Major Exporter Scheme in Singapore

Roger Pay
Dec 16, 2023
5 min read

Updated: Nov 9

🚢 Singapore's Major Exporter Scheme (MES): The Ultimate Guide to Boosting Your Cash Flow

Major Exporter Scheme in Singapore

For international trading companies using Singapore as a global or regional transshipment hub, managing Goods and Services Tax (GST) on imports can severely impact working capital. The Major Exporter Scheme (MES), administered by the Inland Revenue Authority of Singapore (IRAS), is a vital tax suspension program designed specifically to resolve this cash flow challenge.

This guide breaks down what the MES is, its key benefits, eligibility criteria, and the application process to help your business leverage this significant financial advantage.

What is the Major Exporter Scheme (MES)?

The Major Exporter Scheme (MES) is a GST suspension scheme that allows approved businesses to import non-dutiable goods into Singapore without paying GST upfront at the point of importation.

Under standard GST rules, a business pays the 9% GST to Singapore Customs upon import and then claims it back later through its GST returns. For companies heavily involved in re-exporting, this process creates a significant cash flow strain, as their export sales (which are zero-rated for GST) do not generate output tax to immediately offset the input tax paid on imports.

MES alleviates this strain by suspending the import GST. Instead of paying upfront, the approved business accounts for the deemed input tax and output tax in its GST return, effectively resulting in a net GST effect of zero for goods that are primarily meant for re-export.

Key Benefits of MES:

⚡ Enhanced Cash Flow: This is the most significant advantage. By not having to pay GST upfront, millions of dollars in working capital can be freed up, allowing funds to be reinvested into the business.
🚫 Suspension of Import GST: Enjoy immediate suspension of GST on non-dutiable goods imported into Singapore.
📦 GST Suspension on Warehouse Removals: The suspension also applies to goods removed from a Zero-GST (ZG) Warehouse.
🌍 Ideal for Global Trade & Logistics: It strongly supports businesses that utilize Singapore as a transshipment or regional distribution hub, making trade operations more cost-efficient.
🤝 Covers Agency Shipments: The scheme can be extended to cover goods imported on behalf of non-GST-registered overseas principals under specific conditions (Section 33(2) and 33A agency arrangements).

🎯 Is Your Business Eligible for MES?

The MES is targeted at companies with a substantial volume of imports destined for re-export. To qualify for this valuable status, your business must meet several strict criteria set by IRAS:

Criterion	Requirement Details
GST Status	Must be a GST-registered business in Singapore.
Financial Health	Must be active and financially solvent.
Export Intensity (Must meet one of two conditions)	1. Zero-rated supplies (primarily exports) must constitute more than 50% of your total supplies, OR 2. The value of your zero-rated supplies must exceed S$10 million over the past 12 months.
Compliance History	Must maintain a good compliance record with both IRAS (timely filing of tax returns) and Singapore Customs.
Internal Controls	Must maintain proper internal controls and accurate accounting records to support GST reporting.

Note: The MES is typically granted for an initial period of three years. Successful renewals may extend the validity period to up to five years, provided the business continues to meet all qualifying conditions.

📝 How to Apply for the Major Exporter Scheme

The application process for the MES requires a thorough self-review of your GST compliance and internal controls.

Application Steps:

Satisfy Eligibility Conditions: Ensure your business meets all the qualifying criteria listed above.
Complete Form GST F10: Fill in the official application form for the Major Exporter Scheme.
Perform an ASK Review: You must perform a self-review using the Assisted Self-Help Kit (ASK) methodology provided by IRAS. This is a critical step to assess the robustness of your GST control framework.
Submit Certified ASK Declaration: The ASK declaration form must be certified by an Accredited Tax Advisor (ATA) or Accredited Tax Practitioner (ATP). This certification validates the completeness and accuracy of your self-review.\
- Alternative: Businesses with a valid Assisted Compliance Assurance Programme (ACAP) status may not need to submit the ASK declaration form.
Submit to IRAS: Submit the completed GST F10 application form and the certified ASK declaration to IRAS.
Provide Guarantee (If Required): IRAS may require a bank or insurance guarantee before granting approval, based on the risk profile of the business.

Post-Approval Obligations

Once approved, MES holders have continuous compliance obligations to maintain their status, including:

Correct GST Reporting: The value of goods imported under MES must be correctly reported in Box 5 (Total value of taxable purchases) and Box 9 (Total value of goods imported under schemes) of your quarterly GST F5 return.
Declaring Agents: You must formally authorize your declaring agents (e.g., freight forwarders) via the myTax Portal.
Record Keeping: Maintain all supporting documents (permits, invoices, export evidence, etc.) for a period of five years.
Monitoring: Continuously monitor your export ratio to ensure it remains above the minimum threshold.

🔑 Your Next Step for Maximizing Cash Flow

The Major Exporter Scheme offers a significant competitive edge by unlocking working capital. However, the application process, particularly the mandatory ASK review and ongoing compliance, is complex and requires specialized GST expertise.

Bestar Singapore - an Accredited Tax Professional in Singapore who Specializes in MES Applications and Compliance

Major Exporter Scheme in Singapore

Bestar Singapore offers a range of tax and advisory services, and we provide GST support services and assistance with the Major Exporter Scheme (MES) application and compliance.

Key Takeaways on Bestar Singapore and MES:

GST Advisory & Compliance: Bestar provides Tax Advisory & Compliance services, which includes support for the Goods and Services Tax (GST).
Accredited Professionals: Our team includes professionals, such as the Audit Leader, who are professional members of the Singapore Institute of Accredited Tax Professionals (SIATP). This accreditation is crucial because the MES application process requires the submission of the Assisted Self-Help Kit (ASK) declaration form to be certified by an Accredited Tax Advisor (ATA) or Accredited Tax Practitioner (ATP).
Relevance to MES: Our general business advisory services, which cover compliance, audit, and tax, are relevant to the stringent requirements of the MES, which focuses heavily on robust internal controls and compliance records.

The Role of an Accredited Tax Professional in MES

To clarify the importance of accreditation for the MES:

The Inland Revenue Authority of Singapore (IRAS) mandates that businesses applying for or renewing the MES must submit the ASK declaration form certified by an accredited professional. This certification confirms that the business's GST compliance has been reviewed and is robust.

Bestar can assist with the entire MES process, including:

Feasibility Assessment: Checking if your business meets the export intensity and other qualifying conditions.
ASK Review and Certification: Conducting the mandatory GST self-review using the Assisted Self-Help Kit (ASK) and providing the required certification to IRAS.
Application Submission: Managing the submission of Form GST F10 and the certified ASK declaration.
Ongoing Compliance: Advising on the proper GST reporting (e.g., in Box 9 of the GST F5 return) and maintaining the required internal controls to ensure MES status is not revoked.