Transcription
Sarah, it's great to see you. How's business?
It's going well. I was very busy last week collating documents for my GST audit with Iris. How about you?
Oh, my business had a similar experience, but not anymore since we started using Invoice Now. Have you heard about it?
Invoice now? Tell me more.
Our business has benefited greatly from Invoice Now. It has streamlined our invoicing process too. Let me share more.
Invoice now is Singapore's nationwide e-invoicing network. It enables seamless transmission of e-invoices and other e-documents securely in standard digital format across different accounting and finance solutions between suppliers and customers. Just to be clear, sending PDF invoices by email is not e-invoicing.
Invoice now operates on the PEPPOL standard, an open standard used by many countries worldwide. In Singapore, IMDA is our PEPPOL authority.
When businesses adopt Invoice now, they enjoy simplicity in using a single solution for all their invoicing needs. Whether it's for business partners or government entities, this eliminates the need for multiple systems or processes. Businesses can also improve their business efficiency. As a supplier, you can issue invoices faster directly from your billing system. And as a buyer, the invoice data goes straight into your accounting solution, reducing manual data entry and associated errors. In addition, businesses enjoy reliability as invoices are transmitted securely through the Invoice now network, minimizing the risk of loss or compromise.
Finally, when GST-registered businesses leverage Invoice now for tax administration, they can expect shorter audit turnaround. As you know, businesses are asked to submit invoice data to IRAS from time to time. This can be a resource-intensive process for many businesses, especially small businesses, as it could involve manual identification, retrieval, and submission of voluminous invoices from their systems or hard copy record books. With Invoice now, businesses can seamlessly transmit their invoice data to IRAS, allowing audits to be concluded faster. Businesses claiming GST refunds may also receive refunds earlier if assessed to be of lower risk. Some solution providers also allow businesses to receive alerts for wrongful GST charges from non-GST registered suppliers, removing the risk of incorrect claims.
To support the nationwide e-invoicing initiative, IRAS is implementing the GST Invoice now requirement. This also aligns with its ongoing transformation efforts to digitalize with the wider ecosystem and integrate tax into taxpayers' accounting and payroll systems. Progressively, GST-registered businesses are required to use Invoice now-ready solutions to send invoice data to IRAS. Invoice now-ready solutions are accounting and finance solutions that allow transmission of invoice data between businesses via the Invoice now network. These solutions can be purchased off-the-shelf or be customized specifically in the form of in-house enterprise solutions to support businesses in the transition.
IRAS has introduced a phased implementation approach for the GST Invoice now requirement. A soft launch beginning on 1st May 2025 allows non-mandatory participation from existing GST-registered businesses and any other businesses applying for GST registration on or after 1st May 2025. These businesses can choose to become early adopters and start transmitting invoice data to IRAS using Invoice now-ready solutions via the Invoice now network following the soft launch. From 1st November 2025, newly incorporated companies that apply for voluntary GST registration will be required to implement the GST Invoice now requirement. This applies to companies that are incorporated within 6 months from the time they submit their application for GST registration. From 1st April 2026, any business that applies for voluntary GST registration, regardless of incorporation date or business constitution, will be required to implement the GST Invoice now requirement. There are plans to progressively extend mandatory participation to new compulsory GST registrants and the remaining GST-registered businesses. IRAS will continue to consult industry partners and carefully review the feedback received before announcing further details.
If you belong to one of the following groups of businesses, you are excluded from the GST Invoice now requirement: Overseas entities, including overseas vendors that are registered under the overseas vendor registration regime, or businesses liable to register for GST wholly due to the reverse charge regime.
It sounds like I should get my business on board to adopt the GST Invoice now requirement, especially when there are so many benefits from being on Invoice now. So, how do I get started?
There are three steps to onboard Invoice now. First, you need to check with your software provider if your accounting or finance solution is Invoice now-ready. If your business is currently using an off-the-shelf accounting or finance software solution, or if you are planning to purchase one, check whether your preferred solution is on IMDA's list of accredited Invoice now-ready solution providers, or IRSP for short. For large enterprises using their own in-house enterprise solutions, you may get in touch with an IMDA-accredited Access Point provider, or AP for short, to get connected to the Invoice now network. If your business is not currently using an accounting or finance solution, you may consider adopting free solutions with basic Invoice now capabilities.
