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Country Commercial Guides for FY 2000: SingaporeReport prepared by U.S. Embassy Singapore, released July 1999
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Chapter VI. TRADE REGULATIONS, CUSTOMS AND STANDARDSTrade Barriers
Singapore has very few trade barriers. There are restrictions in a few sectors, including legal services, banking services, some telecommunications services, professional engineering services and trade in tobacco products. However, the Government is slowly allowing more freedom for market forces in the economy, as can be seen in its move to liberalize the telecommunications, financial and legal services industries. In the area of intellectual property rights, the Singapore Government does have laws to protect against piracy and copyright infringement, but it relies on the private sector to take the lead against transgressors. In general, Singapore maintains one of the most liberal trading regimes in the world.Customs Regulations
In Singapore, valuation for Customs purposes is based on the Brussels Definition of Value (BDV). The basic principle of the BDV is that dutiable value is the normal price or import price of goods at the port or place of importation. It pre-supposes that the sale has taken place in the open market between an independent buyer and seller.Where goods are dutiable, ad valorem or specific rates may be applied. An ad valorem rate, which is the most commonly applied, is a percentage of the assessed value of the imported goods. A specific rate is a particular amount per unit of weight or other quantity.
Cost, insurance, freight, handling charges and all other charges incidental to the sale and delivery of the goods are taken into account when duty is assessed.
Exporters are required to ensure that the declared values of goods for Customs purposes are correct. If the goods have been undervalued, the Customs and Excise Department will increase the values declared. Severe penalties may be imposed on traders attempting to evade duty.
Tariff Rates
Singapore is generally a free port and an open economy. More than 96 percent of all imports into Singapore enter the country duty-free. The only exceptions are heavy tariffs on the import of motor-cars, liquor, petrol, and cigarettes.Import Taxes
The Singapore Goods and Services Tax (GST) is a tax on domestic consumption within Singapore. It is paid whenever customers buy goods or services from GST-registered businesses within Singapore. The rate is charged at 3.0 percent. The GST Act says, "...Goods and Services Tax shall be charged on the supply of goods and services in Singapore...and on the importation of goods and services...to Singapore".GST is a multi-stage tax and is collected at every stage of the production and distribution chain. A registered trader/company will be able to claim credits from the Comptroller for GST paid on goods or services imported and used within the production chain.
All imported goods (whether for domestic sale or re-exports), are taxable unless the goods are specifically given GST relief by the Comptroller of GST (A list of GST reliefs is available from the Inland Revenue Authority of Singapore). If the goods are kept in the Free Trade Zones (Changi Airport and the seaports of Pasir Panjang, Keppel, Jurong and Sembawang) they are not treated as imports; GST is not charged until the goods leave the Free Trade Zones (FTZ) for sale in Singapore (re-exported goods from the FTZ are exempt from all GST).
Outside the FTZ, when goods are imported, GST (Input Tax) must be paid to the Customs and Excise Department at the point of importation, irrespective of whether the importer is a trader or a final consumer. At the point of importation, GST is charged, on the landed CIF (Cost of Insurance and Freight) value inclusive of actual duty (if dutiable and as assessed by Customs). For example:
CIF value of imports = S$80
Actual customs duty = S$20
Value of imports = S$100
GST (Input Tax) payable = S$100 x 3 percent = S$3.00Company A, which is importing the goods, must pay $3.00 (Input Tax) at the point of importation to the Customs and Excise Department. When Company A sells the imports to Company B, assuming at the price of S$200, Company B has to pay GST of $6.00 (Output Tax) to Company A. The Singapore government must ultimately receive GST payment of $6.00. In view of the fact that Company A has already paid GST of $3.00 to the government, The total net GST payable (by company A) is calculated as follows:
Output Tax ($6.00) - Input Tax Credit ($3.00) =
$3.00 (Net GST payable by Company A)When a Singapore company/agent imports goods on behalf of an overseas non-taxable person who does not have any business establishment in Singapore, the Singapore company will be treated as the principal importing the goods, irrespective of whether the Singapore company calls itself an agent or not. The Singapore company must pay GST Input Tax to Customs and Excise Department.
Assuming that the non-resident person is liable for GST because of an agent agreement with the Singapore company/agent importing on behalf of a non-resident person, it is required to account for GST Input Tax on behalf of that non-resident. A liable non-resident person is defined as having a business turnover of more than S$1.0 million and not physically operating in Singapore but conducts trading activities through a Singapore agent. Turnover of less than S$1.0 million will mean that the agent is liable for payment of the GST Input Tax. The agent must register in the name of the non-resident exporter whose turnover exceeds S$1.0 million. Separate accounts must be kept for the taxable non-resident.
