The Major Exporter Scheme is among the schemes governed by the Inland Revenue Authority of Singapore (IRAS).
WHAT EXACTLY IS THE ‘MAJOR EXPORTER SCHEME’ IN SINGAPORE?
- The Major Exporter Scheme, also known as MES, is a scheme where the payment of GST is suspended at the point of importation of products.
- MES businesses would be able to import non-dutiable items without paying GST to Singapore Customs (SC).
- Regulation 45 of the Goods & Services Tax (General) Regulations serves as a way to suspend payment by GST-registered individuals who qualify for the MES of GST on the importation of non-dutiable products.
WHAT IS THE PURPOSE OF THE MAJOR EXPORTER SCHEME?
The Major Exporter Scheme (MES) is intended to help enterprises that import and export items on a regular basis. Usually, businesses must pay GST upfront on imports and then get a refund from the Inland Revenue Authority of Singapore (IRAS) after submitting their GST reports.
This might cause cash flow issues for businesses that export a significant amount of products because no GST is received from zero-rated supplies to offset their initial cash outflow on imports.
Businesses that have been granted the MES can import non-dutiable items with GST suspended. Since July 1, 2006, such businesses have also benefited from GST suspension on products removed from a Zero GST warehouse.
Check our detailed guide for Singapore GST Registration.
HOW DOES THE MAJOR EXPORTER SCHEME WORK?
The MES works when products are imported under the following scenarios.
- Import your own products for the purpose of expanding your business.
- Import products related to your overseas principal for sale in Singapore or re-export on behalf of the overseas principal in the course or advancement of the business.
- Import products related to your overseas principal that will be re-exported.
- Beginning January 1, 2015, re-import products belonging to your local client or a GST-registered overseas client that you previously shipped abroad for value-added activities if the conditions under section 33B of the GST: ‘Claiming GST on re-import of value-added goods’ are met.
For points (b) and (c), you will need to ensure that: –
- Your overseas principal is not GST-registered.
- You keep separate records for products belonging to the overseas principal.
- You have custody and possession of the goods owned by the overseas principals at all times.
- You treat any subsequent supply of goods to be made by you
- When selling domestically, you should standardize the supply
- You can zero-rate the supply if you export the products and keep the necessary export documentation.
WHAT ARE THE QUALIFYING CONDITIONS FOR THE SINGAPORE MAJOR EXPORTER SCHEME?
The key conditions for a business to be eligible for the major exporter scheme are as follows.
- The business is GST-registered.
- The business is both active and financially stable
- The business is importing or intends to import products for commercial purposes, such as for resale.
- Its zero-rated supply must have a value of either: –
- More than 50% of its total supplies
- More than S$10m in the previous year
- The business maintains proper financial records and good internal controls.
- The business has a strong compliance record with the Inland Revenue Authority of Singapore (IRAS) and Singapore Customs.
HOW DO I APPLY FOR THE SG MAJOR EXPORTER SCHEME?
- File an Application form GST F10: Application for Major Exporter Scheme
- Do any of the following: –
- Conduct a self-review using the Assisted Self-Help Kit (ASK) and submit the declaration form ‘ASK: Declaration form on Completing Annual Review and Voluntary Disclosure of Errors’, or
- Commit to participating in the Assisted Compliance Assurance Programme (ACAP), or
- Conduct a Post ACAP Review (PAR) and submit the ‘PAR Declaration’ form (GST F28) for business with a valid ACAP.
If you require further advice on Major Exporter Scheme (MES) in Singapore, contact us at email@example.com to talk to our consultants.
HOW DO I RENEW THE MAJOR EXPORTER SCHEME STATUS?
The following are the general steps for renewing the MES status: –
- Obtain the Renewal Invitation Letter
When your MES comes up for renewal, and you continue to meet the qualifying parameters, you will get a letter inviting you to apply.
- Submit Form R1 along with a Certified ASK.
You must submit Form R1 online via myTax Portal, together with the certified ASK, before the due date specified in the renewal notice.
- Wait for written approval
The review’s conclusion will be communicated to you in writing by IRAS. Your MES will be valid pending the outcome.
- Submission of Letter of Guarantee
The necessity of a letter of guarantee will be evaluated throughout the renewal process.
If a letter of guarantee is necessary, you will be notified.
My company is not governed by the MES. Can it import items using my MES status?
No, you may only utilise your MES status for products held by you or your overseas principal. Importing goods using another company’s MES status is illegal for a non-MES company. Penalties will be applied, and your MES status may be terminated.
I have sent a letter of guarantee to IRAS in order to apply for/renew my MES, but it has expired. Is it necessary for me to submit a new letter of guarantee?
No, when your letter of guarantee expires, it is essentially null and void. As a result, the Comptroller neither returns nor issues a letter of release.
How long is the validity period for the MES renewal?
To minimize business compliance expenses, the validity term for successful MES renewal has been increased from three to five years. This change applies to all businesses that renewed their MES since January 2013 and submitted a certified ASK as part of the renewal application procedure.
Can I appoint declaring agents?
As an authorised MES person, you can authorise up to 20 declaring agents (such as freight forwarders) to clear the items on your behalf. All permits declared by your declaring agents are your responsibility.
