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A Detailed Guide On Tax Invoices In Singapore

A Detailed Guide on Tax Invoices in Singapore

Every Singapore business must take its record-keeping seriously. Record-keeping through receipts, regular invoices, and tax invoices is crucial to let business owners understand how their business is faring. While receipts and invoices are common tools most businesses use, some may still yet to fully grasp how to work their way around tax invoices. If you fall into this category, this piece is meant for you. This piece will provide essential details on how businesses can handle their tax invoice Singapore.

What Are Tax Invoices in Singapore?

Before going on to define tax invoices, the first thing you need to understand is that these invoices are usually issued by GST- registered businesses. These invoices allow them to levy goods and services tax on their products, making it easier for them to account for these taxes and file them to the government.

Simply put, a tax invoice is issued when selling a taxable amount of goods and services. To issue a tax invoice, you must register with the Singapore government and be prepared to file your returns periodically. When creating a tax invoice, you must include certain essential details such as the quantity of the goods and services sold, the payable tax amount, the description of goods and services, and their respective value. A tax invoice is essential when buying goods for resale because it allows you to claim tax credits if you are a GST-registered business.

What Are the Differences Between a Normal Invoice and a Tax Invoice?

It’s essential to note a normal invoice and a tax invoice are similar. However, they still have notable differences. The following table will reveal the differences between each document.

 

Tax Invoice

Normal Invoice

Definition

This is an authorized bill issued to purchasers that’s recognised by the IRAS. It shows the payable tax amount.

This is a document that’s sent from companies to its customers to show the total amount that customers are expected to pay for their goods and services.

Content

It shows the total payable amount for goods and services, including the value of the goods and services tax as well as other required information by IRAS.

It shows the total payable amount for goods and services, and does not show GST related information.

Parties Involved

A GST-registered business issues a tax invoice to customers.

Businesses issue invoices to customers.

Objective

It summarises the outstanding amount on a taxable sale and can also be used to claim tax relief, or tax credit.

It’s used to indicate the amount owed by the customers of a business.

How Does a Tax Invoice Work?

As mentioned earlier, a tax invoice is a compulsory invoice that helps business owners support their tax claims. According to the Inland Revenue Authority of Singapore (IRAS), businesses are expected to maintain proper records of tax documents they issue to customers and those they receive from suppliers. You must keep all tax documentation related to your business for a minimum of five years. However, ensure not to submit tax documents when filing your goods and services tax returns.

When Should You Issue Your Tax Invoice?

Now, you need to understand the importance of a tax invoice. But when are you expected to issue this type of invoice?

IRAS stipulates that GST-registered businesses are expected to issue a tax invoice within 30 days of completing the sale.

You’re not expected to charge goods and services tax on your products or services if you are not GST-registered with the IRAS. If you fall into this category, your invoices should not contain any tax details.

How To Calculate GST for Tax Invoices?

The next thing to do is to learn how to calculate GST on your tax invoices. You must be able to properly calculate the value of your GST to determine the amount you need to add to the price of your goods and services.

If a total invoice amount (including GST) is less than $1,000, you may issue an abridged tax invoice. In this scenario, you are not expected to send a regular tax document. An abridged tax invoice or simplified tax statement contains the following details;
● The name of the supplier
● GST registration number
● The business address
● The issue date of the invoice
● The identification number of the invoice
● An accurate description of the goods and services that you’re selling
● Total amount due, including goods and services tax
● A statement similar to “price payable includes GST”
● Additional comments or notes

How Premia TNC Can Help

According to IRAS, GST-registered businesses are expected to create a tax invoice that they will issue for the sale of standard-rated goods and services to their customers. However, it can be relatively difficult to handle details relating to goods and services tax while dealing with your day-to-day operations. In this type of scenario, you may need additional help to ensure that you don’t fall short of government regulations. That’s where we come in.

Premia TNC is an expert at handling GST-related details. We’ll ensure that your business is able to properly manage its goods and services tax, with experts to assist your business with GST registration, tax invoice, and filing quarterly returns.

FAQs

How to issue a tax invoice in Singapore?

If you meet the necessary requirements, the first thing to do is register with IRAS as a GST business. Next, you can create an invoice that contains information on the tax payable amount for your goods and services.

What is the Goods and Services Tax?

In Singapore, the goods and services tax is a levy that’s charged on taxable goods and services.

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