In 2024, the Inland Revenue Authority of Singapore (IRAS) announced a new requirement for voluntary GST-registered businesses to transmit invoice data using InvoiceNow solutions via the InvoiceNow network. This requirement will eventually extend to all GST-registered businesses progressively.
This move aligns Singapore with international trends and standards, as governments worldwide are promoting the adoption of e-invoicing for tax administration. E-invoicing aims to reduce the need for manual processing and recording of invoices in accounting systems.
To give businesses sufficient lead time to prepare, the adoption of GST InvoiceNow will be implemented in a calibrated and progressive manner from 2025 to 2026:
Launched in 2019, InvoiceNow is a nationwide e-invoicing network based on the international standard, ‘Peppol’. InvoiceNow aims to connect all active businesses and encourage digitalization by facilitating the direct transmission of invoices in a standard digital format between suppliers and customers, from one finance system to another.
This allows suppliers to exchange invoices with their partners who may not be using the same accounting platforms but are on InvoiceNow. Invoices can be digitally and directly transmitted to the accounting system without human intervention, speeding up invoice processing and improving efficiency.
This implementation leverages the digitalization of documentation processes, eliminating manual work and facilitating the direct transmission of e-invoices in a structured data format across different finance systems. The electronic storage of documents provides businesses with a cost-effective solution for reducing storage and retrieval costs while improving cash flow management.
For GST-registered businesses, maintaining good record-keeping controls and accounting processes is crucial. Digitalizing these processes allows companies to focus on core priorities like growth and innovation. These businesses can also benefit from reduced compliance efforts when preparing data for submission to IRAS.
With IRAS’s enhanced risk analysis capabilities, fewer businesses are likely to be selected for GST audits. Those selected for audits may experience shorter audits and faster resolution of audit issues. Businesses claiming GST refunds may also receive refunds earlier if assessed to be of lower risk.
As part of the digitalization effort, all GST-registered businesses (whether suppliers or customers) will need to submit invoice data pertaining to their GST supplies (“Sales Data”) and purchases (“Purchase Data”) to IRAS using InvoiceNow solutions and via the InvoiceNow network. Invoices that are not using InvoiceNow (for businesses not on InvoiceNow or for sales made on point-of-sale systems) should also be sent to IRAS when they are recorded in the accounting system.
As Singapore solidifies its position as a global business hub, maintaining accurate and up-to-date accounts is crucial for companies. The recent update allows businesses to experience seamless cross-border transactions.
Adopting InvoiceNow not only ensures a cost-effective and efficient accounting system but also provides a reliable, globally recognized solution for streamlined financial management.
For expert advice and strategic guidance, contact Fidinam to manage these changes effectively and ensure your business’ compliance. Contact us at info@fidinamgw.com or via the form below.