Selling motor vehicles and cars in Singapore is a complex activity which implies the following activities:
All cars and vehicles in Singapore must be registered with the Land Transport Authority (LTA). Singapore companies selling motor vehicles are also required to register with the Customs authorities.
Due to all safety requirements imposed by the LTA for Singapore companies selling motor vehicles, there are certain documents to be obtained when importing and re-selling cars. The following documents are necessary when importing motor vehicles in Singapore:
Cars can be imported based on the Discounted Sales Price Scheme which allows companies in Singapore to sell second-hand motor vehicles with a goods and services tax applied on 50% of the selling price of the car. Cars can also be imported according to the Gross Margin Scheme through which the GST applies on the difference between the vehicle’s selling and purchase price.
Not all companies are required to register for taxation purposes with the Singapore tax authorities. However, companies selling motor vehicles in Singapore are required to pay the goods and services tax on the cost, insurance and freight (CIF) value and the customs duties.
Singapore companies selling new vehicles are required to display the price of the vehicle with the GST included. If selling motor vehicles to another vehicles trader, the company is not required to display the price with the GST. The vehicles are also subject to a mechanical inspection with the Land Transport Authority before being registered.
Singapore citizens purchasing cars under the Preferential Additional Registration Fee may benefit from returns on their used vehicle’s open market value upon de-registration.
For information regarding tax incentives for selling or purchasing motor vehicles please contact our specialists in Singapore.