Currently, media sales for advertisement enjoys zero-rating under s21(3)(u) international services if at least 51% of its physical circulation for physical advertising eg newspapers, magazines (or customers’ location for digital advertising eg television/radio broadcasting, internet) is outside of Singapore. Other related advertising services are also accorded the option of zero-rating if it is contractually supplied to an overseas person and directly benefitting an overseas person. Event organising relating to the exhibition or convention services performed overseas can be zero-rated under s21(3)(i). Event organising where the exhibition or convention services are performed in Singapore, can be only be zero-rated under s21(3)(k) if it is directly contracted, supplied and benefitting a person belonging outside Singapore (‘an overseas person’) wholly in his business capacity. It would seem a bit confusing as different application for the rule of zero-rating applies with advertising services and other related services eg event organising, with the former on the locality of the supply while the latter on the beneficiary of the supply.

This locality rule for advertising media sales will no longer apply in less than 6 months. With effect from 1 January 2022, the locality rule for zero-rating will be replaced by the direct contract, direct benefit overseas person rule. This will directly impact specifically the sale of local print advertisement. Local physical print advertisement will soon have to be charged at 7% GST as it is likely that it is supplied, contracted and benefitting a non-GST registered person in Singapore. For SMEs who are buying local print media advertisement to promote its product or services and are not GST registered, you will be charged with the additional 7% GST. This increase in costs may be significant depending on the amount of your marketing spend. It is worth to start to assess the financial and operational impact of this change now and how it will change your media strategy for next year.