supplied before 1 January 2022, do not include any services comprising either or both of the following: (c) the supply of a right to promulgate an advertisement by means of any medium of communication; (d) the promulgation of an advertisement by means of any medium of communication.[Act 34 of 2021 wef 01/01/2022] (4C) The services referred to in subsection (3)(j) do not include any services which are supplied directly in connection with —(a) land or any improvement thereto situated inside Singapore; or (b) goods situated inside Singapore at the time the services are performed, other than goods referred to in subsection (3)(g).[28/2007] (4D) The services referred to in subsection (3)(u) do not include any services comprising only of the promulgation of an advertisement by means of the transmission, emission or reception of signs, signals, writing, images, sounds or intelligence by any nature of wire, radio, optical or other electromagnetic systems whether or not such signs, signals, writing, images, sounds or intelligence have been subjected to rearrangement, computation or other processes by any means in the course of their transmission, emission or reception.[28/2007] (4E) The services referred to in subsection (3)(e) do not include any services comprising arranging or facilitating the booking of accommodation, if supplied on or after 1 January 2023.[Act 35 of 2022 wef 01/01/2023] (5) Where a description referred to in subsection (3) or (6AA)(a) is a transaction which would not otherwise be a supply of services, the transaction is, for the purposes of this Act, treated as a supply of services in Singapore.[1/2016] (6) A supply of goods is zero-rated where the Comptroller is satisfied that the person supplying the goods —(a) has exported them; or (b) has shipped them —(i) for use as stores or fuel on an aircraft; or (ii) for use as merchandise for sale by retail to persons carried on an aircraft, and in either case, if such other conditions or restrictions (if any) as may be prescribed by the Minister in regulations or as the Comptroller may impose are fulfilled. [20/2010; 1/2016] (6AA) Subject to subsection (6AB) —(a) a supply of prescribed services is treated as a supply of international services to the extent that the supply is specifically attributable to any particular flight by a non‑international aircraft that is —(i) from a place outside Singapore to another place outside Singapore; (ii) from a place in Singapore to a place outside Singapore; or (iii) from a place outside Singapore to a place in Singapore; and (b) a supply of goods is zero-rated to the extent that the supply comprises goods which, to the Comptroller’s satisfaction, are shipped —(i) for use as stores or fuel on any flight by a non‑international aircraft referred to in paragraph (a); or (ii) for use as merchandise for sale by retail to persons carried on any flight by a non‑international aircraft referred to in paragraph (a).[1/2016] (6AB) Subsection (6AA) only applies if such other conditions or restrictions (if any) as may be prescribed by the Minister or as the Comptroller may impose are fulfilled.[1/2016] (6A) Subject to subsection (6B), a sale or letting on hire of goods is zero‑rated where the Comptroller is satisfied that the goods are —(a) for use as stores or fuel on a ship; (b) for installation on a ship or a ship under construction; (c) for use in the maintenance or operation of a ship; or (d) for use as merchandise for sale by retail to persons carried on a ship, and, in any of those cases, if such other conditions or restrictions (if any) as may be prescribed by the Minister in regulations or as the Comptroller may impose are fulfilled. [20/2010; 31/2014; 1/2016] (6B) Where there is a sale or letting on hire of goods referred to in subsection (6A) in relation to any ship which is designed or adapted for use for recreation or pleasure, the supply is zero‑rated under that subsection only if the Comptroller is satisfied that the goods are used outside of Singapore.[20/2010; 31/2014] (7) The Minister may by regulations provide for the zero‑rating of supplies of goods, or of such goods as may be specified in the regulations, in cases where the Comptroller is satisfied that the goods have been or are to be exported and such other conditions (if any) as may be specified in the regulations or as the Comptroller may impose are fulfilled. (7A) The Minister may by regulations provide for the following:(a) for matters relating to the grant of approval by the Comptroller for a warehouse or other premises to be an approved warehouse; (b) where such approval is subject to any condition or requirement and the person to whom the approval is granted fails to comply with any such condition or requirement, for matters relating to the payment to the Comptroller without demand by that person of the tax that would, but for subsection (3)(y) or section 21C, be chargeable on the supplies that are referred to therein (whether made by that person or any other person) and that take place during such period as may be prescribed, commencing on or after the date of the failure.[24/2011] (7B) [Deleted by Act 19 of 2012] (8) Where the supply of any goods has been zero-rated under subsection (6), (6AA)(b) or (6A) or regulations made under subsection (7) and —(a) the goods are found in Singapore after the date on which they were alleged to have been or were to be exported or shipped; or (b) any condition specified in the regulations made under subsection (6), (6AB), (6A) or (7) or imposed by the Comptroller is not complied with, and the presence of the goods in Singapore after that date or the failure to comply with the condition has not been authorised for the purposes of this subsection by the Comptroller, the tax that would have been chargeable on the supply but for the zero‑rating becomes payable immediately by the person to whom the goods were supplied or by any person in whose possession the goods are found in Singapore and the goods are liable to seizure. [20/2010; 1/2016] (9) The Comptroller may, if he or she thinks fit, waive payment of the whole or part of the tax payable under subsection (8). (10) [Deleted by Act 34 of 2021 wef 01/01/2022]