What GST stands for is the first thing new business owners need to know about the GST audit Singapore companies must carry out. The Goods and Services Tax (GST) was implemented in Singapore in April 1994. Since then, the laws have been altered and modified over the years.
The administrative burden of GST in Singapore has been cited by numerous new business owners. It’s challenging, time-consuming, and stressful. Businesses could lose thousands of dollars due to a single tiny error.
Some new business owners are also unsure of the Singapore GST rates and when they will apply to their operations. If you’re concerned, don’t be; we’ll be explaining how the entire tax system operates for your better understanding of the GST audit Singapore process.
Our team of knowledgeable specialists is here to assist you in keeping up with the changes so that your business doesn’t have to risk incurring any needless, exorbitantly expensive penalty fees. We offer excellent audit services in Singapore; contact us right now to set up a meeting.
We also help clients with the Assisted Self-Help Kit (ASK) audit that IRAS offers. The following are some situations during which the GST audit Singapore process is conducted:
- Any time a business renews its Major Exporter Scheme application
- Based on previously submitted documents, which show that GST F7 Error Filing is routinely submitted
GST Audit Singapore: What Is It?
The GST audit Singapore companies carry out is for the purpose of checking the veracity of the data in the GST return of your company. The audits are carried out using a risk-based methodology. Being chosen for an audit does not always imply that you have done something incorrectly.
The purpose of the GST audit Singapore process is to ensure that tax has been properly taken into account in your day-to-day business transactions and that the information is disclosed and reflected in your tax returns.
Therefore, the IRAS officers must verify that your goods are listed accurately and that your fee was charged and accounted for correctly. The company’s reported values for suppliers, purchases, and taxes would also need to be constant and correct in order for the input fee to be claimed.
An audit might be carried out using letters, emails, or even faxes. Additionally, audit officers may visit the location to speak with important figures in your company’s infrastructure or to obtain documentation.
In order to determine whether the operational transactions you have reported are real and precise, the officer will need to obtain information from your clients, suppliers, and banks, as part of the GST audit Singapore process.
What Can New Businesses Anticipate From The GST Audit Singapore Process?
Each Singapore company can check its statement of accounts and access its own tax records via CorpPass on the myTax page on the Inland Revenue Authority of Singapore (IRAS) website to find out whether they are required to carry out the GST audit Singapore process.
GST-registered enterprises can also use an Assisted Self-Test Kit (ASK) to help them self-evaluate their compliance. The government also rates companies according to how well they comply with the liability department, and this rating is known as the tariff compliance rating.
For those on the outside, it can provide them some understanding of the company’s financial stability and reliability before conducting the GST audit Singapore process.
This rating is determined by a number of variables, including the frequency and timeliness of filing monthly and annual returns, the disclosure of input credit usage, fees paid and unpaid, etc.
IRAS audits companies at random using an algorithm that ranks them according to their regulatory ratings. The following are a few things you can anticipate from the GST audit Singapore process:
Numerous industries are the subject of audits. IRAS may use a risk-based strategy when choosing which companies to audit within each category. Additionally, IRAS may frequently audit companies to assess their general level of compliance.
Audit Norms and Procedures
A telephone interview, a letter, or an email may be used to conduct an audit. Additionally, IRAS may ask to see your workplace or speak with your key staff. The IRAS officer who visits your location for a field visit should be in possession of an IRAS-issued authority pass.
When conducting the audit, the following will be needed:
- Information about your company (such as details about business contracts or how it is run)
- Listing sales and purchases to check the accuracy of the data in your GST filings
- Supporting records for your business dealings (such as invoices and export records)
- Finished self-evaluation checklists (e.g. self-evaluation form for input tax complaints made prior to registration and to ease bad deficit)
In order to establish the validity of the transactions you disclosed in your GST returns, your clients, vendors, and/or financial institutions might also be contacted. You may also be asked to give a demonstration of how you enter transactions into the computer system.
Listing Of Sales And Purchases
To verify the numbers listed in your GST forms, you should keep track of all sales and purchases. The listings must be submitted as an IRAS Audit File during an audit (IAF).
