{"id":51179,"date":"2026-10-29T06:08:53","date_gmt":"2026-10-29T06:08:53","guid":{"rendered":"https:\/\/www.you.co\/biz\/?p=51179"},"modified":"2026-10-29T06:08:53","modified_gmt":"2026-10-29T06:08:53","slug":"credit-note","status":"publish","type":"post","link":"https:\/\/www.you.co\/biz\/blog\/credit-note\/","title":{"rendered":"What Is a Credit Note? Singapore GST Rules & Examples"},"content":{"rendered":"\n

A credit note is a document a seller issues to reduce or cancel what a buyer owes on an earlier invoice<\/strong><\/h2>\n\n\n\n
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A credit note<\/strong> is a document a seller sends a buyer to say that an earlier invoice is being reduced or cancelled, in part or in full. You may also see it called a credit memo<\/strong>. It lets the original invoice stay exactly as it was issued, while the credit note is a separate document that records what changed.<\/p>\n\n\n\n

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In Singapore, a credit note also changes the GST. A GST-registered seller usually reduces the output tax it declared on the original sale, and the buyer adjusts the input tax it claimed to match. IRAS, Singapore’s tax authority, requires a GST credit note to show the number and date of the original tax invoice<\/strong> it relates to.<\/p>\n\n\n\n

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Credit notes come up whenever a sale goes slightly wrong. Goods come back, part of a project is cancelled, a price was too high or a discount is agreed after the invoice went out. You’ll deal with them as the seller who issues one and as the buyer who receives one from a supplier.<\/p>\n\n\n\n

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Quick answers<\/strong><\/h2>\n\n\n\n
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Question<\/strong><\/th>Short Answer<\/strong><\/th><\/tr><\/thead>
What is a credit note?<\/strong><\/td>A document from a seller that reduces or cancels the amount owed on an earlier invoice.<\/td><\/tr>
Credit note or credit memo?<\/strong><\/td>The same document under two names.<\/td><\/tr>
Is a credit note a refund?<\/strong><\/td>No. A credit note reduces what’s owed. A refund is the money paid back.<\/td><\/tr>
Credit note or debit note?<\/strong><\/td>A credit note lowers the amount owed. A debit note is used only to request payment where no GST is charged, or to record credit due from a supplier.<\/td><\/tr>
What must it show?<\/strong><\/td>A credit note number and date, both parties’ details, the seller’s GST registration number, the original tax invoice number and date, what’s credited and the GST amount credited.<\/td><\/tr>
Which GST return does it go in?<\/strong><\/td>Usually the return for the period you issued it, not the period of the original sale.<\/td><\/tr>
How long do I keep it?<\/strong><\/td>At least 5 years from the end of the accounting period, the same as invoices.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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On the sample in this guide, a S$500 credit on a S$2,000 invoice also carries S$45 of GST, so the total credited is S$545.<\/p>\n\n\n\n

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Table of Contents<\/strong><\/h2>\n\n\n\n
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  1. What Is a Credit Note?<\/strong><\/a><\/li>\n\n\n\n
  2. Why Would a Credit Note Be Issued?<\/strong><\/a><\/li>\n\n\n\n
  3. Is a Credit Note a Refund?<\/strong><\/a><\/li>\n\n\n\n
  4. What Is the Difference Between a Credit Note and a Debit Note?<\/strong><\/a><\/li>\n\n\n\n
  5. What Must a Credit Note Show?<\/strong><\/a><\/li>\n\n\n\n
  6. How Do Credit Notes Work for GST in Singapore?<\/strong><\/a><\/li>\n\n\n\n
  7. How Do You Record a Credit Note in Accounting?<\/strong><\/a><\/li>\n\n\n\n
  8. How to Issue a Credit Note<\/strong><\/a><\/li>\n\n\n\n
  9. FAQs<\/strong><\/a><\/li>\n<\/ol>\n\n\n\n
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    What Is a Credit Note?<\/strong><\/h2>\n\n\n\n
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    A credit note, also called a credit memo, is a seller’s document that reduces or cancels an invoice that has already been issued. It records the change instead of altering the original invoice, so both documents stay on file. This guide uses “credit note”, the term IRAS uses, and what’s here applies to both names.<\/p>\n\n\n\n

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    Who issues it:<\/strong> The seller, also called the supplier or vendor. A studio that billed too much, a distributor whose goods came back damaged and an overseas software company that refunds part of a subscription all issue credit notes.<\/p>\n\n\n\n

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    Who receives it:<\/strong> The buyer, who uses it to lower the amount they owe and, if they’re GST-registered, the input tax they claim.<\/p>\n\n\n\n

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    Does it replace the invoice?<\/strong> No. The original invoice stays on file unchanged, and the credit note refers back to it by number and date. Our guide to what an invoice is<\/a> covers the document a credit note corrects.<\/p>\n\n\n\n

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    How it differs from an invoice:<\/strong> An invoice asks the buyer to pay, and a credit note reduces what they owe. Both carry their own numbers, and a credit note always points back to an earlier invoice.<\/p>\n\n\n\n

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    What Is a Credit Note on an Invoice?<\/strong><\/h3>\n\n\n\n
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    A credit note on an invoice is a separate document linked to that invoice by number and date. It isn’t a line added to the invoice itself. A GST credit note must show the original tax invoice’s number and date.<\/p>\n\n\n\n

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    In your accounting records, the credit note then appears against the customer’s account as a negative amount, which lowers the balance still due on the invoice.<\/p>\n\n\n\n

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    Why Would a Credit Note Be Issued?<\/strong><\/h2>\n\n\n\n
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    A seller issues a credit note when an invoice contains a mistake, or when the customer is owed money back or a discount. IRAS lists six situations<\/a>:<\/p>\n\n\n\n

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