Personal Finance

Singapore online shopping tax and other fees you should know about

Elle Kasser

31.12.20 (updated more than 1 year ago)

Read time 2 minutes

When you shop online with retailers based abroad, you may need to pay additional fees including (GST), foreign exchange costs and card charges. Learn more about how fees and taxes may be applied when you buy online - and how you could cut the costs of shopping internationally with Wise and the Wise multi-currency borderless account.

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Singapore import tax on online shopping

Singapore’s Goods and Services Tax - GST - is a consumption tax collected by the customs authorities, and is currently set at 7%. GST is charged on the purchase of most goods and services in Singapore, and may also apply when you’re shopping online, depending on the type and value of goods bought.¹

When is GST applied?

GST is payable on many goods and services bought online from Singapore based businesses - but what about international purchases?

Online purchases which are imported by air or post, and which don’t include alcohol or tobacco are exempted from GST if the value falls under SGD400. If the total cost including insurance and shipping charges is over SGD400, GST must be paid.³

It’s good to know that GST is also payable for digital services, such as downloading music or website hosting.⁴

Who collects GST?

GST will be collected by the seller if you’re buying online from a business based in Singapore. However, if you’re having overseas products sent to you by mail or a courier, you may need to pay GST directly to the customs authorities. This can be done in various ways depending on how you’re receiving your package, including paying upon collection from the Singapore Post Centre, or signing up for the Singapore Post GIRO scheme.⁵

Foreign exchange fee

GST isn’t the only charge you’ll need to pay when shopping online with international retailers. You may also pay a foreign exchange fee which is collected by the payment platform or card issuer.

Paying online with PayPal, for example, will mean a currency conversion fee of between 3% and 4.5% for most currencies⁶. This charge is added into the exchange rate which is applied when you buy in a currency other than SGD.
Depending on the specific account you hold, you might find you’re better off using your card to make international payments. There’s usually still a foreign exchange fee to pay, but the exchange rate set by major card issuers like Visa and Mastercard normally represents reasonable value for customers. More on credit card transaction fees, coming up.

A smart alternative when shopping online is to get a free Wise multi-currency borderless account and card. You can open your account online and use your linked Mastercard to shop online with no foreign exchange fee. Simply top up your account in SGD and exchange to the currency you need for a low fee, using the mid-market exchange rate.

It’s always free to spend currencies you hold - and the handy auto-convert technology will also make sure you always get the best possible deal no matter which currency you need to spend in.

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Wise for sending money

Credit card transaction fees

One final charge to look out for when spending online in a foreign currency: card fees applied by your bank or card issuer.
These costs will vary depending on which network your card uses, and the specific terms and conditions of the card. Charges of around 3% are typical. DBS cards - to give an example - have a conversion factor fee applied by the card network, plus an admin fee which goes to the bank itself. The costs vary but will not exceed 3.25%.⁷

You’ll be able to find the card transaction fees listed in the terms and conditions for your specific card - they may be described as a foreign transaction fee, administrative charge or currency conversion fee.

Learn more about the best credit cards for overseas spending in Singapore here.

Online shopping allows us to connect easily with retailers around the world - but international ecommerce can come with extra fees. Check out the specifics for your purchase before you proceed to make sure there are no surprises - or get yourself a Wise multi-currency borderless account and card to shop online with your favourite overseas sellers for less.

Sources:

IRAS - Current GST Rates
Singapore Customs - Buying Over The Internet
Singapore Customs - Importing by Postal or Courier Service
IRAS - Purchasing Digital Services from Overseas Service Providers
Singapore Customs - How to Make GST and Duty Payment
PayPal - User Agreement
DBS - Card rates and fees

All sources checked on 27 December 2020

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.