Prepare for the Singapore GST Rate Change!
Last year, the Singapore Government announced that the GST rate will increase from 7% to 8% on 1 January 2023 . This change will impact all Singapore businesses that file GST.
The new 8% tax rate is available in Xero, in addition to the previous 7% tax rate (labelled ‘2022’).
Xero has now introduced a new button at the top of your Chart of Accounts page, called ‘Update to 8% defaults’. You will only see this button if you have a Standard role and you have applied a Xero default tax rate to any of your contacts, inventory items, or accounts in your Chart of Accounts.
To update the GST rate on your contacts, inventory items, and accounts, all you need to do is select ‘Update’ on the pop-up to complete the process. If you have more than one Xero organisation, you will need to do this for each one.
However, if you have not completed this by 1 February 2023, not to worry as Xero will automatically update your Chart of Accounts with the new rate for you.
Start Using the New Rate
Now that the tax rate has changed, you will need to make sure that you are using the new GST rate when using Xero. Here are some places where the old rate may still appear and need to be updated by you:
- Invoices and bills
- Bank reconciliation
- Automated bank rules
- Repeating invoice templates (especially those set to ‘Approve to send’) and repeating bill templates
- Draft transactions dated from 1 January 2023 (including invoices, bills and manual journals)
- If you use Hubdoc, you will need to update the default tax rate, which will apply to any new suppliers moving forward.
For existing suppliers, you will need to update the tax rate information on a supplier level.
- Apps you may have connected from the Xero App Store or another provider
To find out more, head on to Xero’s article for more information.