Faking Your Netflix Or Spotify Address May Be An Offence If It Lets You Avoid Paying GST In 2020

Singapore’s ‘Netflix Tax’ Will Take Effect From 1 Jan 2020

Announcing the Budget 2018 last Feb, then Finance Minister Heng Swee Keat mentioned that purchases of digital services like Netflix and Spotify will soon be subjected to a Goods & Services Tax (GST). Some dub it the ‘Netflix Tax’.

A year and a half later, the tax is finally coming into force. Current Finance Minister Lawrence Wong said in parliament on Monday (4 Nov) that the Netflix tax will kick in on 1 Jan 2020.

He also said that consumers in Singapore who fail to pay the 7% GST – which could happen if they sign up for a subscription service using an overseas address – may be punished by the law for tax evasion.

Source

Most digital services will be taxed

GST will be levied on companies of digital services if they have global revenue exceeding $1 million and local revenue exceeding $100,000.

According to the speech, the new tax will affect digital products and services like:

  • Mobile apps
  • E-books purchases
  • Online newspapers and journals
  • E-courses
  • Content streaming services
  • Booking websites

The tax on digital goods and services will make doing business in Singapore fair to local retailers who have to pay GST.

Some companies may choose to absorb the GST in order to maintain competitive prices. But most of the time, companies pass on the tax to consumers. 7% may seem little when taken out of an inexpensive subscription fee. But when you’re talking about millions of dollars in revenue, 7% becomes a giant slice of the pie, which companies probably will not wish to absorb completely.

Tax evasion is an offence

Although the tax will be small – less than $1.20/month for the premium Netflix subscription – failing to pay it is still punishable by law.

According to IRAS, a consumer who fails to pay GST will be punished with a penalty of 3 times the tax amount, or more severely, be liable to a fine not exceeding $10,000 or imprisonment.

 

So remember, the next time you think about signing up for a digital service using a foreign address, think again. There are taxes that have to be paid.

While this tax may seem like bad news, it is only fair for local retailers. So kudos to the government for levelling the playing field!

Featured image from The Smart Local.

The Must Share News Team

Teamwork makes the dream work.

Recent Posts

Pilot treats passengers to pizzas after emergency landing causes hours-long delay in the US

He made sure all the passengers were served before taking a slice for himself.

22 Nov 2024, 6:32 pm

Woman in China grows ‘trident’ flesh on fingernail, apparently due to improper & frequent manicures

The doctor recommended a 2-week gap between manicures to allow nails to recover.

22 Nov 2024, 6:08 pm

Loyal pet dog in China tracks owner’s scent for 16km to reunite with her in hospital

The dog stayed with its owner until she was discharged.

22 Nov 2024, 6:04 pm

Newborn piglet falls off truck in Thailand, still had umbilical cord attached

Following the incident, netizens felt compelled to reconsider pork consumption.

22 Nov 2024, 5:25 pm

Dog guards 81-year-old owner’s body after she falls into pond & dies in Thailand

The dog, Taohu, was inseparable from its owner, who raised it from puppyhood.

22 Nov 2024, 5:09 pm