Singapore IRAS Record Keeping Requirements

Proper record keeping is a cornerstone of compliance with Singapore’s tax regulations. The IRAS mandates businesses to maintain accurate and complete records for a specific period to ensure transparency and facilitate tax reporting. Non-compliance with these requirements can result in penalties and additional scrutiny from IRAS. This guide provides a comprehensive overview of Singapore’s record-keeping requirements, the types of records businesses need to maintain, and best practices to stay compliant.

Why is Record Keeping Important?

Record keeping is crucial for businesses to:

• Ensure Tax Compliance: Accurate records allow businesses to prepare correct tax filings and respond to IRAS queries efficiently.
• Avoid Penalties: Proper documentation helps businesses avoid fines and penalties for non-compliance.
• Support Decision-Making: Detailed records provide insights into financial performance and business trends.
• Facilitate Audits: Well-maintained records streamline the audit process and minimize disruptions.

IRAS Record Keeping Requirements

IRAS has outlined specific guidelines for businesses to maintain financial records, categorized as follows:

Who Needs to Keep Records?

• All businesses registered in Singapore, including sole proprietorships, partnerships, and companies.
• Charities, non-profit organizations, and registered societies.

Retention Period

• For Companies and Businesses: Records must be retained for 5 years from the end of the relevant financial year.
• For GST-Registered Businesses: GST-related records must be retained for 5 years from the end of the accounting period.
• For Individuals (Self-Employed Persons): Records must be kept for 5 years from the end of the Year of Assessment.

Format of Records

• Records can be kept in physical or electronic form.
• Electronic records must be legible, accessible, and properly backed up.

Types of Records to Maintain

Financial Records

• Income statements.
• Balance sheets.
• Bank statements.
• Payroll records.

Source Documents

• Invoices and receipts.
• Delivery orders.
• Credit and debit notes.
• Contracts and agreements.

GST Records (For GST-Registered Businesses)

• Tax invoices and receipts issued.
• Purchase invoices and receipts received.
• Import and export documentation.
• GST account reconciliations.

Other Supporting Documents

• Records of assets and liabilities.
• Inventory listings.
• Business correspondence.
• Records related to R&D claims or tax relief applications.

Best Practices for Record Keeping

1. Adopt Digital Solutions: Use accounting software to automate record-keeping processes and ensure data accuracy.
2. Establish a Record Retention Policy: Define clear policies for record retention and disposal in compliance with IRAS guidelines.
3. Ensure Regular Backups: Regularly back up electronic records to prevent data loss.
4. Conduct Periodic Reviews: Audit your records periodically to ensure completeness and accuracy.
5. Train Staff: Educate employees on proper record-keeping practices to maintain compliance.

Consequences of Non-Compliance

Failing to comply with IRAS’s record-keeping requirements can lead to:

• Penalties: Financial fines for missing, incomplete, or inaccurate records.
• Delayed Tax Filings: Inability to file accurate tax returns, leading to penalties or interest charges.
• Audit Risks: Increased likelihood of audits and scrutiny by IRAS.

How Apexia Corporate Advisory Can Help

At Apexia Corporate Advisory, we understand the complexities of maintaining proper records to meet IRAS’s requirements. Our services include:

1. Record Keeping Advisory: Tailored advice on what records to maintain and how to organize them efficiently.
2. Digital Transformation Support: Assist with the adoption of digital tools for automated record keeping.
3. Compliance Audits: Conduct regular reviews of your records to ensure compliance with IRAS guidelines.
4. Tax Filing Assistance: Prepare and file accurate tax returns using properly maintained records.