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For GST-registered businesses

Two common documents used in billing customers are tax invoices and credit notes.

On this page:
Tax Invoice 
     When to issue a tax invoice
     Information required on a tax invoice
     Invoicing in a foreign currency     
     Issuing invoice for an exempt supply of investment precious metals 
     Calculating GST on invoices
     Simplified tax invoice for amounts ≤ $1000
 Receipts
 Credit note
     Information required on a credit note
     Can I not make adjustments to the GST amount?
Self-billing

Tax invoice

A tax invoice is the primary evidence to support an input tax claim. It contains information on what is being sold and the respective GST charged and can be used in place of a commercial invoice.

You must retain the tax invoices issued to your customers, as well as those received from your suppliers for at least five years. You are not required to submit these tax invoices with your GST returns.

When to issue a tax invoice

A tax invoice must be issued when the customer is a GST registered person so that the latter can use it as a supporting document to claim input tax on the standard-rated purchases. In general, it is to be issued within 30 days of the time of supply. A tax invoice need not be issued for zero-rated suppliesexempt supplies and deemed supplies or to non-GST registered customer.

Information required on a tax invoice

Tax Invoice

Where applicable, the tax invoice must also show a breakdown of exempt, zero-rated, or other supplies and state the respective gross amount payable separately.

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Invoicing in a foreign currency

When you invoice a local sale in a foreign currency, the following items on the tax invoice must be converted into Singapore dollars using approved exchange rate for GST purposes (224KB):

  • Total amount payable excluding GST;
  • Total GST payable; and
  • Total amount payable including GST.

Issuing invoice for an exempt supply of investment precious metal

An invoice must be issued for an exempt supply of investment precious metal (IPM). Please refer to GST: Guide on Exemption of Investment Precious Metals (IPM) (224KB) for the list of information required on the invoice issued for an exempt supply of IPM.


Calculating GST on invoices

The total GST payable on all goods and services shown on a tax invoice may be rounded off to the nearest whole cent (i.e. two decimal places). With the discontinuation of the issuing of 1 cent coins, some businesses may round their bills to the nearest 5 cents to facilitate cash payment by their customers. Whether a bill should be rounded up or rounded down to the nearest 5 cents is a business decision.

When a tax invoice contains several line items of standard-rated supplies, the total GST amount on your invoice may be computed based on:

  • Summing the GST amount for each line item; or
  • Total amount payable (excluding GST) for all line items x 7%

The total GST amount computed may differ due to the method used. Both methods of computing the total GST amount are acceptable so long as you apply the chosen method consistently.

Example:

You are a stationery retailer. Your customer purchased 3 pens and pay for all her items collectively. The tax invoice issued to your customer will contain the following 3 line items.

 

Item Amount payable (excluding GST) GST amount for each item
Green pen $ 1.33  $ 0.09
Red pen  $ 1.33  $ 0.09
Blue pen  $ 1.33  $ 0.09


Method 1: GST is computed based on summing the GST amount for each line item:
Total GST amount = $0.09 + $0.09 + $0.09 = $0.27

Method 2: GST is computed based on total amount payable (excluding GST) for all line items X 7%
Total GST amount = ($1.33 + $1.33 + $1.33) X 7% = $0.28

You may compute the total GST amount using either method so long as you apply the chosen method consistently.

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Simplified tax invoice for amounts ≤ $1000

If the total amount payable for your supply (including GST) does not exceed $1,000, you may choose to issue a simplified tax invoice instead of a tax invoice. As compared to a tax invoice, less information is required to be shown on a simplified tax invoice e.g. customer’s name is not required.

A simplified tax invoice only needs to contain the following information:

  • Your name, address and GST registration number;
  • Date of issue of invoice;
  • An identifying number (e. g. invoice number);
  • Description of the goods or services supplied;
  • Total amount payable including GST; and
  • The words "Price payable includes GST".

You may issue a sales voucher to your customer (i.e. the credit cardholder) when accepting payment by credit card. The sales voucher can double up as a simplified tax invoice if it contains details similar to those required in a simplified tax invoice.

Receipts

You may choose to issue a receipt instead of a tax invoice to your non-GST registered customer. Receipts can be used as proof of your income transactions and must be serially numbered, with a duplicate copy to be retained.