Note that an IRAS Audit File (IAF) is a data file providing specified accounting data needed for auditing. The information provided should be in a format that is readable by accounting software capable of generating an IAF.
For a list of accounting programs that may generate IAF, please refer to IRAS’ Accounting Software Register.
Ensure the listings are provided in a Microsoft Excel file type with the following information if you are not using accounting software that can produce an IAF. It is unacceptable to reproduce your listings as an image (for example, as a PDF file).
Standard-rated goods, zero-rated supplies, and exempt products are all listed for sale here:
- Date of Invoice
- Billing Reference/Invoice number
- Customer’s name
- Invoice total (leaving out GST)
- GST (where relevant)
- Products’ final destination
Listings of purchases for tax-deductible purchases:
- Date of Invoice
- Billing Reference/Invoice number
- Supplier’s name
- Number of the GST registration of the supplier
- Invoice total (leaving out GST)
- GST (where applicable)
What Is Singapore's GST Registration Process?
The process for registering for GST is simple and easy. Two options for submitting the application are:
- Online (which practically everyone can use) through myTax Portal.
- On paper (which is just an option for firms without access to myTax Portal):Download the GST F1 application form, and mail it—along with the required paperwork—to Revenue House, 55 Newton Road, Singapore 307987.
Duties Of Taxpayers
Your teamwork will be required in the following ways during the GST audit Singapore process:
- Allow complete access to your facilities, archives, and documents
- Make a place or workspace accessible for the auditors to undertake the books-and-records examination
- Permission to speak with the operational employees or the process owners
- Permission to copy and/or extract records and documents
- Provide fast, thorough, and accurate responses to information requests
- Be sincere and truthful in all of your interactions; any irregularities or omissions should be fully disclosed as soon as possible
Timeframe Of The GST Audit Singapore Process
Within a year, the majority of GST audits will be completed. The progress of your GST audit Singapore process is influenced by your organization’s intricacy as well as your representatives from the tax and business worlds.
Your reported values may be adjusted, and penalties for unpaid additional tax may be imposed. Assessments may be raised as a result. Clarifications may be made in a letter:
- The foundation for any adjustments
- The nature, scope, and cost of any penalties
- Any issues you should be aware of to better adhere to GST regulations
You may submit an objection to the GST audit Singapore process if you disagree with the evaluation. Please visit the Objecting to Audit Assessment page on the IRAS website for further details.
Increasing Adherence To Tax Laws
In order for new businesses to increase adherence to tax laws, GST-registered enterprises are encouraged to:
- Ensure accurate record-keeping
- Retain effective internal controls
- Hire individuals with sufficient experience and strong GST expertise (for example, personnel who have taken GST Courses offered by the Tax Academy)
- Utilize an electronic accounting system. For a list of accounting programs that have been verified by the programmers to meet IRAS’ technical criteria, consult the Accounting Software Register
- Assess your returns on a regular basis, and willingly disclose any errors. You could start by reading the Common GST Errors. If a mistake is disclosed willingly and satisfies the requirements of IRAS’ Voluntary Disclosure Program, penalties may be mitigated
Ruling Out Sanctioning For The GST Audit Singapore Process
Getting educated on tax law is the best method to rule out sanctioning prior to the GST audit Singapore process. Ensure that you are pretty much up to date on each and every modification or have workers who are knowledgeable with the requirements of the GST audit Singapore process.
Regular GST reviews, whether carried out independently or with the aid of professional GST experts, are beneficial.
How We Can Help - Our Professional Audit Services
At SJH Advisory, we offer a full, comprehensive suite of business solutions including auditing, accounting, taxation, company incorporation and company secretarial services. Start outsourcing corporate services by getting in touch with our consultants right away.
In essence, you can avoid unpleasant tax fines and make long-term financial savings by being aware of the rules and the numerous incentive programs the government has created regarding the GST audit Singapore process.
Speak to our team of professionals at SJH Advisory today for a consultation about your auditing needs.