Navigating GST Audits with IRAS
Understanding GST Audits
IRAS conducts GST audits using a risk-based approach to ensure businesses comply with tax laws. Being selected for an audit does not imply wrongdoing but is part of IRAS’s effort to educate businesses and simplify tax processes.
Purpose of Audits
- Verify GST is properly accounted for in the business transactions.
- Ensure the GST returns accurately reflect supplies, purchases, and taxes.
- Support businesses in meeting their tax obligations.
What to Expect
Audits may be conducted through emails, phone calls, or onsite visits by authorized IRAS officers. During audits, company may be asked to provide:
- Business information and transaction details
- Sales and purchases listings (in Excel, Access, or text files)
- Supporting documents such as invoices and export papers
- Completed self-review checklists
- IRAS may also confirm details with company’s customers, suppliers, or banks.
Company responsibilities
Cooperation is key. Company must:
- Provide access to premises, records, and staff
- Allow copies of documents
- Respond promptly and honestly to information requests
Note: Obstructing an IRAS officer can lead to fines up to $10,000 and/or imprisonment.
Maintaining Records
Keep detailed sales and purchases listings including invoice dates, numbers, customer/supplier names, and GST amounts.
Audit Timeline and Outcomes
Most audits conclude within 12 months, depending on business complexity and cooperation. IRAS will notify company of results, any tax adjustments, penalties, and ways to improve compliance. If company disagree with an assessment, company can file an objection.
Avoiding Penalties
Incorrect GST returns can attract penalties up to 200% of undercharged tax, plus fines and imprisonment for fraud. A 10% surcharge applies for input tax claims linked to Missing Trader Fraud. Voluntary disclosures under IRAS’ Voluntary Disclosure Programme may reduce penalties.
Tips to Stay Compliant
- Employ staff knowledgeable in GST
- Maintain good record-keeping and internal controls
- Use IRAS-approved accounting software
- Conduct regular reviews of company returns and voluntarily disclose errors