Now, let me break down the potential costs for you. For businesses already using an Invoice now-ready solution, there's no additional setup cost to onboard Invoice now. If your business has not started to use an Invoice now-ready solution, there could be some setup costs if you decide to purchase compatible software. However, you could apply for the Productivity Solutions Grant, which offers up to a 50% subsidy to help offset these fees if you are eligible. Alternatively, there are free Invoice now-ready solutions that might meet your needs. You can access the list of these solutions from IMDA and IRAS's websites. Businesses using their own in-house enterprise solutions may need a budget for a one-time integration cost to connect to an AP and annual support fees.
The next step will be to approach your IRSP and/or an AP to register your business for Invoice now. Upon successful registration, you will be issued with a PEPPOL ID. Finally, you will need to ensure that your business can transmit invoice data successfully to IRAS. If your business uses an off-the-shelf software solution, you can simply enable the GST Invoice now submission feature and test the invoice transmission. Your IRSP can assist you in this. As the solution's design varies across IRSPs, you should check with your IRSP on how you will be alerted if your invoice data submission is successful. Businesses using in-house enterprise solutions should work with their AP to connect to IRAS via Application Programming Interface, or API. Enable the GST Invoice now submission feature and test the invoice transmission. They should receive transaction reports from their AP to notify them if the invoice data submission is successful.
Thanks, John, for walking me through the steps for onboarding Invoice now, but how exactly does the invoice data get transmitted to IRAS?
To transmit invoice data to IRAS, the Invoice now-ready solutions will be connected to IRAS through Access Points. This connection enables the transmission of invoice data to IRAS via API. IRAS receives a copy of the data in two scenarios: Whenever businesses issue or receive invoices via the Invoice now network, and whenever they record other invoices into the Invoice now-ready solutions.
There are four types of submissions of invoice data to IRAS encompassing sale and purchase transactions both within and outside the Invoice now network. Let's go into the details.
The Type 1A submission consists of a sale transaction made by the supplier within the Invoice now network, where both the GST-registered supplier and customer are connected to IRAS via the Invoice now network. Let's say Company A provides consultation services to Company B and issues an invoice to Company B upon the completion of the service. Here's how the information will be transmitted to IRAS: Company A issues a PEPPOL invoice to Company B using its Invoice now-ready solution via the Invoice now network. The invoice is sent to Company A's Access Point. IRSPs that have built validation checks on wrongful GST charges would detect invoices from suppliers that wrongly charged GST and trigger an alert to the supplier for his attention. Company A's Access Point forwards the invoice data to Company B's Access Point. Once the invoice data is successfully sent to Company B's Access Point, a copy of the PEPPOL invoice will be transmitted to IRAS automatically. Company B's Access Point then forwards the invoice to Company B. This is known as the PEPPOL submission method, as a copy of the invoice data is automatically transmitted to IRAS when the PEPPOL invoice is routed from the supplier to the customer through the network.
What does Company B do with the purchase invoice then?
Good question. Well, Company B will also need to transmit the purchase invoice data to IRAS. This is the Type 1B submission, which is the corresponding purchase transaction received by the customer within the Invoice now network. Invoice data will be transmitted to IRAS in the following manner: After Company B receives the invoice, Company B validates and accepts the invoice in its solution. This would include indicating the appropriate GST category codes for purchases, the taxable purchase amount, and the amount of input tax that Company B wishes to claim, which is what businesses typically do when they record their purchases in their accounting system. A copy of the recorded purchase invoice is transmitted to IRAS by way of a solution-extracted invoice through Company B's Access Point. This is known as the solution-extracted submission method, as a copy of the invoice data is extracted from the Invoice now-ready solution and transmitted to IRAS when the invoice is recorded in the solution.
I see. I now understand the invoice data submission process when both supplier and customer are on the Invoice now network, but my company operates retail stores and our sales transactions are recorded via point-of-sale systems. Do we have to transmit such invoice data to IRAS?
