Do I charge GST on a deposit in Singapore?

On a deposit that is part payment, yes, when you receive it. On a refundable security deposit, only when you apply it to the payment due.

Is a forfeited deposit subject to GST?

It depends on the country and the facts. In Australia a forfeited security deposit is consideration. In Singapore a rental deposit forfeited on early termination under the tenancy agreement needs no GST.

When is GST due on progress claims?

In Singapore, at the earlier of each payment or each invoice for that stage; in Australia, the same on the accruals basis; in New Zealand, also when a payment falls due. On a cash or payments basis, when you are paid.

Is consumption tax due on an advance in Japan?

In principle no: it arises when the goods are delivered or the service is provided. A small sole proprietor on the cash basis may use the date of payment.

What is a retention sum, and when is it taxed?

Part of a progress payment the client holds back until the work is accepted. In Singapore it is taxed at the earlier of payment or invoice, like any progress payment.

Deposits and progress claims

Copy for AI

Money often arrives before the work is finished: a down payment to start a job, a refundable deposit on loaned items, or progress claims on a long project. Whether tax is due when the money arrives depends on what the money is and where you are registered. This page compares the rules. It is general information, not tax or legal advice: check the sources at the end or ask your accountant before you rely on it.

In short

A part payment (down payment, advance, prepayment) pays for the sale. In Singapore, Australia and New Zealand it brings the GST forward to when you receive it.
A refundable security deposit is held against the customer’s obligations. It is taxed only when you apply it to the price or, in Australia, when it is forfeited.
Progress claims are taxed stage by stage: in Singapore at the earlier of each payment or each invoice, in Australia the same on the accruals basis, and in New Zealand also when a payment falls due.
In Japan an advance does not, in principle, change the timing: consumption tax follows delivery of the goods or the service.

Country by country

Singapore

A deposit that forms part of the payment is taxed when you receive it. A refundable security deposit is taxed only when you use it to offset the payment due. If you refund a part-payment deposit, you may adjust the GST already accounted for, as long as you keep the documents, such as a credit note. A rental security deposit forfeited on early termination under the tenancy agreement needs no GST. For progress payments, such as on a construction contract, GST is due at the earlier of each payment received or each invoice issued, and retention sums follow the same rule.

Hong Kong

There is no sales tax, VAT or GST, so deposits raise no tax-timing question.

Australia

A deposit held as security for performing an obligation is not consideration unless it is forfeited because the obligation was not performed, or applied to the price. GST on it is then attributed to the period in which that happens. A payment that is not a security deposit is consideration received. On the accruals basis, receiving any part of the price brings all of the GST on that sale into that period, unless the sale is progressive or periodic: such a supply is attributed as if each component were a separate supply. On the cash basis, only the GST on the amount received counts.

New Zealand

A deposit that a supplier receives under a contract, conditional or not, is a payment and triggers the time of supply. A deposit paid to a stakeholder does not, because the supplier has not received it. A supplier who receives advance or progress payments must account for GST on them. On the invoice or hybrid basis, GST on a progress payment is accounted for in the earliest period in which the payment falls due, is received or is invoiced; on the payments basis, when it is received.

Japan

In principle, receiving an advance does not change the timing. Sales are recognised when the goods are delivered or the service is provided, whatever the date of payment; a small sole proprietor on the cash basis for income tax may use the date of payment instead. A qualified invoice may be issued before the supply, for example for a year’s maintenance billed in advance; if its details change by the time of supply, issue a corrected one.

Malaysia and Brunei

For Malaysian service tax, a refundable deposit held for security is not taxable, while a deposit that is part of the payment for the service is. Construction progress payments are taxed when the payment is received. Brunei has no GST or VAT.

In easySales

Record money paid ahead as a Prepayment. Where your tax settings make tax due on receipt, for example a GST-registered company in Singapore, easySales issues a deposit tax invoice dated the receipt date. See Deposits and prepayments.
Record a refundable deposit as a Security deposit on its own receipt. It stays out of the customer’s balance until you allocate, invoice, refund or forfeit it. See Forfeit a deposit.
Bill a project in stages with a billing plan on the quotation: a deposit, milestones or regular periods, each invoiced when it falls due. See Plan billing stages.

Examples

Lim & Co, GST-registered in Singapore, quotes SGD 20,000.00 plus GST for an office fit-out and asks for 30% up front. Harbour Café, a GST-registered customer, pays SGD 6,540.00 on 1 June: SGD 6,000.00 plus GST of SGD 540.00. GST on that part payment is due in the return covering 1 June, and the tax invoice for it is due by 1 July. When the job ends, the final invoice charges the remaining SGD 14,000.00 plus GST of SGD 1,260.00, SGD 15,260.00 in all.

The café also leaves a refundable SGD 1,000.00 deposit on sample furniture. No GST is due while Lim & Co holds it. If the café keeps the samples and the deposit is applied to their price, GST is due at that point.

Common questions

Do I charge GST on a deposit in Singapore? On a deposit that is part payment, yes, when you receive it. On a refundable security deposit, only when you apply it to the payment due.
Is a forfeited deposit subject to GST? It depends on the country and the facts. In Australia a forfeited security deposit is consideration. In Singapore a rental deposit forfeited on early termination under the tenancy agreement needs no GST.
When is GST due on progress claims? In Singapore, at the earlier of each payment or each invoice for that stage; in Australia, the same on the accruals basis; in New Zealand, also when a payment falls due. On a cash or payments basis, when you are paid.
Is consumption tax due on an advance in Japan? In principle no: it arises when the goods are delivered or the service is provided. A small sole proprietor on the cash basis may use the date of payment.
Can I refund a deposit after charging GST on it? In Singapore you may adjust the GST already accounted for, as long as you keep the documents, such as the credit note to your customer.
What is a retention sum, and when is it taxed? Part of a progress payment the client holds back until the work is accepted. In Singapore it is taxed at the earlier of payment or invoice, like any progress payment.

Sources

Last checked: 21 October 2026.