Singapore is very strict with its GST laws and businesses that are found to be charging more taxes than what it should be, and filing for returns with false data can face penalties.
Why Is Auditing Mandatory For Businesses
If your business is selected for auditing, this does not mean that you are in trouble. The Singapore government conducts random checks with registered companies to ensure that all business is tax compliant.
It is always better to keep all your GST documents ready beforehand before a GST audit. A lot of preparation will be needed on your part. You need to compile data, tally values and if any discrepancies are found, you need to validate the same. All this can be time-consuming. Here is where tax professionals come to your rescue. Their team will ensure that all your GST documents are validated and in top-notch order to be presented for auditing.
What Happens When A Problem Is discovered
If an error is discovered in your paperwork, they will notify you and assist you in correcting it. They will make certain that the entire audit process runs smoothly and without any paperwork hiccups.
Following your audit, the auditors will present their findings and share the results. Depending on the nature of your business, this could take several months or a year. If you have any concerns about the outcome, you can write to the IRAS and explain your concerns, or you can file an appeal with the GST Board.
There might be a minority of businesses who might try to evade GST by engaging in cross-country transactions known as Missing Trader Fraud Agreement (MTF). Here the seller will charge GST on their products or services to other sellers and evade paying the GST to IRAS and fail to account the same while filing. This is a serious offence and can lead to a huge penalty and imprisonment of up to 7 years.
Your business too could become a victim of MTF if you are not careful. This is the reason why you need to be careful while making deals and never share confidential information with anybody.
Self-Assessment Checklist for GST Compliance
You need not have to wait for your business to be selected for an audit. You can make use of the Assisted Self-Test Kit (ASK) which is a pre-filled checklist that ensures that you have met all the criteria before filing for your GDT returns. If you plan to participate in any of the government schemes, then it is mandatory to take the ASK.
You can even participate in the Assisted Compliance Assurance Program (ACAP) that can help you review your business’s current approach and process and help pull out potential GST risks by an accredited GST specialist.
Documents Needed
- GST audit documentation is as follows:
- Documents showing auditing practices compliance
- Preparation as well as execution of the team for GST audit.
- Obligation and transparency for the job in the appointment team
- Allowing the reporting partner to ensure proper completion of all desired works
- Assistance in the grounding and chasing of future audits
Conclusion
Auditing is nothing to be scared of. If you are religiously following your State’s GST guidelines and filing returns correctly, you can be assured that you will sail through the audit process.