Yes, you would still need to. This is known as the Type 2 submission, where the customer is not on the Invoice now network, or transactions are made using point-of-sale systems, or simplified tax invoices are issued. Here's how the information will be transmitted to IRAS: As the supplier, you'll issue your paper or PDF invoice to the customer and record the supplied transaction in your Invoice now-ready solution. A solution-extracted invoice is submitted to your Access Point, which then transmits the solution-extracted invoice to IRAS.
Finally, a Type 3 submission consists of a purchase transaction made outside the Invoice now network. This applies when your GST-registered supplier is not on the Invoice now network, or where the transactions involve petty cash purchases. Invoice data will be transmitted to IRAS in the following manner: As the customer, you will receive your paper or PDF invoice from your supplier and record the purchase transaction in your Invoice now-ready solution. IRSPs that have built validation checks on wrongful GST charges would detect invoices from suppliers that wrongly charged GST and trigger an alert to you. You would be able to avoid wrongly claiming input tax on such transactions. After you record the purchase transaction, a solution-extracted invoice is submitted to your Access Point. Your Access Point transmits the solution-extracted invoice to IRAS.
I see. So, Type 1A and 1B submissions are made when the supplier and customer are both on Invoice now. And Type 2 and Type 3 submissions are made when one party is not on Invoice now. But do I need to submit all my invoice data to IRAS? Are there certain types of invoice data that I can exclude?
The types of invoice data to be transmitted consist of transactions that are reported in the GST return. These include standard-rated supplies, zero-rated supplies, exempt supplies, standard-rated purchases, and zero-rated purchases. Certain invoice data does not need to be transmitted to IRAS. These are transactions that are not reported in the GST return, such as out-of-scope supplies and non-reportable purchases, which include purchases from non-GST registered suppliers and disallowed input tax claims. Other transactions that can be excluded are those that have no underlying supplies or purchases but are reported solely for GST purposes, such as deemed supplies, or the value and timing of invoice data to be submitted to IRAS are difficult to determine, as seen in the supplies of financial services.
Let's take a look at the example of ABC Private Limited to see what types of transactions it needs to transmit to IRAS. ABC Private Limited is a multinational corporation that has various business arms in manufacturing and supplying electronic products to customers in Singapore and around the region. It also provides repair services for its products, receives interest income from its bank deposits, and owns several residential properties in Singapore that it leases out to receive rental income.
Whenever ABC Private Limited supplies its goods and repair services to customers in Singapore, it charges GST at the prevailing GST rate to customers. Invoice data on such standard-rated supplies must be transmitted to IRAS. ABC Private Limited also sells and exports its goods from Singapore to overseas and provides repair services to overseas customers on goods that will be exported back to the overseas customer. Invoice data for zero-rated supplies such as export sales of goods and provision of international services should also be transmitted to IRAS. However, goods exported to ABC Private Limited related parties without sales, as well as any exempt financial services that qualify for zero rating, can be excluded. This is because there is either no underlying supply or purchase, or the value and timing of invoice data to be submitted to IRAS is difficult to determine.
For exempt supplies, the scope of invoice data to be transmitted includes the sale and lease of residential properties and local sale of investment precious metals. This means that ABC Private Limited must transmit invoice data on the rental income it receives from leasing out its unfurnished residential properties. ABC Private Limited need not transmit invoice data on all exempt financial services, such as the interest income it receives from its bank deposits.
On the purchase side, ABC Private Limited will also need to transmit invoice data for its standard-rated and zero-rated purchases. Some examples of standard-rated purchases are purchases where input tax is claimed, such as when ABC Private Limited buys parts from GST-registered suppliers to perform its repair services, and when ABC Private Limited claims GST on staff expenses that meet the input tax claiming conditions. Zero-rated purchases such as transport services to export goods from Singapore to overseas should also be transmitted to IRAS.
ABC Private Limited also makes out-of-scope supplies from the export of manufactured goods from Japan to the United Kingdom. Such supplies, which are not reported in the GST return, do not need to be submitted to IRAS. As for purchases, all non-reportable purchases such as purchases from non-GST registered suppliers and disallowed input tax like motor car expenses are also excluded from being transmitted to IRAS.
