Proper record-keeping is a cornerstone of good corporate governance and financial hygiene. For businesses in Singapore, it’s not just a best practice—it’s a legal obligation with specific timelines dictated by the authorities. But with piles of invoices, receipts, and bank statements, many business owners are left wondering: exactly how long do these documents need to be kept?

The answer is clear and consistent across Singapore’s primary regulatory bodies. Understanding this rule is crucial for ensuring compliance, avoiding penalties, and maintaining the financial integrity of your business.

 

The 5-Year Rule: A Harmonised Requirement

Both the Inland Revenue Authority of Singapore (IRAS) and the Accounting and Corporate Regulatory Authority (ACRA) mandate a minimum retention period for business records. This requirement is also enshrined in the Companies Act 1967 (“Companies Act”).

The general rule is that all companies in Singapore must retain their accounting records and supporting documents for a period of at least five years.

This five-year period does not start from the date the transaction occurred. Instead, the clock starts from the end of the financial year in which the relevant transactions are completed.

For tax purposes, IRAS specifies that records must be kept for five years from the relevant Year of Assessment (YA).

Example:

  • Your company’s financial year ends on December 31, 2024. This corresponds to the Year of Assessment (YA) 2025.
  • The accounting records for the financial year 2024 must be kept until at least December 31, 2029.

This five-year rule applies even if your company has been struck off or is in the process of being wound up. In such cases, the former officers or the appointed liquidator must ensure the records are preserved for the required five-year period from the date of the company’s dissolution.

 

What Exactly Should You Keep?

The requirement to keep “accounting records” is comprehensive. It’s not just about the final financial statements. The goal is to retain all documents that sufficiently explain the company’s business transactions and financial position, and allow for the preparation of true and fair financial statements.

These records include, but are not limited to:

  • Income Records: Invoices issued, receipts, cash register tapes, and bank statements showing payments received.
  • Purchase and Expense Records: Invoices and receipts from suppliers, payment vouchers, and bank statements showing payments made.
  • Bank Statements: For all corporate bank accounts.
  • Accounting Ledgers: General ledgers that record assets, liabilities, revenue, and expenses.
  • Other Supporting Documents: This includes import/export permits, contracts, and any other documents that verify the entries in your books of accounts.

For GST-registered businesses, there is an additional need to keep all tax invoices and records that support your GST declarations.

These records can be kept in physical hard copies or electronically. If stored electronically, you must ensure they are secure, cannot be tampered with, and can be readily accessed and reproduced if requested by the authorities.

Navigating the specifics of record-keeping and ensuring all compliance needs are met can be a burden for busy business owners. For professional support with bookkeeping and other accounting matters, consider reaching out to Raffles Corporate Services Pte Ltd.

 

The Consequences of Non-Compliance

Failing to adhere to these record-keeping requirements can lead to serious penalties. Both IRAS and ACRA can take enforcement action. Under the Companies Act, failure to keep proper records is an offence that can result in fines of up to S$5,000 or imprisonment for up to 12 months for the company and its officers.

From a tax perspective, IRAS may disallow expense claims or capital allowances if they cannot be substantiated with proper documentation, potentially leading to a higher tax bill. Furthermore, penalties can be imposed for improper record-keeping.

 

Conclusion: Good Habits, Good Governance

Maintaining your accounting records for the mandatory five-year period is a fundamental aspect of running a compliant and responsible business in Singapore. It safeguards your company during audits, substantiates your tax filings, and provides a clear financial history that is crucial for strategic decision-making. By establishing a systematic approach to document management—whether physical or digital—you can meet your legal obligations with confidence and ease.

For further assistance or inquiries, you can contact the Raffles Corporate Services team via email at [email protected].

Yours sincerely,

The editorial team at Raffles Corporate Services