AGENCY TAX SUMMARY FOR SINGAPORE
As an agency, your agreement is with RecruitiFi. RecruitiFi has no physical presence in Singapore, thus the supply is treated as an international export of services. Agencies in Singapore will treat their services to RecruitiFi as zero-rate (0%) for the purposes of GST. Payments from RecruitiFi will not include GST for Singaporean hires.
The Inland Revenue Authority of Singapore (IRAS) has reviewed our terms and business model and has provided the following guidance.
According to Section 21(3)(k) of the GST Act, the supply of services is zero-rated if the services are international services under a contract with a business that belongs outside Singapore.
RecruitiFi does not have a presence in Singapore, so any placements made by agencies in Singapore are treated as zero-rated transactions for the purposes of GST.
But I have a contract with the Employer, and they're in Singapore. Shouldn't I be charging GST to the Employer?
Again, this situation has been reviewed by the IRAS, and technically, Agencies are not directly contracted with any Employers for the purposes of Singaporean taxes. The Employers are contracted with RecruitiFi and pay RecruitiFi for the services. All Agencies are also contracted with RecruitiFi, and RecruitiFi pays the Agencies as consultants.
Even if an Employer and an Agency had a prior relationship, the RecruitiFi Terms supersede their previous contracts for the duration of their engagement through RecruitiFi.
Whether the Employer is located in the Singapore does not factor into the tax situation.
Since I'm providing the services in the U.S., is there U.S. sales tax?
All Agency services are received by RecruitiFi in New York state. Services are not taxed in New York, so there is no need to collect or pay local sales tax in the U.S.
Tags: Tax, Taxes, GST, Singapore, Goods & Services Tax, Agencies, Agency