Singapore started with trade finance when it was primarily a trading port, and moved through banking services, broking, fund management and now is a recognised location for wealth management. It has a well-established and diversified financial industry, evidenced by its position of being one of the top three financial hubs in the world. The financial services industry is constantly evolving through intensifying competitions and technologically-driven transformations. Its products and services are complex, and transactions can seem conceptual-like. From a tax perspective, financial services are difficult to tax.
To simplify compliance, countries with a Goods and Services Tax (“GST”) or Value Added Tax (“VAT”) system tend to treat all financial services as exempt from tax. This eases compliance for the suppliers of financial services, although it also means that GST incurred directly to make such supplies cannot be recovered. With financial services being a key component of Singapore’s economy, it is a significant contributor to the government’s tax revenue.
As such, it is important to ensure compliance and accuracy.
Guide to GST and the Financial Markets in Singapore is a concise and quick reference guide designed to assist you in understanding the GST treatments and implications of supplies made by financial services providers in Singapore.
