The Approved Contract Manufacturer and Trader (ACMT) Scheme: GST Relief for Singapore Contract Manufacturers Serving Overseas Owners

Most Singapore GST conversations about manufacturing companies start and end with the Major Exporter Scheme (MES). It is the scheme every accountant mentions first, and for good reason: it is broad and covers a wide range of import-heavy, export-heavy trading businesses. But MES is not the only GST relief on offer, and for a specific slice of Singapore’s manufacturing base, it is not even the right one.

If your company performs contract manufacturing, assembly, testing or other value-added work on goods that belong to an overseas customer, and that customer is not GST-registered in Singapore (or is registered only as a “pay-only” person under the Overseas Vendor Registration regime), the Inland Revenue Authority of Singapore (IRAS) has a separate, narrower scheme built specifically for you: the Approved Contract Manufacturer and Trader (ACMT) Scheme.

ACMT is not new, but it is genuinely under-discussed relative to how much cash flow and administrative relief it can deliver for semiconductor, precision engineering, printing and active pharmaceutical ingredient (API) manufacturers who process goods on behalf of overseas principals. This article sets out what the scheme actually covers, who qualifies, how it is applied for, and how it differs from the Major Exporter Scheme so you can work out which relief, if any, fits your business.

What Is the ACMT Scheme?

The ACMT Scheme relieves approved contract manufacturers and approved logistics companies of the need to account for GST on value-added activities, such as processing, assembly and testing, performed on goods belonging to overseas clients. According to the IRAS ACMT Scheme page, the scheme is “designed to relieve businesses (e.g. local contract manufacturers) that have substantial business with overseas clients of the need to account for GST on value added activities performed on the goods of such clients.”

In practical terms, this means a Singapore contract manufacturer working on components or materials that legally belong to an overseas principal, rather than to the Singapore company itself, does not need to charge or account for output GST on the processing fee, provided the treated goods are subsequently exported, delivered to another ACMT-approved party, or delivered to the overseas client’s own customer.

The “Overseas Client” Test

The scheme’s eligibility hinges on the status of your customer, not merely on where the goods physically end up. IRAS defines an “overseas client” for ACMT purposes as an overseas customer who is either not GST-registered in Singapore, or, if GST-registered, is registered only as a “pay-only person” under the Overseas Vendor Registration (OVR) regime. This is a narrower and more specific test than the general “belonging to a person overseas” language used elsewhere in the GST Act, and it is worth checking carefully against your actual customer contracts before assuming the scheme applies.

If your overseas customer is a fully GST-registered entity in Singapore transacting on its own account (rather than a pay-only OVR registrant), the ACMT relief on value-added services will generally not apply to that arrangement, and ordinary GST rules take over.

Who Can Apply: Eligibility and Industry Scope

Unlike MES, which is open to a broad range of importers and exporters across industries (see our guide to GST registration in Singapore for the general registration thresholds), ACMT is currently restricted to contract manufacturers operating within specific sectors. Per the IRAS ACMT Scheme page, the scheme is available to contract manufacturers in:

• The semiconductor industry;
• The printing industry; and
• The biomedical industry, specifically Active Pharmaceutical Ingredient (API) manufacturing.

Contract manufacturers operating in other segments of the biomedical industry may still be considered, but only on a case-by-case basis. This makes ACMT a genuinely niche scheme, but one that lines up closely with a real cluster of Singapore SME activity: semiconductor back-end assembly and test houses, precision printing operations, and API and pharmaceutical intermediate manufacturers who process materials on consignment from overseas principals.

Two Ways to Apply: ACMT CM or ACMT LOG

Depending on the role your company plays in the supply chain, you apply for approval as one of two categories:

• ACMT CM (Approved Contract Manufacturer): for businesses that physically perform the value-added processing, assembly or testing work on the overseas client’s goods.
• ACMT LOG (Approved Logistics Company): for businesses handling the logistics, storage or movement of goods within the ACMT supply chain without necessarily performing the manufacturing step itself.

The Benefits: What ACMT Actually Relieves

ACMT approval delivers relief across three distinct areas of GST exposure, all set out in the IRAS e-Tax Guide “GST: Approved Contract Manufacturer and Trader (ACMT) Scheme”:

1. Disregarding the Supply of Value-Added Activities

An approved contract manufacturer can disregard the supply of value-added services, such as processing, assembly and testing, where the treated goods are subsequently exported, delivered to another ACMT-approved person, or delivered to the overseas client’s own customer. No GST is chargeable on the processing fee in these circumstances. Relief also extends to value-added work on failed or excess production, provided the resulting scrap or waste is exported or delivered locally to a licensed waste management vendor for disposal at no consideration; self-disposal requires prior written confirmation from the Comptroller of GST.

2. Import GST Suspension

ACMT-approved businesses can enjoy import GST suspension across several scenarios: importation of their own goods for business purposes; importation of goods belonging to an overseas principal acting as a section 33(2) or section 33A agent (where the principal is not GST-registered, or registered only as a pay-only OVR person); importation of raw materials consigned by the overseas client for value-added processing; and re-importation of goods previously sent abroad, subject to the section 33B conditions set out on the IRAS page on importing of goods.

