The Inland Revenue Authority of Singapore (IRAS) announced a significant change on 15 April 2024, introducing the GST InvoiceNow Requirement. This new mandate will allow Goods and Services Tax (GST)-registered businesses to transmit invoice data directly to the IRAS using InvoiceNow solutions.

Overview

InvoiceNow is Singapore’s nationwide e-invoicing network based on the international “Peppol” standard. Launched by the Infocomm Media Development Authority (IMDA) in 2019, InvoiceNow allows businesses to send and receive invoices in a structured digital format, significantly reducing the need for manual processing and recording in accounting systems. This not only streamlines operations but also minimizes errors.

To support this initiative and further digitalize tax processes, GST-registered businesses will be required to use InvoiceNow solutions to transmit invoice data to the IRAS for tax administration. Invoices not issued through InvoiceNow, such as those from point-of-sale systems, must also be recorded in InvoiceNow solutions and sent to IRAS.

This move aligns with global trends, as governments worldwide promote e-invoicing for improved tax administration. The phased adoption of the GST InvoiceNow Requirement follows a successful pilot program conducted by IRAS, IMDA, businesses, and service providers from September 2020 to June 2023.

The phased adoption aims to streamline compliance, reduce errors, and improve efficiency in GST reporting.

Phased Adoption Timeline

The implementation of the GST InvoiceNow Requirement will occur in three phases:

1. Soft Launch for Early Adopters (1 May 2025)

All existing GST-registered businesses can voluntarily transmit invoice data to the IRAS via the InvoiceNow network.

2. Mandatory Adoption for New GST Registrants (1 November 2025)

Newly incorporated companies that voluntarily register for GST must use the InvoiceNow system. This applies to companies incorporated within six months before submitting their GST registration application.

3. Mandatory for All Voluntary GST Registrants (1 April 2026)

All new voluntary GST registrants, irrespective of their incorporation date, must comply with the InvoiceNow Requirement.

This requirement will serve as an additional condition for voluntary GST registration.

InvoiceNow Solutions

InvoiceNow solutions are finance and accounting software that facilitate the transmission of invoices between businesses via the InvoiceNow network. These solutions can be either off-the-shelf products or customized proprietary enterprise resource planning (ERP) systems designed specifically for businesses.

Source: https://www.iras.gov.sg/taxes/goods-services-tax-(gst)

Key Features and Connectivity:

• Connection to IRAS:

InvoiceNow solutions connect to the Inland Revenue Authority of Singapore (IRAS) through Access Points (AP). This connection enables the transmission of invoice data to IRAS using Application Programming Interface (API) technology.

• Automatic Data Transmission:

When businesses activate the feature to transmit invoice data to IRAS, a copy of the invoice data is automatically sent to IRAS whenever businesses issue or receive invoices via the InvoiceNow network. This also applies to invoices recorded into the InvoiceNow solutions.

• List of Approved Solutions:

The Infocomm Media Development Authority (IMDA) will publish a list of InvoiceNow solutions that are connected to IRAS by May 2025.

Support from IMDA and IRAS

By May 2025, the Infocomm Media Development Authority (IMDA) will publish a list of InvoiceNow solutions connected to the IRAS. To support businesses in adopting InvoiceNow, IMDA offers various grants, including:

• LEAD Connect & Transact Grant
• InvoiceNow Transaction Bonus
• Productivity Solutions Grant for IT solutions and equipment

IMDA and IRAS are exploring additional support measures to ease tax compliance and will provide further details in due course.

Exclusions from the Requirement

Certain businesses will be exempt from the GST InvoiceNow Requirement:

• Overseas entities, including those registered under the Overseas Vendor Registration regime.
• Businesses registered under the Reverse Charge regime.

Transmission of Invoice Data

Businesses under the GST InvoiceNow Requirement must transmit invoice data for the following transaction types:

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

For point-of-sale and petty cash transactions, businesses can aggregate the data before transmission. The invoice data must be transmitted to the IRAS by the earlier of the GST return filing date or its due date.

GST Returns and Recordkeeping

Despite the introduction of InvoiceNow, businesses must continue to prepare and file their GST returns within the stipulated deadlines. The existing recordkeeping requirements remain unchanged, ensuring businesses maintain comprehensive documentation for GST compliance.

Key Considerations for Businesses

Businesses planning to adopt InvoiceNow should start preparations early to ensure seamless compliance. Key steps include:

• Assessing Readiness: Conduct a current state assessment of people, processes, and systems. Identify gaps and develop plans to meet regulatory changes.
• Ensuring Data Quality: Focus on master data and tax determination and automate processes to minimize manual interventions. Accurate and complete invoice data is crucial to avoid penalties.
• Choosing Technology Solutions: Decide on the best InvoiceNow solution, whether by procuring ready-made solutions or configuring in-house ERP systems to connect to IMDA’s preapproved access point.

Conclusion

The GST InvoiceNow Requirement aligns with recent e-invoicing developments in the ASEAN region, offering GST-registered businesses an opportunity to enhance their GST compliance processes. By adopting InvoiceNow, businesses can reduce errors, lower costs, and improve cash flow management, allowing them to focus on core priorities while ensuring regulatory compliance.

Share via