As a business owner, understanding the Singapore tax invoice requirements are crucial regardless of your business type and operations scale. These documents are an essential part of an organization’s bookkeeping procedures.
Also, they’ll help your business file taxes and claim tax refunds. While invoices are a great addition to any business, there are many things to learn about how they are handled – especially when dealing with tax invoices.
Are you a business owner in Singapore interested in learning more about Singapore tax invoices? You’re at the right place. This article will reveal all the essential Singapore tax invoice details you need to know.
What is an Invoice?
An invoice is a legally binding document businesses issue to customers to request payment for goods and services.
There are different invoice formats, but in most cases, the document will contain information about the cost of the product or service sold, the product or service code, the name of the customer, the billing address of the customer, the name and address of your business, invoice number, and so on.
An invoice will improve your interactions with customers. They’ll be correctly informed of their payment obligations. Also, invoices are great tools for settling disputes with customers.
Let’s say you have a customer who wants a particular product replaced. The invoice presented by the customer will serve as evidence to prove that he/she previously got the product from you.
Difference Between Singapore Tax Invoice and Normal Invoice
There are notable differences between a Singapore tax invoice and a retail invoice. They include the following:
Goods and Services Tax (GST) Number
The Goods and Services Tax is an indirect tax that the Inland Revenue Authority of Singapore (IRAS) levies on goods and services. This tax is also levied on the importation of goods.
GST is a tax charged on the sales price of a good or service. The current GST rate for businesses in Singapore is 7%. A GST registration number added to tax invoice is required by IRAS for GST registered businesses.
A Singapore tax invoice is issued to customers with the Goods and Services Tax number, while a retail invoice will not have one.
The content of a tax invoice is most likely to contain the same details as a retail invoice, including the name of the buyer and seller, the billing address of the buyer and seller, the receipt number, and so on.
A retail invoice is a duplicate document. As a result, only two copies will be made – one for the buyer and the other for the issuer.
Purpose Of the Invoice
The main purpose of a Singapore tax invoice is to take advantage of tax credit or any tax returns that a business may be eligible for. But a retail invoice is designed to keep track of goods and services sold by the company. It helps with financial accounting and record-keeping.
Businesses can only issue Singapore tax invoices when they are GST registered. As a GST-registered company, you’ll serve as an indirect collecting agent for the IRAS.
What are the Contents of a Singapore Tax Invoice?
As a business owner, if you’re interested in designing a Singapore tax invoice for your company, it should contain the following information:
- Invoice number
- Name of the buyer
- Name of the seller
- Invoice issuance date
- Billing address of the seller
- Billing address of the buyer
- Quantity of items purchased
- Description of items purchased
- Amount of tax charged
- Price of each item
- Tax identification number
- GST charges
- Total cost
- Signature of any relevant parties
When Should You Issue a Tax Invoice?
If you’re a GST-registered company dealing with a customer that has a valid GST registration, you must issue them a Singapore tax invoice. According to IRAS regulations, you’re expected to issue a GST tax invoice within 30 days of completing the transaction.
Your customers will use the GST invoice to prove their tax input compliance to government authorities. If your customer doesn’t have a GST registration, you still need to issue them a Singapore tax invoice as stipulated by IRAS guidelines.
How Can We Help?
It can be tough to account for tax and create Singapore tax invoices while focusing on other business operations. As a result, many businesses find it difficult to keep up with IRAS regulations.
Don’t wait till the IRAS sanctions you before paying attention to your tax invoicing. You can hire us to do all the heavy lifting for you. SJH Advisory is an accounting and business consultancy firm that has a team of top business professionals.
We are passionate about ensuring that all our services will support your company’s long-term growth, providing our clients with high-quality, affordable professional advice on all corporate issues, including the Singapore tax invoice process.
Singapore Tax Invoice - Frequently Asked Questions
A tax invoice and a normal invoice have many similarities. However, the tax invoice will contain details about the Goods and Services Tax.
According to the IRAS, GST registered businesses are required to issue tax invoices/customer accounting tax invoices for the standard-rated supplies.
If the total amount payable for your supply (including GST) does not exceed $1,000, businesses may issue a simplified tax invoice instead.