For more information on GST-related topics pertaining to U.S. exporters, please contact the following:
Inland Revenue Authority of Singapore
55 Newton Road Revenue House
Singapore 307987
Tel: 65/356-8233
Fax: 65/351-3553
Contact: Mr. Koh Soo How, Manager Tax Audit
Website: www.iras.gov.sg/info/gst/gst.html
Customs and Excise Department
55, Newton Road
#07-01 Revenue House
Singapore 307987
Tel: 65/272-8222
Fax: 65/250-8663
Contact: Mr. Loh Yew Meng, Deputy Head, (Permits, Manifest & GST), Documentation BranchImport License Requirements
Companies must make an inward declaration for all goods imported into Singapore. Most goods can be imported freely without licenses. The import of a few items such as lighters in the shape of pistols or revolvers and fire crackers is prohibited. Generally, the import of goods which the government says pose a threat to health, security, safety and social decency are controlled. Licenses are required for pharmaceuticals, hazardous chemicals, films, arms and ammunition. Companies that want to import controlled items into Singapore must apply for licenses from the appropriate government agencies.Temporary Goods Entry Requirements
For goods entering Singapore on a temporary basis, companies can apply for an ATA Carnet with the Singapore International Chamber of Commerce. The ATA Carnet serves as a guarantee against payment of import duties/taxes should the temporary admission period be exceeded. Goods imported under a carnet may not be sold and must be re-exported within the temporary admission period. If the items to be imported are subject to controls, companies must obtain endorsement/approvals from the relevant Government agencies before importing the goods into Singapore.Bona fide trade samples may be imported without payment of duty if they are imported solely:
(A) for the purpose of soliciting orders for goods to be supplied from abroad; or
(B) for demonstration in Singapore to enable manufacturers in Singapore to produce such articles to fulfil orders from abroad; or
(C) by a manufacturer for the purpose of copying, testing or experimenting before he produces such articles in Singapore.Special Import/Export Requirements And Certification (Health, Pharmaceuticals, Pre-Shipment Inspection)
Health Supplements Import Regulations
Vitamins with very high dosages of certain nutrients need to be licensed or registered. However, most over-the-counter vitamins and food supplements do not need to be licensed. If a U.S. company has any concerns regarding licensing of its products, these can be addressed by contacting or requesting its potential distributor to submit samples to the Ministry of Health.There is also labeling and advertising legislation which applies to vitamins and supplements. Generally, labeling laws require that: 1) the composition of the porducts be disclosed in English; 2) labels/packaging materials do not contain any reference to diseases/conditions as specified in the schedule to the Medicines (Advertisement & Sale) Act; and 3) the advertising/sales promotion of the product in the public media be approved by the Pharmaceutical Department of the Ministry of Health.
The Regulations which govern the sale of vitamins and food supplements in Singapore include:
- The Medicines Act, - The Medicines (Advertisement & Sales) Act, - The Medicines (medical Advertisements) regulations, - The Sale of Drugs Act and Regulations, - The Medicines (Labeling) regulations 1986, and - The Medicines (Non-medicinal Products) Order 1988The sale of Vitamin B15 (Pangamic Acid) and Vitamin B17 (Amygdalin) is prohibited under the Sale of Drugs (Prohibited Drugs) Regulations 1985.
Pharmaceuticals Imports Regulations
Prescription drugs and over-the-counter drugs must be registered and approved by the Pharmaceutical Department (Ministry of Health).Labeling Requirements
Labels are required on imported food, drugs, liquors, paints and solvents and must specify the country of origin. Repackaged foods must be labelled to show (in English) the appropriate designation of the food content printed in capital letters at least 1/16 inch high; whether foods are compounded, mixed or blended; the minimum quantity stated in metric net weight or measure; the name and address of the manufacturer or seller; and the country of origin.A description (in English) of the contents of the package may be added to the face of the label provided the additional language is not contrary to, or a modification of, any statement on the label. Pictorial illustrations must not mislead about the true nature or origin of the food. Foods having defined standards must be labelled to conform to those standards and be free from added foreign substances. Packages of food described as "enriched", "fortified", "vitaminized" or in any other way which implies that the article contains added vitamins or minerals must show the quantity of vitamins or minerals added per metric unit.
Special labels are required for certain foods, medicines and goods such as edible and non-edible animal fats as well as paints and solvents. Processed foods and pharmaceuticals must be inspected and approved by the Ministry of Health. Electrical goods must be checked by Singapore Power before they can be installed, while paints and solvents are the responsibility of the Chief Inspector of Factories, Ministry of Manpower.
