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May 20, 2024
2024-1023

Singapore Revenue Authority announces GST InvoiceNow requirement

The Inland Revenue Authority of Singapore (IRAS) announced on 15 April 2024 the adoption of InvoiceNow, which will allow Goods and Services Tax (GST)-registered businesses to transmit invoice data directly to the IRAS using InvoiceNow solutions.

Phased adoption

To allow sufficient lead time for businesses, the IRAS GST InvoiceNow Requirement will be implemented by the IRAS in a calibrated and progressive manner, as follows:

  • From 1 May 2025, a soft launch for early adoption will allow all existing GST-registered businesses to transmit invoice data voluntarily to the IRAS using InvoiceNow solutions via the InvoiceNow network.
  • From 1 November 2025, the system will be compulsory for newly incorporated companies that voluntarily register for GST. Newly incorporated companies refer to those incorporated within six months from the time they submit their application for GST registration.
  • From 1 April 2026, the system will be compulsory for all new voluntary GST-registrants, regardless of their incorporation date.

The GST InvoiceNow Requirement will be implemented as an additional condition for voluntary GST registration.

Exclusions

The following groups of businesses will be exempted from the GST InvoiceNow Requirement:

  • Overseas entities (including overseas vendors that are registered under the Overseas Vendor Registration regime)
  • Businesses registered under the Reverse Charge regime1

Transmission of invoice data

Businesses under the GST InvoiceNow Requirement are required to transmit to the IRAS invoice data relating to the following types of transactions:

  • Standard-rated supplies (excluding reverse-charge supplies)
  • Zero-rated supplies
  • Standard-rated purchases on which input tax claims are made or will be made (excluding reverse-charge purchases)

For point-of-sale supplies data and petty cash purchases data, businesses may choose to aggregate the transactions before transmitting to the IRAS.

Invoice data must be transmitted to the IRAS at the earlier of:

  • The date on which the relevant GST return2 is filed
  • The filing due date of the relevant GST return

In general, if the customer has adopted InvoiceNow, the supplier can activate the feature when the supplier transmits the invoice data to the customer via the InvoiceNow network to have the same invoice data transmitted automatically to the IRAS.

If the customer has not adopted InvoiceNow and the invoice data cannot be transmitted to the customer via the InvoiceNow network, the supplier will have to collate and transmit the invoice data to the IRAS separately.

GST returns

Notwithstanding the introduction of InvoiceNow, the IRAS would expect GST-registered businesses to continue preparing and filing their GST returns within the stipulated deadline.

GST-registered businesses would need to continue to adhere to the recordkeeping requirements, which remain unchanged. The adoption of the GST InvoiceNow Requirement does not preclude GST-registered businesses from having to comply with the mandatory GST recordkeeping requirements.

Infocomm Media Development Authority (IMDA) and IRAS support

By May 2025, the IMDA will publish the list of InvoiceNow solutions that are connected to the IRAS.

To help businesses defray the cost of adopting and utilizing InvoiceNow, the IMDA has introduced a variety of grants, such as the LEAD Connect & Transact Grant and InvoiceNow Transaction Bonus.

Using the IMDA's preapproved e-invoicing solution, providers may also be eligible to apply for the Productivity Solutions Grant for IT solutions and equipment, including InvoiceNow solutions.

The IMDA and IRAS are currently reviewing the need for further support and measures to ease tax compliance and will provide more details when available.

Key considerations

Businesses wishing to adopt InvoiceNow and transmit invoice data automatically to the IRAS from May 2025 should commence the preparation process early. To be ready for GST InvoiceNow Requirement, companies may now consider taking the following actions:

  • Run current state assessment of readiness for people, processes and systems; highlight any gaps and develop plans in line with anticipated regulatory changes.
  • Ensure data quality and availability by focusing on master data and tax determination and automating processes as much as possible, with minimal or zero manual interventions. (The invoice data sent to the IRAS should be accurate and complete to avoid penalties.)
  • Determine the most suitable InvoiceNow technology solution for the business, such as procuring ready-made InvoiceNow solutions that enable transmission of invoice data to the IRAS or configuring in-house ERP systems to be InvoiceNow-ready and able to connect to the IMDA preapproved access point for transmission of invoice data.

Conclusion

The GST InvoiceNow Requirement has been brewing for some time and is aligned with recent e-invoicing developments in the ASEAN region.

The InvoiceNow system provides an opportunity for GST-registered businesses to overhaul their GST compliance by streamlining their processes, thus reducing errors and costs and improving cashflow management. This focus on accuracy and efficiencies would allow GST-registered businesses to focus on core priorities while ensuring compliance with the GST requirements.

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Endnotes

1 For details, see the IRAS e-Tax Guide, "GST: Reverse charge (Sixth Edition," available here.

2 A relevant GST return means the GST return with an accounting period pertaining to the time of supply of the invoice issued or the date shown on the supplier's tax invoice.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Solutions LLP (Singapore)

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
 
 

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