Can I utilize my MES status to import investment precious metals (IPM)?
You should not use your MES status to import GST-free items like IPM.
How do I export goods from Singapore?
Exporting goods from Singapore involves a number of steps, including obtaining necessary licenses and permits, selecting a mode of transportation, and complying with customs regulations. Here is a general overview of the process:
Obtain necessary licenses and permits: Depending on the nature of your goods, you may need to obtain licenses or permits from relevant authorities. For example, you may need a permit from the Agri-Food & Veterinary Authority of Singapore to export certain food items.
Select a mode of transportation: Singapore has a well-developed transportation infrastructure, so you have several options for shipping your goods. You may choose to transport your goods by air, sea, or land.
Comply with customs regulations: You will need to comply with customs regulations when exporting goods from Singapore. This includes declaring your goods and providing necessary documents such as commercial invoices, packing lists, and bills of lading.
Arrange for shipping and delivery: Once your goods have been cleared by customs, you can arrange for them to be shipped to their destination. This may involve working with a freight forwarder or shipping company.
Receive payment: You will need to arrange for payment from the buyer. This may involve using a payment service or working with a bank.
It is important to note that the specific requirements for exporting goods from Singapore may vary depending on the nature of the goods, the destination country, and other factors. It is recommended to consult with a logistics or customs expert to ensure compliance with all applicable regulations.
How to import goods to Singapore?
Importing goods to Singapore involves several steps, including obtaining necessary licenses and permits, complying with customs regulations, and arranging for delivery. Here is a general overview of the process:
Obtain necessary licenses and permits: Depending on the nature of your goods, you may need to obtain licenses or permits from relevant authorities. For example, you may need an import license from the Singapore Customs if you are importing controlled or restricted items.
Comply with customs regulations: You will need to comply with customs regulations when importing goods to Singapore. This includes declaring your goods and providing necessary documents such as commercial invoices, packing lists, and bills of lading. You will also need to pay any applicable duties and taxes.
Arrange for shipping and delivery: You can arrange for your goods to be shipped to Singapore using a freight forwarder or shipping company. You will need to provide the necessary documents and information to the shipping company.
Receive your goods: Once your goods have arrived in Singapore, they will be cleared by customs. You can arrange for your goods to be delivered to your designated location, which may involve working with a logistics company.
It is important to note that the specific requirements for importing goods to Singapore may vary depending on the nature of the goods, the country of origin, and other factors. It is recommended to consult with a logistics or customs expert to ensure compliance with all applicable regulations.
What is the import tax in Singapore?
In Singapore, import taxes are levied on certain goods that are imported into the country. The amount of import tax, also known as customs duty, varies depending on the type of goods being imported and their value.
The Singapore Customs website provides a tariff schedule that outlines the customs duty rates for different categories of goods. The rates can range from 0% to several hundred percent, depending on the nature of the goods. For example, most consumer goods are subject to a customs duty rate of 0%, while alcohol and tobacco products can have duty rates as high as 220%.
It is also important to note that Singapore has free trade agreements with various countries, which can reduce or eliminate customs duties on certain goods imported from those countries. For example, imports from Japan, Australia, and New Zealand are generally exempt from customs duties under the Japan-Singapore Economic Partnership Agreement, the Singapore-Australia Free Trade Agreement, and the Trans-Pacific Partnership Agreement, respectively.
In addition to customs duties, some imported goods may also be subject to Goods and Services Tax (GST) at a rate of 7%. However, there are certain exemptions and reliefs available for GST, such as for goods imported for personal use up to a certain value.
It is recommended to consult with a customs expert or refer to the Singapore Customs website for specific information on the customs duty rates and requirements for importing goods to Singapore.
What is a zero GST warehouse?
A zero GST warehouse in Singapore is a type of warehouse facility that is licensed by the Inland Revenue Authority of Singapore (IRAS) to store non-dutiable goods without the need to pay Goods and Services Tax (GST) upfront.
In general, GST is payable on goods that are imported into Singapore or supplied domestically, and this tax is collected by the government at the point of import or sale.
However, under certain circumstances, such as when goods are stored in a zero GST warehouse, GST can be deferred until the goods are released into local circulation or exported.
To use a zero GST warehouse in Singapore, the owner of the goods must first obtain a zero GST warehouse license from the IRAS. The warehouse operator must also meet certain requirements, such as maintaining adequate records and implementing appropriate security measures.
Some of the benefits of using a zero GST warehouse in Singapore include:
- Cash flow savings: GST does not have to be paid upfront, which can improve cash flow for businesses that import or store goods in Singapore.
- Flexible storage options: Zero GST warehouses can offer flexible storage options, such as short-term or long-term storage, depending on the needs of the business.
- Export facilitation: Goods stored in a zero GST warehouse can be exported without paying GST, which can help facilitate cross-border trade.
It is important to note that certain goods, such as dutiable or controlled items, may not be eligible for zero GST treatment in Singapore. It is recommended to consult with a customs or logistics expert to understand the specific requirements and regulations for using a zero GST warehouse in Singapore.