Understanding Reverse Charge and the OVR Regime in Singapore
Updated 2 months ago
/ /
Singapore uses two different mechanisms to collect GST on cross-border digital services — reverse charge for B2B and the OVR regime for B2C. Here is how each works and what it means for your business.
Why does Singapore have two collection mechanisms?
Singapore GST rules recognize that overseas suppliers cannot always be required to register locally. To ensure GST is still collected, Singapore uses:
Reverse charge for B2B transactions — the Singapore business buyer self-assesses and pays the GST.
OVR (Overseas Vendor Registration) for B2C transactions — the overseas seller registers in Singapore and charges GST directly to the consumer.
How does reverse charge work for B2B SaaS?
When an overseas (non-resident) SaaS company sells to a GST-registered Singapore business, the buyer is responsible for accounting for GST — not the seller.
However, reverse charge only applies in certain situations:
Singapore Business Buyer | Reverse Charge Required? |
|---|---|
GST-registered, full input tax credit entitlement | No — the net GST cost would be zero, so IRAS does not require it. |
GST-registered, partial or no input tax credit entitlement (e.g., financial institutions, charities) | Yes — buyer must self-assess 9% GST. |
Not GST-registered (individual or small business) | No — the overseas seller handles it via OVR. |
As the overseas seller under OVR: When a B2B customer provides a valid Singapore GST registration number, you do not charge GST on that sale. The buyer determines on their end whether reverse charge applies.
How does the OVR regime work for B2C SaaS?
Under the OVR simplified pay-only regime, you charge 9% GST on all B2C sales to Singapore consumers (non-GST-registered customers). You collect it, file a quarterly return, and remit it to IRAS.
Key points:
You cannot claim input GST under the simplified OVR regime.
If a customer claims to be a business and provides a GST number, you should not charge GST on that transaction. Maintain records of the GST number provided.
Adjustments for refunds or credit notes are reported in the period the credit note is issued.
What is the time of supply rule?
For reverse-charged B2B transactions, GST is due at the earlier of the date payment is made or the date the invoice is received.
For OVR B2C transactions, GST is generally due at the earlier of the invoice date or the payment date.
Does Kintsugi automate this?
Yes. When your Kintsugi tax engine is enabled for Singapore, the platform automatically determines whether to apply GST on an invoice or leave it to the buyer to handle, based on the customer's GST registration status. No manual calculation is needed.
For the latest IRAS guidance, visit iras.gov.sg.
Need Help?
For further concerns, we're always here to help. If you can't find the answer you're looking for, just reach out to us using the chat in the bottom right corner of your screen.
Was this article helpful?