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Zero GST (ZG) Warehouse Scheme

The Zero GST (ZG) Warehouse Scheme in Singapore allows suspension of GST on imports into approved areas; conditions apply to moving and supplying goods.

Objective

Operating a Zero-GST (ZG) warehouse under our program allows you to bring in non-dutiable foreign goods without incurring GST charges.

What is a Zero-GST Warehouse?

A Zero-GST (ZG) warehouse is a specialized zone sanctioned by Singapore Customs for storing goods from abroad. This zone can encompass an entire facility, a specific section within a facility, a storage tank, or other approved locations.

For a comprehensive understanding of the program and its advantages, please refer to the official webpage of Singapore Customs on the Zero-GST Warehouse Scheme.

Procedures for Importing Goods into a Zero-GST Warehouse

Even though GST is suspended under the Zero-GST Warehouse Scheme, it’s mandatory to report the goods you import into the ZG warehouse. The total value of these imported goods should be stated in Box 5 (Total Value of Taxable Purchases).

Guidelines for Transferring or Distributing Goods from a Zero-GST Warehouse

1. Transferring Goods into Customs Territory  

When you move goods from a ZG warehouse into the customs jurisdiction, you are required to pay GST to Singapore Customs.  

  – Declare the value of the transferred goods in Box 5 (Total Value of Taxable Purchases).  

  – In Box 7 (Input Tax and Refund Claimed), indicate the GST amount you wish to claim.  

  If you are part of the Major Exporter Scheme or Approved Third-Party Logistics (3PL) Company Scheme, you must declare the value of the transferred goods in both Box 5 and Box 9 (Total Value of Goods Imported under MES/Approved 3PL or Other Approved Schemes).  

Since the GST on the transferred goods is suspended, you cannot claim any input tax.

2. Exporting Goods  

When goods are exported from a ZG warehouse, the transaction is zero-rated, provided you have the necessary export documentation as outlined in the GST: Guide on Exports or GST: Guide on Hand-Carried Exports Scheme.  

  – Declare the export value in Box 2 (Total Value of Zero-Rated Supplies).

3. Transferring Goods to Another Zero-GST Warehouse 

If goods are moved from one ZG warehouse to another, no GST is payable to Singapore Customs.

4. Internal Supply within a Zero-GST Warehouse

If goods are distributed within the ZG warehouse (i.e., they remain in the ZG warehouse), GST does not apply, and you are not required to include this in your GST returns.

Capital Allowances

Deductions for the decline in value of depreciating assets are available under the Uniform capital allowance (UCA) system. In addition to the rules for depreciating assets, deductions are allowed for certain other capital expenditure.

Small business entities have the option of choosing simplified depreciation rules. Under these rules, small business entities can claim an immediate deduction if the cost is below the relevant threshold or else add the asset to the small business depreciation pool.

Land, trading stock and most intangible assets (excluding exceptions such as intellectual property and in-house software) are not depreciating assets.

The decline in value is generally calculated by spreading the cost of the asset over its effective life, using one of two methods:

Prime cost method – decline in value each year is calculated as a percentage of the initial cost of the asset
Diminishing value method – decline in value each year is calculated as a percentage of the opening depreciated value of the asset
MORE: Australian Taxation Office (ATO) Decline in value calculator.

For most depreciating assets, taxpayers can either self-assess the effective life, or use estimates published by the ATO. Taxpayers can recalculate, either up or down, the effective life of an asset if the circumstances of use change and the effective life initially chosen is no longer accurate. An improvement to an asset that increases its cost by 10% or more in a year may result in an obligation to recalculate the effective life of the asset.

Decline in value of cars is restricted to the car limit. From 1 July 2022, the luxury car tax threshold for luxury cars is $64,741 (it was $60,733 for the year commencing 1 July 2021). Luxury car leases are treated as a notional sale and purchase, with decline in value restricted to the car limit.

The decline in value of certain depreciating assets with a cost or opening adjustable value of less than $1,000 can be calculated through a low-value pool. The decline in value for depreciating assets in the pool is calculated at an annual diminishing value rate of 37.5%.

Changes for 2022 and 2023

From 12 March 2020 until 31 December 2020, the asset cost threshold for the instant asset write-off (which is usually only available to small business entities) has increased from $30,000 to $150,000 and the eligibility criteria expended to cover entities with an aggregated turnover threshold of less than $500 million (up from $50 million).

Further, from 12 March 2020 until 30 June 2021 the Backing business investment measure applied to businesses with aggregated turnover below $500 million and provides either:

A deduction of 50% of the cost or opening adjustable value of an eligible asset on installation (existing depreciation rules apply to the balance of the asset's cost), or
For businesses using a small business depreciation pool, a deduction of 57.5% of the cost of the asset in the first year, with the balance added the asset to the small business pool
In addition, from 6 October 2020 to 30 June 2023, full expensing applies to allow eligible businesses with an aggregated turnover of less than $5 billion to deduct the full cost of new eligible depreciating assets. For businesses with aggregated turnover of less than $50 million, full expensing also applies to eligible second-hand assets.

Activity Statement

Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business taxpayers who need to pay quarterly PAYG instalments also use activity statements.

Activity statements are personalised to each taxpayer to support reporting against identified obligations.

Activity statements for businesses may be due either quarterly or monthly. Generally, businesses can lodge and pay quarterly if annual turnover is less than $20 million, and total annual PAYG withholding is $25,000 or less. Businesses that exceed one or both of those thresholds will have at least some monthly obligations. Non-business taxpayers are generally required to lodge and pay quarterly.

Taxpayers with small obligations may be able to lodge and pay annually. Some taxpayers may receive an instalment notice for GST and/or PAYG instalments, instead of an activity statement.

The Australian Taxation Office (ATO) web site provides instructions on lodging and paying activity statements. Detailed instructions are provided for each of the different tax obligations:

GST (Goods and Services Tax)
PAYG (Pay As You Go) Instalments
PAYG (Pay As You Go) Withholding
FBT (Fringe Benefit Tax)
LCT (Luxury Car Tax)
WET (Wine Equalisation Tax)
Fuel Tax Credits