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Accounts Payable | Reverse Charge Bills

Caught at the bill, not at the quarter.

A bill from an overseas supplier looks like any other bill until someone remembers the reverse charge. The flag is set at capture, from the supplier's overseas status and the nature of the supply, so the output tax and the corresponding input tax claim are computed together and land on the same return instead of being reconstructed from invoices three months later.

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Reverse charge bills

What the system does

Capability, input, output.

  • Reverse charge flag

    Input
    Supplier location + nature of supply
    Output
    Reverse charge tag set at capture

  • Both-way posting

    Input
    Flagged bill + applicable rate
    Output
    Output tax and input tax claim posted together

  • Partial claim handling

    Input
    Your input tax recovery position
    Output
    Claim restricted where full recovery does not apply

  • Return population

    Input
    Reverse charge register for the period
    Output
    The relevant F5 boxes drafted from the register, not retyped

  • FX treatment

    Input
    Foreign currency bill + rate at the tax point
    Output
    Converted once, with the rate stored on the entry

  • Audit trail

    Input
    Flag, override and posting
    Output
    Who decided what, and when, kept with the bill

Compliance + integrations

Reverse charge is an audit finding waiting to happen.

It is easy to miss because nothing on the supplier's invoice says GST. Teams that catch it at the quarter are reconstructing it from a spreadsheet of overseas payments. Catching it at capture means the books, the return and the claim already agree.

Regulations we work within

  • GST Act

    Reverse charge on imported services accounted for by the recipient, with the output tax and the claim taken together.

  • Blocked input tax

    Where the underlying supply falls in a blocked category, the output tax still applies and the claim does not. Flagged rather than netted.

Connects to

  • IRAS The F5 return the entries feed
  • Xero Posted back to the books
  • QuickBooks Posted back to the books

Reverse Charge Bills FAQ

What buyers ask.

If the output tax and the input tax cancel out, why does it matter?

Because they only cancel out when you can recover input tax in full. If you cannot, the reverse charge is a real cost, and the amount is one you are expected to have computed. Even where it does net to nil, the entries still have to be on the return, and their absence is what an audit picks up.

How does the system know a supply is caught?

From the supplier being overseas and the nature of what was bought, both of which are already on the vendor record and the bill line. Where it is genuinely ambiguous the bill is flagged for a human rather than guessed at, and the decision is stored so the same supplier is treated consistently next time.

What about bills already posted without the flag?

Run the check back over a period and it lists the bills from overseas suppliers that were never flagged. Each one links to the original posting so you can see what was bought before deciding whether it was caught.

Does this cover low-value imported goods too?

The same mechanism applies, with the flag set from the supplier and the nature of the import rather than from anything printed on the invoice. Talk to us about which import scenarios are live today and we will tell you straight.

More in Accounts Payable

Related features

Find the reverse charge you have already missed.

Connect your books, free. The check runs back over your posted bills and lists the overseas suppliers whose invoices were never flagged.

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