Understanding Invoices and Tax Invoices in Singapore
An invoice is a document that contains details of the goods or services that a seller has provided to a buyer. It is a request for payment, and it includes information such as the quantity, description, and price of the goods or services, the date of the transaction, the payment terms, and the seller's contact details. In Singapore, businesses are required to issue tax invoices for certain transactions, which include additional information required by the tax authorities.
What is an invoice?
An invoice is a commercial document that a seller issues to a buyer to request payment for goods or services. It is used to keep track of sales transactions and serves as evidence of the transaction in case of any disputes. The information that is typically included in an invoice includes:
- The seller's name, address, and contact information
- The buyer's name and address
- The date of the transaction
- A unique invoice number
- A description of the goods or services sold, including the quantity and price
- The payment terms and due date
- Any applicable taxes or discounts
- The total amount due
What is a tax invoice?
A tax invoice is a special type of invoice that is required for GST registered companies in Singapore. It includes additional information required by the tax authorities, such as the seller's GST registration number and the amount of GST charged.
If the buyer is GST-registered, they can use the tax invoice to claim input tax credit on the GST paid on the purchase.
Key differences between an invoice and a tax invoice:
- An invoice is a commercial document that requests payment for goods or services, while a tax invoice includes GST rate and amount required by the tax authorities.
- A tax invoice is required for GST-Registered companies in Singapore, while an invoice is not required.
- A buyer can claim input tax credit on the GST paid on a tax invoice, but not on an invoice that is not a tax invoice.
In conclusion, while both an invoice and a tax invoice are used to request payment for goods or services, a tax invoice is required for GST-Registered companies in Singapore and includes additional information required by the tax authorities. It is important for businesses to understand the differences between the two and issue the appropriate type of invoice for each transaction.