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In Singapore, deemed supplies include free samples given to customers at no charge. If input tax was claimed on the purchase of these sample items, businesses are required to account for output tax when giving out the samples. Currently, Xero does not allow sales invoices to be issued at a zero value. As a result, if a sample is given at no charge, the sales invoice does not register any tax code. The workaround is to input a sales value and create a negative line item to ensure the invoice registers the tax code.

The second issue arises when using Xero's "deemed supplies" tax code for sample invoices that involve inventory items. When issuing an invoice for a sample with a nominal value (due to the previous issue), and selecting the deemed supplies tax code, the GST F5 form fails to capture the cost of the inventory item (i.e., the deemed supply) and the corresponding output tax. The workaround here is to manually enter the cost of the inventory item when issuing the invoice, and use a second line without affecting the inventory. This results in needing to manually check the inventory module to determine the average cost every time a sample invoice is issued. Additionally, this approach renders the deemed supplies tax code redundant, as the standard-rated supply tax code would achieve the same outcome. XERO may wish to consider working on this deemed supply code.