Historical 2023 transition: 7% to 8%
The 49-page IRAS training explains the change from 7% to 8% on 1 January 2023; it also announces the subsequent 8% to 9% change on 1 January 2024. All dates, rates and concessions below relate to the 2023 transition. This is not the prevailing rate for later supplies. The stated reason for the Budget 2022 increase was supporting healthcare and seniors.
The four preparation tasks
Update accounting/invoicing software, cash registers and point-of-sale systems with vendors; prepare new displayed prices; review existing contracts; and understand the transitional rules. The source recommends software in the IRAS Accounting Software Register and checking Productivity Solutions Grant eligibility. Retain the ability to apply historical rates for adjustments rather than simply overwriting every existing transaction.
Price displays and inclusive fixed contracts
Prepare tags, price lists, advertisements, brochures and website prices inclusive of 8%, then replace old prices on 1 January 2023. If overnight replacement is impossible, clearly display both 7%-inclusive prices before that date and 8%-inclusive prices from it. Hotels and food-and-beverage businesses imposing service charge need not display GST-inclusive prices but must prominently state the service charge and correct GST rate. Review whether contracts permit increased consideration; if a fixed total S$1,000 cannot rise and the supply is at 8%, GST is 1,000×8/108=S$74.07.
Time of supply and the three events
General time of supply is the earlier of invoice issue or payment receipt: before 1 January 2023 generally 7%, on/after generally 8%. Transitional rules may change that result when invoice, payment and goods delivery/service performance fall partly or wholly across the date. They apply to local and continuous supplies, B2B imported services under reverse charge from 2020, and B2C digital services under OVR from 2020. Examine all three events, not invoice date alone.
Invoice on/after change, full payment before change
Scenarios 1A–1C: full pre-change payment fixes 7% whether delivery/performance is before, after or split across the change. The later invoice does not by itself turn that fully prepaid supply into 8%. Keep evidence of payment receipt, subject to the specified payment-method concessions.
Invoice on/after change, full payment on/after change
Scenarios 2A–2C start at 8% under normal timing. If delivery/performance was wholly before, the supplier may choose 7% for all. If wholly after, no 7% choice. If split, the supplier may apply 7% to the pre-change portion and 8% to the rest. TheS$1,000 example delivers 700 before and 300 after:700 at 7%,300 at 8% when the supplier chooses the transition treatment.
Invoice on/after change, payment split across it
Scenarios 3A–3C normally put pre-change receipts at 7% and later receipts at 8%. All delivery before permits 7% for the whole supply: the 1,000 example paid 400 before/600 after can all use 7%. All delivery after does not permit lowering the later 600 portion. With both delivery and payment split,7% can apply to the higher of pre-change payment and pre-change delivered value. Example prepayment 350 and pre-delivery 600 gives 600 at 7%,400 at 8%, instead of ordinary 350/650 allocation.
A supplier’s 7% election needs evidence and timely credit
Choosing the old rate needs no IRAS approval or form but requires delivery orders, work certification, customer acknowledgement and payment evidence. Only the supplier chooses; self-billing customers must obtain written supplier consent. If an 8% tax invoice was already issued, credit the excess GST by 15 January 2023 as instructed in the slides. The date is a historical 2023 deadline, not a reusable deadline for every later adjustment.
Invoice before change and fully prepaid
Scenarios 4A–4C: an invoice and full payment both before the change remain 7%, whether delivery/performance is before, after or split. No rate adjustment is required for any of these three delivery patterns.
Invoice before change but full payment later
Scenarios 5A–5C initially charge 7%. All delivery before needs no adjustment; all after requires the full supply at 8%; split delivery requires 8% on the post-change portion. Cancel the relevant old invoice/value with a credit note and issue replacement at 8% by 15 January 2023. The split example’s 700 pre/300 post delivery credits 321(300+21 GST) and re-invoices 324(300+24 GST); original totalGST was 70 on 1,000.
