The Inland Revenue Authority of Singapore (IRAS) has released an updated e-Tax Guide, GST: Guide for Motor Vehicle Traders (Eighth Edition) on 2 December 2024.
This guide is for GST registered businesses selling new and/or second-hand motor vehicles. The purpose of this guide is to explain the GST treatment applicable to motor vehicle traders and to illustrate the GST computations for sale of motor vehicles.
In general, most motor vehicle charges are subject to GST, except for regulatory fees imposed by the Land Transport Authority on new vehicle sales.
The GST treatment for the sale of a new motor vehicle differs from that of a second-hand motor vehicle. For the sale of a new vehicle, GST is chargeable on the selling price of the motor vehicle excluding regulatory charges such as COE. For the sale of a second-hand motor vehicle, the computation of the GST chargeable depends on whether the sale is made under the Gross Margin Scheme or the Discounted Sale Price Scheme.
A second-hand vehicle is a used motor vehicle which has been registered in Singapore. It excludes any used vehicle which was registered overseas. Gross Margin Scheme is a scheme for the sale of a second-hand motor vehicle whereby GST is charged on the difference between the selling price and the purchase price of the vehicle.
Discounted Sale Price Scheme is a scheme for the sale of a second-hand motor vehicle whereby GST is charged on 50% of the selling price of the vehicle.
