Singapore's tax compliance evolution
In Singapore's dynamic business landscape, staying ahead means embracing digital transformation. What began as a voluntary initiative to modernise business processes has now evolved into a regulatory standard.
The latest milestone in this journey comes from the Inland Revenue Authority of Singapore (IRAS), which is introducing the mandatory phased adoption of InvoiceNow, Singapore's electronic invoicing network based on the Peppol framework, for newly GST-registered businesses. Singapore was notably the first country outside of Europe to adopt Peppol as the nation-wide e-invoicing standard, which has since expanded geographically even further, to as far away as New Zealand. This latest initiative marks a pivotal shift towards electronic reporting, aimed at enhancing efficiency and bolstering tax compliance.
Since its inception in 2019 as a national initiative led by the Infocomm Media Development Authority (IMDA) and actively promoted through digitalisation grants for both SMEs and large enterprises, InvoiceNow has been revolutionising invoice processing through the use of 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. By April 2026, all newly registered GST businesses, whether voluntary or mandatory, will also 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.
Why companies should start using InvoiceNow
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.
Even if your business does not fall under the immediate mandate, switching to InvoiceNow offers significant advantages over manual processing: beyond error reduction, operational efficiency, and faster GST refunds, adopting e-invoicing can result in significant financial gains, with studies showing cost savings of 60-80% compared to conventional paper invoice processing. Furthermore, the network provides stronger security, as Peppol IDs are only issued following a Know Your Customer (KYC) process via CorpPass, giving businesses 100% certainty of their trading partner’s identity. The Singaporean government actively promotes these benefits, from reduced invoice processing times, to the green economy benefits, to improved invoice accuracy: there are plenty of arguments to start getting on board.
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