Even though it’s a small country, Singapore is among the best places for ventures and innovations globally. A critical aspect that makes it an oasis for the companies is the beneficial taxing rules and regulations.
One of the integral aspects of the consumer and business world is the Goods & Services Tax (GST). Indeed, it’s an essential part of the IRAS’ strategy for local and foreign company taxation. Since 1994, the IRAS has reviewed, changed, and improved the GST rates, filings, and paperwork regulations.
If you’re a business owner, the constantly shifting taxation conditions may prove to be a bit of a challenge. This is why you should consider hiring bookkeeping services to avoid such hassle. In such cases, the best way to remain competitive is to comply with the GST regulations. While many accounting professionals can help you, it’s a brilliant idea to grasp some basics. Read on to learn more about the basics of GST auditing, how it works and its requirements.
What is a GST audit?
In short, a GST audit is the process of checking your day-to-day business transactions. In Singapore, the government imposes this type of audits to ensure that every company reports correctly and accurately its taxes. Typically, they’re looking for any lapse in paperwork and errors in claiming input tax, among others.
Furthermore, the IRAS can conduct a GST audit through email, letter or in-person. In most cases, the officers will request documents and interviews with the company head personnel. As expected, such a process is often time-consuming, as the verification and submission take up valuable time and effort.
What is the purpose of the GST audit?
Undoubtedly, the primary purpose of the IRAS’ GST tax audit programme is to ensure all your returns comply with the laws. Still, a GST tax audit doesn’t necessarily mean you’re in trouble. In most cases, the IRAS’ sole purpose is to educate you on tax obligations and assist you in filing your taxes. In other words, they can help you get a better understanding of the tax laws, policies and processes.
How does a GST audit work?
As already mentioned, a GST audit ensures that you’ve filed your taxes correctly and accurately. In this regard, the officers need to verify that you’ve adequately accounted for the GST in your business transactions. Also, you must report everything in your GST returns.
Most of the time, the procedure involves checking for the correct classification of your supplies. The IRAS will also review whether you’ve accounted, paid and claimed your GST taxes correctly. Let’s not forget about the total value of supplies, purchases and taxes report.
How does the IRAS select your company for a GST audit?
Usually, a GST audit can cover a broad range of industries. While it may target a particular company, it’s mostly a random and routine activity. In other words, the IRAS doesn’t assume that the selected business has made GST errors. Perhaps, the main idea of the periodical audits is to check the general level of compliance. Therefore, the agency will ensure that every case gets a fair review.
What are the GST audit requirements?
During a Goods & Services check, you may provide the Revenue Agency with information about your business. This data may include arrangements and the running of the company. Also, you must present your sales and purchases listings to verify the figures you’ve reported in your GST returns.
Make sure you have documents to support your transactions. Typically, this includes invoices and export documents. There are self-review checklists that you must fill in during the pre-registration input tax claim or bad debt relief. In some cases, the IRAS may ask your customers and suppliers for confirmation about whether your GST returns are accurate.
How to comply with the GST filing law?
Of course, there are several ways to minimise the risk of GST audits and increase the chances of success in audits. Perhaps, the first thing to do is engage your staff with sound GST knowledge and adequate experience. For example, you can pay for qualification programmes or let your personnel apply for GST courses by the Tax Academy.
Another healthy habit is to practise good record-keeping. Typically, using a computerised accounting system will make the process much easier for you and the IRAS. Keep in mind that the software you plan to use must comply with the agency’s technical requirements.
Undoubtedly, conducting periodic reviews of your returns and disclosing any errors voluntarily will keep your record clean. You’ll get a penalty reduction under the IRAS Voluntary Disclosure Programme when you report a mistake voluntarily. Otherwise, get a professional like us regarding GST filing services.
Rely on Professionals
To conclude, it’s safe to say that GST audits won’t necessarily put you in trouble. Still, you should be ready when the IRAS selects your business for a review. In this regard, you should rely on professionals like JL Accounts. The experts at the company will offer a wide range of accounting assistance, including GST audit services. Ultimately, a seasoned accountant will help you deal with the tedious task of filing your GST taxes and claims.