IMPORT USED CARS
An import refers to goods brought into customs territory from an entry point or a free trade zone (FTZ), or overseas goods brought into a free trade zone for storage and pending re-export. To import goods into Singapore, you are required to make a declaration to Singapore Customs. Imported goods are subject to GST and/or duty payment. A Customs permit is required to account for the import and tax payment of the goods
Dutiable goods, which incur both GST and duty, are:
- Intoxicating liquors
- Tobacco products
- Motor vehicles
- Petroleum products
All other goods are non-dutiable and incur only GST. GST is levied at 7%.
Before the goods are imported, the importer is required to obtain a Customs permit. The importer is the party who imports the goods into Singapore either for their own use or on behalf of some other person.
When importer is an individual
Once the vehicle has been purchased and shipped to Singapore, the importer may apply for an assessment of the vehicle’s customs value. An application has to be submitted for every imported unit of vehicle. The following documents need to be maintained
- Commercial invoice
- Bill of lading
- Freight and insurance invoices
- Bills/receipts relating to incidental charges incurred during shipment
- Full manufacturer’s specification card (a listing of standard and optional equipment on the vehicle and unique for every vehicle)
- Completion Inspection Certificate (CIC) Paper
- Registration/De-registration documents from the country of exportation
- Manufacturer’s letter confirming date of vehicle’s manufacture
- Payment documents for the purchase (for example, telegraphic transfer slip)
- Clear photos of the odometer (showing mileage), interior, exterior and engine/chassis number (for used vehicles)
When the importer is an authorized agent
Authorized agents have a distributorship agreement signed with the owner of a brand of motor vehicle, which allows them to import and distribute that brand of motor vehicles in certain territories.
Once the application is approved, an approval letter from Singapore Customs containing details of the vehicle, such as unit price and incoterms, will be sent to the importer
Once the approval letter is received, the importer should submit an In-Payment (Duty and GST) permit through TradeNet.
A declaring agent or freight forwarder can be appointed to submit the permit on the importer’s behalf.
No refund of duty and GST except for cases of overpayment or erroneous payment will be allowed once the vehicle has been removed from customs control or a Free Trade Zone.
The following are the situations that affect the price of the used car
- Certificate of Entitlement (COE): Legal document allowing a car to be driven on Singapore roads. Can be renewed for 5 or 10 year durations.
- Open Market Value (OMV): Every car has its Open Market Value – the price tagged on the car by Singapore Customs based on purchase price, freight, insurance and all other charges related to the sale and shipment of the car to Singapore. As we’ll detail later, the OMV determines the maximum loan amount you can borrow.
- PARF (Preferential Additional Registration Fee): If you are looking at a used car, you’d likely be looking at PARF cars (less than 10 years old) instead of COE cars (Certificate of Entitlement, typically referring to a car that has had its COE renewed). These terms are commonly used to provide a quick indication of the car’s age. If you decide to deregister the car before the 10-year expiry date, you’re entitled to a PARF rebate, pegged at a percentage of the remaining OMV. Note that you may have difficulty in securing a loan for a COE car.
- Additional Registration Fee (ARF): Lastly, there’s ARF, a tiered tax based on the OMV of the car.
A proper car inspection is required in the case where used are concerned. Though a used car is of a lesser value than a new car, the maintenance and repair charges on the used car is high.
Importation of Used Vehicles
Vehicles that do not meet the requirements of registration as brand new will be classified as used vehicles. Only vehicles that are less than 3 years of age may be imported and registered for use in Singapore. A surcharge of S$10,000 is payable for each imported used car registered in Singapore. The age of a used vehicle is reckoned from the date of its first registration in a foreign country. All imported used cars will have to undergo an emission and fuel economy test at the Vicom Emissions Test Laboratory (VETL) to ascertain their fuel economy and Carbon Dioxide (CO2) figures at the point of importation into Singapore. The combined values of the CO2 will be used for the computation of the rebate or surcharge for the CEVS
Carbon Emission-Based Vehicle Scheme
The CEVS takes into consideration a vehicle’s carbon emissions and fuel efficiency to encourage consumers to shift to low emission models. Vehicles with low carbon emissions qualify for rebates. Vehicles with high emission attract more charges.
All imported cars must comply with the Road Traffic Rules.
Following are the requirements for importing a car.
- Obtain a conformity certificates that all the requirements are fulfilled.
- Those parts that fall outside the remit of conformity schemes in other nations must be certified on an individual basis, as will those covered by conformity schemes that do not meet or exceed Singapore’s requirements
- the vehicle registration document issued by the foreign authority is required
- Arrange for shipment of the car to Singapore. The shipping agent will have to submit a joint application for an Inward Cargo Clearance Permit to Singapore Customs (CED) using the Tradenet System
- The CED will assess the Open Market Value(OMV) of your vehicle. Customs duty is levied at 20 percent of the OMV of a car
- A seven percent charge will also be levied on the CIF (cost, insurance and freight) value of the import, as calculated via Singapore Customs form SC-A-012
- Submit SC-A-012 with copies of commercial invoices, freight and insurance papers, receipts relating to other charges, technical specifications certifications and cards, registration and de-registration certificates
The following are a few of the technical formalities that need to be
- All safety glass fitted must have not less than 70 percent light transmittance and must not contain any metallic oxide coating
- Only right-hand drive vehicles are allowed in Singapore (left-hand drive vehicles may travel through Singapore, provided certain obligations are met)
- The vehicle must be able to use unleaded petrol, unless it has a diesel engine
- The vehicle must be fitted with approved front and rear safety belts
- The vehicle must have asbestos-free brake and clutch linings
- Air-conditioning units must be CFC-free
- Use of hydrocarbon refrigerants in air-conditioning systems is not permitted
Registration can be undertaken on behalf of the motorist by a car agent. If a vehicle to be registered has been imported from another country the import and inspection documentation needs to be complete. Registering a car invites fees to be paid. Registration fees sums up to a considerable amount of the vehicle, specifically if the vehicle is imported. The following are the documents and formalities to be fulfilled for registration;
- Completed Car Registration Application form (R01)
- COE (initially received as a temporary COE to be validated upon registration)
- The appropriate identity documents
- Original insurance cover note or certificate of insurance
- Any import documentation
- Notification of PARF (Preferential Additional Registration Fee) benefit or COE rebate (if any)
- Successful bidding letter for Vehicle Registration Number (if any)
Collect the following from the New Registration section at LTA after registering:
- Registration card / vehicle log card
- Road Tax disc
- Insurance cover note / certificate of insurance
COE – Certificate of Entitlement
The Land Transport Authority governs the number of vehicles on the Singapore roads with a vehicle quota system to encourage the use of public roads. A COE represents a right to vehicle ownership and use of the limited road space for 10 years. At the end of the 10-year COE period, vehicle owners may choose to deregister their vehicle or to revalidate their COEs for another 5 or 10-year period by paying the Prevailing Quota Premium. COEs are released through competitive bidding. There are 2 bidding exercises every month. COEs are bid through the COE Open Bidding System. The System provides real-time information to allow you to submit your bid for a COE, monitor the Current COE Prices, and revise your reserve price for your bid.
While importing a vehicle to Singapore, the following guidelines need to be met
- You can only import cars that are less than 3 years of age.
- The age of a used vehicle is valid from the date of its first registration in a foreign country.
- If you cannot ascertain the first registration date of the vehicle, then the age of your vehicle will be deemed to be valid from the first day of its manufacture.
- Your car must use unleaded petrol
- Your car must pass an inspectionat any authorised inspection centres.