Invoice before change with split payments
Scenarios 6A–6C initially charge 7%. All delivery before needs no change even with payments 300 before/700 after. All delivery after means later paid 600 of a 1,000 supply must be 8%: credit 642 and re-invoice 648. If both split,8% applies to the lower of post-change payment or post-change delivered value. The example post-payment 650/post-delivery 400 therefore adjusts 400: credit 428 and re-invoice 432;350 prepaid and 600 pre-delivery support the rest at 7%. The required replacement deadline in these examples is 15 January 2023.
| Invoice relative to1Jan2023 | Payment | Delivery/performance | Result |
|---|---|---|---|
| After | Before in full | Before /After /Split | 1A–C:7%all |
| After | After in full | Before | 2A:option7%all |
| After | After in full | After | 2B:8%all |
| After | After in full | Split | 2C:option7%pre-delivery,8%rest |
| After | Split | Before | 3A:option7%all |
| After | Split | After | 3B:7%prepaid,8%rest |
| After | Split | Split | 3C:option7%onhigherpre-payment/pre-delivery |
| Before | Before in full | Before /After /Split | 4A–C:7%all,noadjustment |
| Before | After in full | Before | 5A:7%all |
| Before | After in full | After | 5B:8%all,adjust |
| Before | After in full | Split | 5C:8%post-delivery,adjust |
| Before | Split | Before | 6A:7%all |
| Before | Split | After | 6B:8%post-payment,adjust |
| Before | Split | Split | 6C:8%onlowerpost-payment/post-delivery,adjust |
Report output adjustments in the adjustment period
The example invoice 9 December 2022 is 1,000+70 GST; service and payment 9 January 2023 lead to credit 1,000+70 and replacement 1,000+80 on 15 January. December 2022 return reports supplies+1,000 and output+70. March 2023-quarter return reports supplies−1,000/output−70 and supplies+1,000/output+80, net output+10. Report in the period of adjustment rather than silently replacing the original period’s figures.
Six payment-receipt concessions
Recurring GIRO/credit-card payments received in January 2023 may count before the change only if successfully effected by month-end, relate to a pre-change bill and follow normal billing cycle. Non-recurring credit-card payments qualify if charged by 31 December 2022. TT instructions must reach the recipient bank by that date ; AXS/SAM/NETS transactions occur by it ; instant FAST/PayNow funds must be received by it. Cheques must be issued to the supplier before 1 January 2023, presented by 4 January 2023 and successfully cleared. A cheque date alone without those steps is insufficient.
Reasonable valuation of split goods and services
Use measurable-work valuation such as open-market value or normal costing/pricing. For 100 homogeneous boxes priced 1,000,30 delivered before and 70 after allocate 300 at 7% and 700 at 8%. For evenly spread three-month cleaning at 6,000, one month before and two after allocate 2,000 at 7% and 4,000 at 8%. Time is a suitable proxy in that evenly performed example, not an automatic method for uneven milestone work.
Rebates and returns retain the right original link
Cash rebates for purchase thresholds discount previous sales; credit price and GST according to pre/post-change supply rates, using 7/107 or 8/108 for inclusive rebates. Mixed prior supplies require reasonable apportionment. A rebate offsetting a new post-change sale instead reduces that sale’s value, then 8% applies to its net value. Returned goods originally supplied before the change use the original rate even when returned later; keep evidence of the original supply timing.
Free private use and the midnight concession
Where input tax was allowed, private/free use of business goods or assets is deemed services, with output tax on the accounting period’s last day. If actual use was before 1 January 2023 but period-end later, the supplier may choose 7% with evidence. The source uses periods November 2022–January 2023 or December 2022–February 2023. Sales between midnight and 7 am on 1 January 2023 may remain 7% only if treating after-midnight sales as the preceding day is normal accounting practice and registers/systems were already programmed that way.
Simplified invoices have transition-specific exceptions
At the normal 8% rate, a simplified invoice for a GST-inclusive total not exceeding 1,000 may omit the GST amount. Choosing 7% for the full value requires showing its 7%GST amount on the simplified invoice. Choosing 7% only for part requires a tax invoice showing different rates and corresponding tax amounts. A registered recipient receiving a simplified invoice without GST uses the prevailing invoice-date tax fraction to determine claimable tax. Do not use that ordinary fraction to override a clearly specified transition rate.
Keep the guide and evidence with the transaction
The training points to the 2023 rate-change e-Tax Guide, business webpage and FAQs. Use the detailed guide to check transaction-specific qualifications and maintain invoice, payment and performance evidence. Its tables are a historic decision aid for the 2023 boundary, not a substitute for checking different later changes or new overseas-supply rules.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