Provision of web-advertising service (e.g. banner ad, sidebar ad and pop-up ad) is a sale of advertising space or time. It is a form of media sales.
Media sales refer to:
Prior to 1 Jan 2022
- Sale of advertising space for hardcopy print and outdoor advertisements via newspapers, magazines, billboards, etc.;
- Sale of advertising airtime for broadcasting via TV and radio; and
- Sale of media space for online advertising (in the form of page view, impression, hit rate, electronic data mail, SMS messages, etc.) in other digital media via email, internet and mobile phone.
The entire package of media sales may be zero-rated
under Section 21(3)(u) if the advertisement is placed on a webpage or website that allows access to both Singapore and overseas viewers/browsers.
However, if the advertisement is placed on a website or webpage that only allows access to Singapore viewers/browser (i.e. sg domain), the entire package of media sale should be standard-rated.
New! On or after 1 Jan 2022
In Budget 2021, the Minister for Finance announced that the basis for determining whether zero-rating applies to a supply of media sales, including web-advertising media space, will be changed from the place of circulation of the advertisement to the place where the customer and direct beneficiary of the service belong. The change is made in recognition of the growth in online advertising and the compliance difficulties faced by businesses in determining the place of circulation of advertisements especially for online media sales.
The revised GST treatment will apply to supplies of media sales made on or after 1 Jan 2022. It will apply to the media owner and intermediary supplier such as the media agency, creative advertising agency or full range advertising agency. Other suppliers can also adopt the GST treatment if they make an onward supply of media sales, such as a holding company buying and supplying it to its related companies.
Stay tuned with us for next issue to share the summary of table for quick glance!!