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Compliance and Regulations

Singapore's tax compliance evolution

April 23, 2024

In Singapore's dynamic business landscape, staying ahead means embracing digital transformation. The latest milestone in this journey comes from the Inland Revenue Authority of Singapore (IRAS), introducing mandatory phased adoption of InvoiceNow, Singapore's electronic invoicing network based on the Peppol framework, for newly GST-registered businesses. This initiative marks a pivotal shift towards electronic reporting, aimed at enhancing efficiency and bolstering tax compliance.

Since its inception in 2019, InvoiceNow has been revolutionising invoice processing through the Peppol standard. This digital platform empowers businesses to streamline invoicing, accelerate payment cycles and reduce paper usage. With over 60,000 businesses already onboard, InvoiceNow offers a comprehensive suite of services tailored to diverse business needs.

What are the next steps for Singapore’s businesses?

The implementation of InvoiceNow for newly GST-registered businesses will roll out in phases, beginning with a soft launch for voluntary early adoption from May 2025.

From November 2025, newly established companies choosing GST registration must use InvoiceNow to transmit invoice data directly to IRAS for tax administration. Then, starting April 2026, all newly registered GST businesses, whether voluntary or mandatory, will also need to use it. This phased approach ensures a smooth transition, empowering businesses to meet their tax obligations effectively.

Currently, the defined scope of transactions, for which a transmission to IRAS is needed, covers transactions such as standard-rated supplies, zero-rated supplies and Standard-rated purchases on which input tax claims are made or will be made (1). POS transactions or petty cash purchases can be reported as an aggregated report.

Businesses will need to adopt InvoiceNow solutions enabling the transmission of invoicing data to IRAS. By transmitting invoice data directly to IRAS via the InvoiceNow network, businesses can streamline compliance processes, reduce data preparation efforts, and enjoy expedited GST refunds. Additionally, InvoiceNow equips businesses with features like alerts for wrongful GST charges from non-GST registered suppliers, ensuring accuracy and compliance from the outset.

The phased adoption of InvoiceNow follows a successful pilot phase, showcasing its efficacy in enhancing tax reporting processes. As IRAS continues to consult industry partners, businesses can leverage support from both IRAS and the Infocomm Media Development Authority (IMDA) in their adoption journey.

Business’ support by IMDA

As outlined in previous blogs, IMDA has introduced a variety of incentives to encourage Singapore businesses to transition to digital processes, such as LEAD Connect & Transact for large businesses and InvoiceNow Transaction Bonus (ITB) for SMEs.

As Singapore propels towards a digital future, InvoiceNow emerges as a catalyst for change in tax reporting and business efficiency. By embracing this transformative platform, businesses can navigate the evolving regulatory landscape with confidence, driving growth and competitiveness in the digital era.

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