Singapore

Releases updated InvoiceNow FAQs Singapore currently does not require mandatory e-invoicing for B2B or B2G transactions, but taxpayers can issue them voluntarily via the InvoiceNow platform. The InvoiceNow network is based upon the Peppol network (Peppol BIS billing 3.0 standards), though VAT-related rules have been replaced by GST rules. The IMDA strongly recommends e-voicing although it is not mandated. The IMDA (Infocomm Media Development Authority) of Singapore has updated the FAQ related to InvoiceNow, which provides information on what InvoiceNow is, how it differs from PDF e-invoicing, and many other useful details. It is expected that Singapore will mandate the use of the InvoiceNow platform for B2G transactions in the near future , However no specific timeline has been revealed yet.  

Move towards mandatory B2G e-invoicing The Singapore government is making plans to mandate the use of e-invoicing for B2G transactions, according to the speech given on 24th Feb 2023, by Minister of State for Finance and Transport - Hong Tat Chee.    InvoiceNow is a nationwide E-invoicing method that enables the direct delivery of invoices in a structured digital format on the Peppol network, which will also be the default e-invoice submission channel for all government vendors within the next few years.    Tungsten provides Peppol invoice services across many of our compliant markets and will follow closely the updates on the Singapore B2G e-invoicing mandate.    

Updated FAQ for businesses on the GST increase in 2023 The Inland Revenue Authority of Singapore (IRAS) has published an updated FAQ and other guidance following the increase in GST rates from 7% to 8% on 1 January 2023.   Please click here to access these documents. 

Government guidance on the upcoming GST rate increase

On 7 November, the Parliament of Singapore approved the Goods and Service Tax (Amendment) bill passing two GST rises beginning 2023.   

The GST rate increases will be staggered over two stages:    (i) from 7% to 8% with effect from 1 Jan 2023; and   (ii) from 8% to 9% with effect from 1 Jan 2024.   To prepare GST-registered businesses for the first rate change, the government has published the e-Tax Guide: 2023 GST Rate Change: A Guide for GST-registered Businesses, and a set of Frequently Asked Questions supplements the e-Tax Guide.   

GST on imports of low valued goods  As of 1 Jan 2023, Singapore will implement GST on imports of low-value goods and non-digital services. The purpose of taxing low-value goods is to level the playing field between overseas and domestic vendors, also ensuring a fair and resilient GST system.  Overseas suppliers who sell low-value goods (S$400 or less) to customers in Singapore must register GST with Singapore's Overseas Vendor Registration (OVR) if the business:  

• has an annual global turnover exceeding S$1 million; and 
• makes B2C supplies of low-value goods to Singapore exceeding S$100,000.  

For more information, please refer to the e-Tax Guide.  

The upcoming change in GST rate In the Budget 2022, the Minister of Finance in Singapore announced two steps to increase the GST rate:

• from 7% to 8% with effect from 1 Jan 2023.
• from 8% to 9% with effect from 1 Jan 2024.

The IRAS (Inland Revenue Authority of Singapore) stated that the increased revenue from GST will be used to fund healthcare expenditures for seniors in the country. Moreover, the GST treatment for travel arranging services will be updated from 1 January 2023, the basis for determining whether zero-rating applies to a supply of travel arranging services will be updated, to be based on the place where the customer (i.e., the contractual customer) and direct beneficiary of the service belong:

• if the customer of the service belongs in Singapore, the travel arranging service will be standard-rated; or
• if the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the travel arranging service will be zero-rated.

GST changes in Singapore Budget 2021

The Singaporean government has decided that the planned GST increase from 7% to 9% will not take place in 2021. The Finance Minister has however emphasised base GST will need to be raised at some point between 2022 and 2025. This is mainly to support government revenue to fund rising healthcare expenditure.