Taxes for E-commerce Businesses in Singapore- A 2026 Guide

Running a successful e-commerce business is not all about generating consistent sales. It is also about adhering to tax laws to ensure a hassle-free operation. In Singapore, companies of all sizes are liable to pay various taxes in a timely manner to avoid penalties. If you're struggling to understand taxes for e-commerce businesses in Singapore, this guide can help.

Types of Taxes for E-commerce Businesses in Singapore

E-commerce taxes in Singapore can be complex to understand, especially for new entrepreneurs. Here’s all you need to know about Singapore’s e-commerce tax rules:

1. Corporate Tax (CIT)

According to the Singapore tax laws, the corporate tax rate is set at 17%. You must file the required documents, including Estimated Chargeable Income or ECI, within three months after the completion of your business’s financial year.

2. Income Tax on Digital Services, including Dropshipping

Self-employed individuals facilitating digital services (including website building, social media marketing, and app development) or running a dropshipping e-commerce store can be subject to income tax if:

• Their aggregate yearly income exceeded S$6,000
• Their combined net trade income and annual taxable income exceeded S$22,000.

3. No Taxes on Foreign Income

No taxes will be levied on income generated outside Singapore’s territory. However, if such income is repatriated to Singapore, taxes may be applicable.

4. GST on Supply of Goods and Services

A 9% GST is applicable to e-commerce businesses with an annual revenue exceeding S$1 million. On top of that, if you are also involved in the importation of goods and services, you still have to pay GST in Singapore.

5. Digital Products are No Longer Tax-free

According to Singapore tax rules, the sellers of e-books and software are no longer exempt from GST. They must abide by the standard GST rate regardless of the market they address.

6. Excise Duty on Alcoholic Beverages

The excise duty is a tax rate calculated on the basis of the alcohol content (liters of pure alcohol (LPA)) in a specific beverage. Currently, the excise rate ranges from S$16.00 to S$88.00 per liter of alcohol.

7. Withholding Taxes (WTH) On Royalties and Technical Fees

E-commerce businesses can be subject to withholding taxes on payments made to overseas clients regarding, but not limited to:

• Royalties
• Technical service fees
• Rental of movable property

WTH in Singapore ranges from 10% to 15%.

8. GST Registration Under Overseas Vendor Registration (OVR)  for Non-Resident Business

GST registration under the OVR regime is mandatory for foreign businesses operating in a non-Singaporean market and selling products to non-GST-registered individuals in Singapore provided:

• Their annual turnover surpasses S$1 million
• The B2C supply of remote services (whether digital or non-digital) or low-value goods (LVG) exceeds S$100,000 annually.

Essential Documents for E-commerce Tax Compliance in Singapore

Now that you have understood the taxes for e-commerce business in Singapore, it is time to examine the documents required for tax compliance.

• Serially numbered receipts or invoices issued
• Invoices or receipts received from vendors or service providers
• Rental agreements (signed by both the landlord and tenant)
• Books or records for goods taken for private use
• Credit notes for returned goods
• Bank statements as evidence of payment received and made
• Contracts or agreements for services rendered and payments made
• Payment vouchers for employee remuneration
• Employer’s CPF (Central Provident Fund) records (if applicable)
• Balance sheet and profit & loss statement

Schemes For Reducing Taxes for E-commerce Businesses in Singapore

Singapore fosters a supportive environment for startups, including emerging e-commerce businesses. That said, it offers several schemes that can contribute to significant tax savings, allowing entrepreneurs to boost their profits.

Here’s the breakdown of popular schemes that can serve as boons for e-commerce entities in Singapore.

1. Start-up Tax Exemption (SUTE)

SUTE has emerged as a viable scheme for qualifying new businesses, as it offers up to 75% tax exemption for the first three years of operations.

2. Partial Tax Exemption (PTE)

Online businesses that do not qualify for SUTE can apply for PTE. As a startup-friendly scheme, the PTC offers a 75% tax exemption to all entities, including online ventures that sell both physical and digital products.

3. Double Tax Deduction for Internationalisation (DTDI)

This scheme provides extensive support to small businesses and startups across various industries, including e-commerce. It enables enterprises to avail of a  200% tax deduction on qualified expenses for internationalization.

4. Enterprise Innovation Scheme (EIS)

E-commerce businesses pursuing platform innovation that translates to real-world outcomes can apply for this scheme. EIS allows a tax deduction of up to 400% on:

• IP Training
• Cash payment on Research and Development (R&D)
• Innovation

Points to Consider For E-commerce Taxation in Singapore

Here are the key points you have to consider before proceeding with compliance management for Singapore e-commerce taxation:

• All taxable businesses must file GST returns via GST F5 with the Inland Revenue Authority of Singapore (IRAS). The return must be filed within one month from the completion of your accounting period. You can do so by creating a Corppass account.
• Once registered, the business owner must charge 9%  GST on all taxable sales occurring within Singapore.
• The selling price of goods and services should include GST.
• You can apply for a remittance for GST paid on business expenses via a claim application.
• Whatever amount you get by subtracting “output tax” from “input tax” must be remitted to the IRAS.
• IRAS may issue an Estimated Notice of Assessment (NOA) in the event of a delayed filing, which will include the penalties and a revised due date for filing.
• Instead of levying immediate penalties, IRAS may ask defaulters to pay a composition amount ranging from S$200 to S$5,000 per offense.
• Avail of tax compliance services if you are unable to cope with ever-changing tax regulations. It is a viable way to ensure streamlined tax management.

Singapore spans a wide range of taxpayers under its tax system, including individuals with a certificate of residence and diverse industries. 

With these guidelines on taxes for e-commerce businesses in Singapore, you can streamline your tax process and fill gaps that may lead to stringent penalties. However, if you are relatively new to the e-commerce regime, you may find it hard to keep up with the tax rules. That’s where a seasoned service provider like Business Setup Worldwide (BSW) steps in.

We take pride in resolving business queries, ranging from company formation to accounting & bookkeeping services. Our track record speaks volumes.

So why wait any longer? Contact us at +971 504808605 or email us, and book a free consultation.