3. Claiming GST on Local Purchases Made on Behalf of the Overseas Client

Where an overseas client purchases goods locally (for example, raw materials) and has them delivered directly to the ACMT company for processing, the ACMT company can claim the GST incurred on those purchases as if it were its own input tax, provided it either paid the GST itself or has refunded the GST to the overseas client. The processed goods must subsequently be exported or delivered to another ACMT-approved party or the overseas client’s customer.

ACMT vs the Major Exporter Scheme (MES)

Because both schemes suspend GST that would otherwise be payable at import or on certain supplies, business owners often ask whether they need one, the other, or both. They address different problems and are not mutually exclusive.

A semiconductor back-end assembly house that both imports its own test equipment and processes consigned wafers belonging to an overseas fabless principal may, in principle, need to think about both schemes for different parts of its operations. This is exactly the kind of structuring question worth raising with your tax adviser before applying for either, alongside related GST relief such as the zero-rating rules for international services that logistics-heavy manufacturers also rely on.

A Practical Example

Consider a Singapore-incorporated precision engineering company, “Precision Test Pte Ltd”, that performs wafer testing and assembly for a fabless semiconductor design house based in the United States. The US principal is not GST-registered in Singapore. Under the goods movement, wafers are shipped to Precision Test’s Singapore facility, tested and packaged, then exported directly to the principal’s customers in Taiwan and South Korea.

Without ACMT approval, Precision Test would, in principle, need to account for output GST on its testing and assembly fee, and separately manage import GST on the consigned wafers at each shipment. With ACMT CM approval, Precision Test can disregard the value-added supply (since the tested goods are exported), enjoy import GST suspension on the consigned wafers, and claim input tax on any local purchases made on the principal’s behalf. The net effect is improved cash flow and one less GST compliance headache on every shipment cycle.

How to Apply for ACMT Approval

Applications are made directly to IRAS, and the paperwork is more substantial than a standard GST registration. You will need to submit:

• GST F14A (Application for ACMT Scheme as an Approved Contract Manufacturer) together with the ACMT CM Pre-Application Checklist, or GST F14B (Application as an Approved Logistics Company);
• Your latest annual audited financial statements, with an unqualified external auditor’s opinion;
• A description and illustration of each business arrangement with your overseas clients, including the proportion of goods exported;
• If in the biomedical industry, a copy of your valid Good Manufacturing Practice (GMP) certificate and/or the Health Sciences Authority’s notification letter for auto-renewal of your manufacturer’s licence, where applicable; and
• Any other documents stipulated in the application form.

Critically, applicants must also either complete a self-review under the Assisted Self-Help Kit (see our guide to the GST Assisted Self-Help Kit (ASK)) and submit a certified ASK declaration form (certified by an Accredited Tax Practitioner or Accredited Tax Advisor with the Singapore Chartered Tax Professionals), or commit to, or already participate in, the Assisted Compliance Assurance Programme (ACAP). This compliance gate is not a formality; IRAS treats ACMT as a higher-trust scheme and expects applicants to demonstrate GST control robustness before, not after, approval.

Compliance Obligations Once Approved

Approval is not a one-off event. ACMT-approved businesses appear on IRAS’s published list of approved persons and are expected to maintain the underlying conditions on an ongoing basis, including:

• Continuing to satisfy the “overseas client” test for each relevant customer relationship;
• Maintaining supporting documentation for goods movements, particularly evidence of export or delivery to another approved party;
• Where self-disposal of failed or excess production is involved, obtaining and retaining the Comptroller’s prior written confirmation, along with details of the destruction or disposal process; and
• Ongoing participation in ASK annual reviews or ACAP, as applicable, to retain approved status.

Businesses that cease to meet the conditions, or whose overseas client relationships change so the OVR pay-only test no longer holds, should reassess promptly rather than waiting for an IRAS audit to surface the gap. Manufacturers dealing with other sector-specific GST treatments, such as those our guide to the GST treatment of BCRS deposits covers for beverage manufacturers, will recognise the same pattern: a narrow, industry-specific scheme layered on the general GST regime.

Is ACMT Right for Your Business?

ACMT is a narrow but valuable scheme. If you are a semiconductor, printing or API manufacturer processing goods that genuinely belong to an overseas client who is not (or only nominally) GST-registered in Singapore, the cash flow and administrative benefits can be significant, particularly where MES does not fit because your company never owns the goods it processes. Getting the eligibility test right at the outset, and keeping the ASK or ACAP compliance overlay current afterwards, matters as much as the initial application.

Singapore’s GST scheme landscape rewards businesses that take the time to structure correctly and keep good records, which in turn supports sound financial planning and investment decisions for the business as a whole. For manufacturers weighing up ACMT, MES, or a combination of the two, professional advice at the structuring stage is well worth the investment, and staying current with Singapore business news on GST scheme updates helps keep that structuring decision current.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

The Editorial Team, Raffles Corporate Services