Record-keeping is an important part of running a business, regardless of whether the business is big or small. Even in a pro-business country like Singapore, failing to keep accurate business records can lead to problems down the line, so it’s important to know what records you should be keeping and for how long. The last thing you want is unnecessary issues with the Inland Revenue Authority of Singapore (IRAS).
With that being said, it’s not always easy to know what are the important business records to keep as a business owner. After all, there are a lot of different important business owner records that you can keep, and it can be confusing to try to figure out which ones you actually need.
Luckily, we’re here to help. In this article, we’ll go over some of the most important records that business owners need to keep in Singapore. By the end, you should have a good idea of what records you need to keep and why.
What Business Records Do I Need to Keep in Singapore?
These are the records you’ll need to keep as a business:
- Accounts and schedules for tracking assets, liabilities, income, expenditures, profits, and losses.
- Documents that support all company transactions, such as receipts, bills, vouchers, bank statements, and other relevant papers given to or from clients.
- Any other written proof of your company’s transactions.
If you want to be absolutely certain, you can check this IRAS record-keeping checklist.
Be aware that your record-keeping obligations will vary, depending on whether you are a GST-registered enterprise, or non-GST registered enterprise.
How Should I Keep My Company Records in Singapore?
You can choose whether you keep your company records in a digital or paper-based manner, but either way, they should be able to be audited easily.
Keeping Digital Records
If you keep your company records digitally/electronically, you should make sure that they are stored/filed in such a way that their integrity, reliability, and completeness are maintained at all times. This could include having a clear filing/folder system that is easily accessible, and that all files are labeled appropriately.
Keeping Paper Records
If you keep your business records in paper/physical form, make sure they are in good condition, legible, and filed in a logical manner. If the ink on the records is likely to fade over time, take the appropriate steps (such as photocopying receipts) to make sure they will be legible in the long term.
For both digital and paper/physical record-keeping, take all practical steps to ensure that no one can tamper with your records (e.g. passwords for digital record-keeping, and secure/locked filing cabinets for paper record-keeping).
If in doubt about how to store images/photocopies of your business records, review the Singapore Government’s Evidence (Computer Output) Regulations.
Where Should My Company Records Be Kept in Singapore?
The records should be kept at your company’s registered office or at any other location that the board of directors believes to be appropriate. These records must always be available for review by the board of directors.
How Long Should I Keep My Company Records in Singapore?
In Singapore, you are required to keep your company records for five years, dating from the end of the financial year in which the transactions were made.
What Happens if I Don’t Comply With My Record-Keeping Obligations in Singapore?
IRAS takes non-compliance very seriously, even if improper record-keeping was unintentional. IRAS may consider your record-keeping incorrect if it is not maintained effectively, not stored in a proper location or method, or not kept for at least five years.
If IRAS deems improper record-keeping practices are occurring, offenders (including relevant staff and directors) can face a fine of up to $5,000 or even a prison term of up to 12 months. There may also be a default penalty if deemed necessary by the Companies Act.
Under the Income Tax Act, individuals who are convicted of tax-related record fraud may be fined up to $1,000 or imprisoned for up to six months in default of payment.
Unfit company record keeping can also mean an income tax offense has taken place, and IRAS will not accept any capital allowances or expense claims.
Where to Next for My Business’s Record-Keeping?
While we’ve done our best to explain your record-keeping obligations in the simplest terms possible, every business is different, so you may well have some questions. Our team of corporate compliance experts would be more than happy to help, so please contact us today if you have any questions about how you can ensure compliance with your business’s record-keeping.
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