Goods and Services Tax (GST) Rate Change

According to the 2022 Singapore Budget announcement, the GST rate will increase in two phases:

• From 7% to 8% starting January 1, 2023; and
• From 8% to 9% starting January 1, 2024.

The applicable GST rate will be the prevailing rate during the time of supply¹. The time of supply is defined as the earlier of when an invoice is issued or when a payment is received².

Guidelines for transitioning during a change in rates:

A transaction extends across a GST rate change if any of the following events occur on or after the date of the rate changes:

• the issuance of an invoice;
• the receipt of payment;
• the delivery of goods or performance of services (in context of insurance, this is referred to as the period of insurance coverage).

When making a payment for your policy, kindly take note that:

• For policies incepted/renewed on or after 1 January 2024, 9% GST will be imposed. However, if full payment is received before 1 January 2024, 8% GST will be applied.
• For policies incepted/renewed in 2023 and crosses over 1 January 2024,
  If full payment is received before 1 January 2024, 8% GST will be applied.
  If full payment is received on or after 1 January 2024, 9% GST will be imposed.
• Credit note will be issued for tax invoices issued under 8% GST and a new tax invoice will be issued to reflect the GST rate change to 9%. 

To learn more about the GST changes, you can visit the IRAS e-Tax Guide and FAQ at the following link:  

https://www.iras.gov.sg/taxes/goods-services-tax-(gst)/gst-rate-change/gst-rate-change-for-business/overview-of-gst-rate-change

_{1 The time of supply rules are found in sections 11, 11A, 11B and 11C of the GST Act.
2 For more information on the time of supply rules, please refer to the e-Tax Guide “GST: Time of Supply Rules”.}

What does the GST rate change involve?

As detailed in the 2022 Singapore Budget announcement, the GST rate will increase in two phases:

- from 7% to 8% starting from 1 January 2023; and

- from 8% to 9% starting from 1 January 2024.

The applicable GST rate for your policy may vary depending on the date of premium payment, invoice issuance, or policy inception. Allianz Insurance Singapore Pte. Ltd. retains the authority to charge the GST rate for your premium in accordance with IRAS guidelines. 

When is the deadline for submitting payment for all new or renewed policies to qualify for the 8% GST rate?

To qualify for the 8% GST rate, full payment for your new or renewed policy with Allianz Insurance Singapore Pte. Ltd. must be received by 31 December 2023. Due to system limitations, for partial payments received, a credit note will be issued to cancel the invoice charged at the 8% GST rate and a new tax invoice will be issued at 9% GST rate for the same period..

How will the change in GST rate be implemented for my recurring credit card payments for my policy with Allianz Insurance Singapore Pte. Ltd.?

Following IRAS guidelines, payments made through recurring GIRO or credit card methods in January 2024 will incur an 8% GST if the GIRO deduction or credit card payment is successfully processed by the end of January 2024. Starting from 1 February 2024, premiums will be charged at the 9% GST rate.

All payments received through recurring GIRO deduction and credit card payment (e.g., monthly insurance premium payment) within the month of January 2024 can be treated as payments received before 1 Jan 2024 if the following conditions are met:

1. The GIRO deduction or credit card payment is successfully effected by the end of January 2024;
2. The GIRO deduction or credit card payment relates to bills or invoices that are issued before 1 January 2024; and
3. The bills or invoices in (2.) are issued according to the normal billing cycle of the business.

I have a policy that was issued and fully paid prior to 1 January 2024 at the 8% GST rate. If I request an endorsement to increase the sum insured after 1 January 2024, will the additional premium payable be subject to the 9% GST rate?

Since the endorsement request is submitted on or after 1 January 2024, 9% GST will be applied.

How can I obtain additional details regarding the upcoming GST rate change?

To learn more about the GST changes, please visit the IRAS e-Tax Guide and FAQ at this link:  

https://www.iras.gov.sg/taxes/goods-services-tax-(gst)/gst-rate-change/gst-rate-change-for-business/overview-of-gst-rate-change