Prohibited Imports
Singapore prohibits the import of chewing gum, firecrackers, horns, sirens, silencers, and satellite dishes and receivers. A full list of prohibited products can be obtained from the Trade Development Board.Warranty And Non-Warranty Repairs
Dutiable goods are allowed to be imported for repair without payment of duty on condition that they are re-exported within three months of the date of importation. If the goods are not re-exported after the expiration of the given period, duty will become payable. This facility provision is also extended to dutiable goods which are imported for trade exhibitions, fashion shows and displays.Export Controls
Companies must make an outward declaration to export or re-export their goods out of Singapore. Except for selected items, there are very few controls on exports of goods from Singapore. Quantitative restrictions exist for certain textiles and garments to Canada, EU countries and the U.S. Items such as rubber, timber, granite and chlorofluorocarbons are subject to export control and licensing. Items under export control must be endorsed or licensed by the appropriate government agencies before they can be exported.Standards
Singapore uses the metric system. While industrial standards applied in the engineering and construction fields are basically those used by other developed countries, the Productivity and Standards Board (PSB) has developed standards for certain electrical, sanitary and building products. PSB is the national standards and certification authority.PSB also administers the Good Manufacturing Practice Scheme and the PSB Certification Mark Scheme. They are awarded to manufacturers whose quality assurance systems and products comply with the ISO 9000 series of quality systems or the relevant Singapore standards.
Under the Consumer Protection (Safety Requirements) Regulations of 1991, 17 products (LPG systems, cooking ranges, electric irons, gas cookers, hair dryers, microwave ovens, televisions, video display units, video cassette recorders, table fans, high-fidelity equipment, immersion water heaters, kettles, refrigerators, rice cookers, room air-conditioners, vacuum cleaners and washing machines) which are potentially hazardous to consumers must be registered and declared safe before they can be sold in Singapore. The Consumer Protection Act (CPA) mark is a compulsory stamp of approval given by PSB to ensure that consumers are safe from hazards such as fire, explosion and electrical shock when using these appliances. However, test reports issued by accredited testing laboratories and national certification bodies are recognised by PSB. A list of accredited laboratories and national certification bodies is available from PSB. U.S. suppliers of these products planning to expand sales into Singapore should check with the Consumer Protection Agency and PSB before exporting.
Similarly, telecommunications equipment imported for use in Singapore is subject to "Type-Approval" by the Telecommunication Authority of Singapore.
For the construction industry, the Building and Construction Authority uses the Construction Quality Assessment System (CONQUAS) to objectively rate building works. The system examines the contractor's work in three areas: structural (40 points), architectural (50 points) and external works (10 points) based on a 100-point score. The system measures the extent to which a building conforms with the contract specifications. Contractors with high CONQUAS scores are given preferential margins when they tender for public contracts.
Free Trade Zones/Warehouses
Singapore has seven Free Trade Zones (FTZ), six for seaborne cargo and one for air cargo (Singapore Changi Airport), within which a wide range of facilities and services are provided for storage and re-export of dutiable and controlled goods. Goods can be stored within the zones without any customs documentation until they are released in the market. They can also be processed and re-exported with minimum customs formalities.The FTZ's at the port facilitate entrˇpot trade and promote the handling of transhipment cargo. They offer free 72-hour storage for import/export of conventional and containerized cargo and 14-day free storage for transhipment/re-export cargo.
Within the FTZ, PSA Corporation Limited provides more than two million square meters of covered and open storage space. Outside the FTZ, PSA has 473,000 square meters of covered warehouse space. The PSA operates the Pasir Panjang Distripark, Alexandra Distripark and Keppel Distripark.
Membership in Free Trade Arrangements
Singapore is a party to the World Trade Organization (WTO). Since January 1993, Singapore has participated in the ASEAN Common Effective Preferential Tariff (CEPT) program for the ASEAN Free Trade Area (AFTA). The program involves the application of preferential tariffs to goods of ASEAN origin as defined under the Rules of Origin for CEPT. Under the rules, a product is of ASEAN origin if it is wholly produced or obtained in an ASEAN country. The product can also be deemed to originate from ASEAN Member States if at least 40 percent of its content originates from any member states. The 40 percent local content requirement refers to both single country and cumulative ASEAN content.Customs Contact Information
Customs and Excise Department 55, Newton Road #07-01 Revenue House Singapore 307987 Tel: 65/272-8222 Fax: 65/250-8663 Contact: Mr. Loh Yew Meng, Deputy Head, (Permits, Manifest & GST), Documentation Branch
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[end of document] Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
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