I don’t know about you, but whenever someone reminds me constantly about things I already know – I get a little annoyed. But when the government reminds me to pay GST on my overseas purchases after coming back from a well-deserved vacation – the plain-clothed anti-terrorist commando in me just wants to scream out in rage!
No, I’m not saying you need to act like a jerk at the airport and get yourself arrested just because you refuse to pay GST on your hard-earned purchases. What I’m saying is this – there’s a better way to avoid the “Welcome Back! Pay Your GST Now!” trap once you come back from holiday.
Right on schedule to…pay more money to the government!
So How Much GST Would I Have to Pay?
According to Singapore Customs, if your holiday takes you away from Singapore for more than 48 hours, you’ll need to pay 7% GST on any holiday purchases exceeding S$600.
And if you’re only taking a mini-vacation this holiday season lasting less than 48 hours, you’ll need to pay 7% GST on any holiday purchases exceeding S$150.
So, if you come back to Singapore with a new iMac, iPad Mini, a pair of LV bags, and a trio of Furbies (because your grandma and nieces love those adorable, but slightly creepy toys) – that 7% GST means you’ll need to pay over $250!
Also, if you bring back any of the following, you’ll need to pay GST no matter what:
- Liquor
- Tobacco Products
- Petroleum
- Goods imported for resale (another overhead for running a blog shop)
But there are ways you can…er, bypass GST when you come back… not that I urge you to any particular course of action. Here’s how you can do that:
1. Take It Out of The Package
That may end up being some expensive packaging.
If you purchase some (I don’t mean a suitcase full!) fancy new electronics or luxury goods overseas and don’t take them out of their original packaging, you might as well get a giant TAX ME tattoo on your forehead.
Nothing makes a customs officer raise the question “have you paid GST on this?” faster than an obviously EXPENSIVE item that’s either still in its packaging or has its price tag dangling out.
So what can you do?
Simple – make that new purchase look like you didn’t just buy it in Paris or New York a few days ago. Take it out of its packaging, rip all price tags off, and if you can “use” it immediately, do so. That means doing the following:
- If you bought a new laptop or tablet, put it in an older or cheap looking laptop bag and not the “factory” bag it may have came with.
- If you bought a luxury item (bag, watch, jewelry, etc.) wear it!
- If you bought expensive designer clothing, just make sure you pull off all the price tags.
2. Buy Your Apple Products in… Malaysia!?!
Ok, this one’s for the Apple fanatics out there. I’ve had a lot of friends who have purchased Apple products while on holiday in the U.S. because they thought it would be cheaper.
Compared to Singapore, it is cheaper, but with sales tax (varies according to the state you visit), it’s actually about the same price or even more expensive by comparison.
So this might come as a shocker, but the cheapest Apple products anywhere are in Malaysia. In fact, if you want to buy the latest iPad, Malaysia is the cheapest place in the world to get it.
Of course, if you’re heading to Malaysia for a day trip to buy an Apple product you need to watch out for 2 things if you want to bypass paying GST:
- You can either just follow point #1 above and make sure you discard the packaging; or
- You can stay in Malaysia for longer than 48 hours to take advantage of the $600 GST “relief” if your purchase is lower than that amount.
3. That’s What Friends Are For…
Who doesn’t buy gifts for friends and family when on holiday? Of course, sometimes those gifts happen to be rather expensive, like laptops and tablets.
Let’s say that you travelled to the U.S. on holiday with some friends and you bought a brand new iMac and bought two iPads for your siblings – once you get home, chances are damn good that you’ll have to pay GST on those purchases.
But if you “gift” those iPads to your friends who traveled with you before hitting customs, it’ll look like you and your friends each bought one! Just make sure your “friends” are nice enough to “gift” those devices back to you once you’re all in the taxi home. That should help you bypass the GST expense.
After all, a gift is a gift right?
Some Final Advice – Don’t Be an Idiot!
Remember, it’s one thing to come back with a couple of expensive items that are for your own personal use, but it’s another thing entirely to return with a suitcase full of luxury bags, expensive TCM ingredients (tiger penis anyone?) or electronics.
If you try to do that and Singapore Customs catches you – you’re in for a world of pain. You’ll either have to pay a fine of $10,000 or 20X the amount of the duty/GST. Even worse, you might end up staying at Changi Prison for up to 3 years.
So be sensible. If you make a ton of expensive purchases overseas and come back with suitcases full of pricey merchandise – you can probably afford to pay the 7% GST that comes with them. We’ll be taking a look subsequently at how to make the most of your overseas spending with the right credit cards sostay tuned with us on Facebook, or head on down to SmartCredit.sg if you’re looking for the right credit card for your holiday soon.
Do you have any other GST tricks that you’ve found out? We’d be grateful if you shared them here!
Image Credits:
ratnadella, kaysha
About the Author
Jeffrey Cuellar I'm the Senior Writer for MoneySmart.sg and a connoisseur of Russian Literature and 80s action movies. Before joining MoneySmart.sg I wrote intelligence reports in the Army (yes, spent a year in the "sandbox") and advertising/marketing copy at a marketing communications agency. One thing I've learned about writing over the years is that there's nothing more satisfying than entertaining and enlightening your audience. If you have any topics you'd like me to cover or just want to say "what's up", please feel free to email me at jeff@moneysmart.sg