Since July 2003, businesses are no longer required to seek approval from IRAS for not issuing receipts. Businesses must however ensure complete and accurate recording of income transactions even if they decide not to issue receipts. There must be a well-documented audit trail to show that all income transactions are correctly recorded and declared for tax purposes. Practices such as using a cash register or accounting software should be maintained to help ensure the proper recording of all income transactions. It should be noted that: 

  • You must still issue receipts to customers (if requested); and
  • GST-registered businesses must continue to issue tax invoices as required under the GST legislation, as the waiver of issuance of receipts is not the same as the waiver of issuance of tax invoices.

When making purchases for business purposes, you should ask for a receipt regardless of the payment mode (e.g. cash or cheque). Receipts serve as proof of payments made.

The details that should be shown in a receipt include:

  • Date of issue of the receipt;
  • Your business name and GST registration number;
  • The total amount payable (including the total amount of GST chargeable); and
  • The words "Price payable includes GST"

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Credit note

A credit note is issued to correct a genuine mistake or to give a credit to your customer under the following situations:

  • correction of a genuine mistake (e.g. goods invoiced as standard-rated which should have been exempt or zero-rated)
  • supply did not take place
  • charges are partly or fully waived before/after delivery of the goods
  • goods or services are accepted, but terms of the contract are not fully met (e.g. sub-standard goods are accepted by the customer at a reduced price)
  • goods are returned or services are not accepted
  • goods and services are supplied for an unconfirmed consideration

Information required on a credit note

To be valid for GST purposes, a credit note must show clearly:

  • an identifying number e.g. a serial number;
  • the date of issue;
  • your name, address and GST registration number;
  • your customer's name and address;
  • the reason for the credit - for example, “returned goods”;
  • a description sufficient to identify the goods and services for which credit is being allowed;
  • the quantity and amount credited for each description;
  • the total amount credited, excluding tax;
  • the rate and amount of tax credited; and
  • the total amount credited, including tax.

The number and date of the original tax invoice should also be shown on the credit note. If you are unable to do so (e.g. because returned goods cannot be identified with a particular tax invoice), you must be able to satisfy the Comptroller of GST by other means that you have accounted for GST on the original supply.

Can I not make adjustment to the GST amount?   

In your credit note, you can choose to not adjust the GST amount charged on the original tax invoice if the following conditions are satisfied:

  1. Both the supplier and the customer have agreed in writing^ not to adjust the original GST amount;
  2. The customer is a fully taxable person (i.e. does not make any exempt supplies); and
  3. The credit note*, which is issued without any tax credit, should contain the statement "This is not a credit note for GST purposes."

^ The written agreement may be in the form of letters or e-mail correspondences between the supplier and the customer instead of a formal contract. Both the supplier and the customer should keep the written agreement as part of their GST records. It need not be submitted to the Comptroller of GST unless otherwise requested.

* If such credit notes are issued by the supplier, both the supplier and customer need not adjust the value of their taxable supplies/ taxable purchases and corresponding output tax/input tax. 
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Self-Billing

Self-billing is a billing arrangement between a GST-registered supplier and a GST-registered customer in which the customer (instead of the supplier) prepares the supplier’s tax invoice and forwards a copy to the supplier.
 
To adopt self-billing, the customer has to satisfy all the conditions stated in the Checklist for Self-Review of Eligibility and Declaration on Use of Self-Billing (100KB).
 
If you (the customer) satisfy all the conditions and would like to adopt self-billing, you need to complete and submit the original checklist to IRAS. You are not required to seek further approval from IRAS and may begin to self-bill from the date of declaration.

For businesses who have previously obtained approval from IRAS to adopt self-billing, you can continue to do so if you still satisfy the conditions stated in the checklist. You need not submit the updated list of suppliers covered by the self-billing arrangement. However, you need to keep and maintain the suppliers list as part of your records. 
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For GST purposes, all currency/ monetary amounts refers to Singapore dollars.

FAQs

All GST-registered businesses should issue tax invoices for sales made to another GST registered business. This is to enable your customer to claim the GST incurred based on your tax invoice. If the value of your supply does not exceed $1000, you can issue a simplified tax invoice with fewer details. However if you are selling to end-consumers who are -not GST registered, you can issue a receipt instead of a tax invoice. A serially printed receipt must be issued for each sale transaction.


You may choose to issue a tax invoice or other form of billing document (e.g. commercial invoice). However, if you do choose to issue a tax invoice for your zero-rated supplies, you need to indicate that GST is charged at 0% on the tax invoice.


 

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Last Updated on 4 November 2013


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