Effective 28 February 2020, Agoda will be switching from a net rate model to a commission model in Singapore.
With this change:
- Agoda will be issuing a tax invoice to properties for the commission amounts
- Booking vouchers sent to hotels will show the reference sell rate and the net rate
There will be no changes to existing payment flow.
What do I need to do?
As a property, you will need to start issuing tax invoices to guests (with the reference sell rate amount). You will no longer need to issue tax invoices to Agoda.
Room bookings on Agoda will continue as normal - you do not need to make any changes on the Agoda YCS system and property settings.
If you are a non GST-registered property:
As a property, you will need to start accounting for your sale of rooms based on the reference sell rate. You will no longer be required to issue any invoice / receipt to Agoda for the net rate amount.
If you are a GST-registered property:
Accordingly, your GST filings to IRAS will need to be based on the reference sell amount (as opposed to the net rate amount).
Also, you should be able to take credit of GST amount of the tax invoice issued for the commission amount by Agoda to you.
Frequently Asked Questions (FAQ):
1. What is the transitional timeline of these changes?
The cut-off date being 28 Feb 2020, all bookings made prior to 28 Feb 2020 (irrespective of the date of check-in) would be under the previous (net rate) model. All bookings made on or after 28 Feb 2020, would be under new (commission) model.
2. Are there changes to the contract with these changes?
There is a new updated contract (APPA) between property and Agoda, with these changes. The new APPA can be viewed on YCS on and after the change-date.
Changes to the APPA are regarding the fact that Agoda would be issuing tax invoice for the commission amount. It would also be the responsibility of the Hotels to issue tax invoice to the customers for the accommodation service.
There are no contract changes regarding commercial aspects.
3. Are there changes to the booking vouchers sent to properties?
Yes, booking vouchers sent from Agoda to properties will now show the reference sell rate, on top of the existing net rate amount shown.
4. How will the tax invoices be sent from Agoda to properties?
Tax invoices will be sent from Agoda to properties in Singapore. The tax invoice will indicate the commission amount and the corresponding GST amount. This will be sent fortnightly to all properties (irrespective of the property's GST registration status).
5. What if my property is non-GST registered?
No changes will be needed in terms of tax invoicing or GST filings, as you do not currently perform these actions as a non-GST registered property. However, you will now be able to recognize revenue based on the reference sell rate, instead of the existing net rate.