Nonetheless, businesses may opt to transmit invoice data for all their transactions, including those that are not required, if doing so eases their compliance burden. Such businesses should work with their IRSPs, if applicable, or APs to enable this. As it may not be feasible for you to submit certain invoice data on a transactional basis, you can choose to aggregate these transactions on a regular basis before transmitting to IRAS: supplies made via point-of-sale or POS systems, supplies where simplified tax invoices are issued, even if they are not generated from POS systems, and petty cash purchases.
I see. Well, is there a due date to transmit the invoice data to IRAS?
Invoices submitted under the Type 1A PEPPOL submission method are transmitted to IRAS automatically when the PEPPOL invoice is routed from the supplier to the customer through the Invoice now network. For solution-extracted invoices in the other three submission types, as well as for aggregated invoice data, you should make the submissions on a regular basis, such as daily or weekly, before the submission due date. Since the invoice data is not transmitted automatically, the due date for transmitting it to IRAS is the earlier of the date on which the relevant GST return is filed or the filing due date of the relevant GST return. The relevant GST return refers to the GST return covering the prescribed accounting period when the date of the transaction occurs. The date of transaction is determined as follows: For supplies data where an invoice is or is required to be issued, the date of transaction would be the issuance date of the document. And for all other supplies, the date of transaction would be the date the transaction is posted into the accounting system. For purchases data, where the supplier's invoice is received, the date of transaction would either be the issuance date of the document or the date the transaction is posted into the accounting system. For all other purchases, the date of transaction would be the date the transaction is posted into the accounting system.
For example, my company issues a tax invoice to customer A on 20th March and receives payment from customer A on 10th April. The company files its GST return for the accounting period covering 1st January to 31st March on 20th April. Since the invoice issuance date falls within the accounting period from 1st January to 31st March, my company is required to submit the invoice data to IRAS by 20th April, which is the date the company files its GST return. In comparison, customer A files its GST return for the accounting period 1st January to 31st March late on 15th May. Customer A needs to send the purchase data to IRAS by 30th April, which is the filing due date of the relevant GST return.
What happens if I need to adjust the invoices that I have issued? Do I need to submit a new invoice to IRAS?
It depends. If the adjustments affect the taxable value and/or GST amount, for example, changing from a zero-rated supply to a standard-rated supply, you will need to issue a credit note and a new invoice where applicable. Invoice data on both the credit note and new invoice need to be transmitted to IRAS. If you receive credit notes from your suppliers, you will need to receive, validate, and accept the credit note in your solution. The credit note data will then be transmitted to IRAS. If the adjustments do not affect the monetary values on the invoice or credit note, for example, changing the GST category code from zero-rated supply to Regulation 33 exempt supply, you may resubmit the revised invoice or credit note to IRAS by using the same document UUID contained in the original invoice. IRAS will regard the last invoice or credit note you submitted to be the latest submission.
Thanks for the explanation on adjusting my invoices. I have another question as I invoice some of my customers in US dollars. Is there anything that I need to look out for when issuing invoices or credit notes in foreign currency?
Well, yes. You should be aware that under the existing GST rules, you need to convert three fields: One, the invoice total without GST. Two, invoice total with GST. And three, the total GST amount in Singapore dollars using approved exchange rates for GST-registered businesses. Do remember that you will also need to indicate the invoice currency code (for example, US dollars) and the tax currency as SGD in the invoice or credit note. For guidance on other GST scenarios, invoicing requirements, and mandatory invoice data elements to be submitted to IRAS, you can refer to the e-Tax Guide: Adopting GST Invoice Now Requirement for GST-Registered Businesses.
Thank you for sharing your experience, John. I am now equipped to get my business ready for the GST Invoice now requirement.
You're welcome. You should adopt the GST Invoice now requirement early to start enjoying the benefits of Invoice now. Start your planning early, as upgrading your accounting or finance solutions can be a major undertaking which requires sufficient lead time and effort. Stay ahead of the curve. Work with your IRSP or AP today. For more information, please visit the IRAS website.