In Singapore, it is compulsory for companies to keep proper records of all business transactions. The records are needed to explain the financial position and transactions of the company and to ensure that the financial statements prepared are true and fair.
You will also need the records to ensure that your company complies with its tax obligations while filing corporate taxes. When a company files corporate taxes, you do not need to upload all records to IRAS. However, you will need to keep these records in the event that IRAS requests for them. If your company is GST Registered, these records are also needed.
The records must be kept for at least 5 years from the end of the financial year in which the transactions occurred.
The records can be kept in the following form:
- Manually in physical documents
Here is a list of records that must be kept:
- Accounting ledgers and journals documenting the company’s assets and liabilities, revenue and expenses, profit and losses;
- Receipts, invoices, payment vouchers, bank statements and other documents showing all business transactions;
- Any other documents relating to transactions made by the company
The company records should be kept at the company’s registered office or at any place which the company may deem fit. These documents should be made available for inspection by directors.
If the company records are not kept properly, the company and any relevant officer will be liable for a fine of up to SGD$5,000 or to a jail term of up to 12 months.
Also, if proper records are not kept, it may render certain expenses and capital allowances void and thus the company’s income tax return would not be filed accurately. Persons found guilty of improper record keeping of income tax-related documents may be liable of a fine of up to SGD$1,000 or a jail term of up to 6 months in default of payment under the Income Tax Act.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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