SINGAPORE: The Inland Revenue Authority of Singapore (IRAS) has introduced two new tax frameworks to help businesses manage corporate tax and goods and services tax (GST) issues, it said Friday 18th March.
The Tax Governance Framework and the Tax Risk Management and Control Framework for Corporate Income Tax will help businesses “strengthen tax compliance”, IRAS said, adding that the two frameworks complement the program existing GST-assisted compliance assurance system.
“Together, they provide a suite of voluntary compliance tools that companies can adopt globally or as independent programs, depending on their readiness and business needs,” IRAS said.
The tax governance framework focuses on strengthening tax governance standards and elevating them to the board level.
It presents a set of general principles and practices around three main building blocks of good tax governance – compliance with tax laws, the governance structure for managing tax risks, and relations with tax authorities.
The framework applies to both corporation tax and GST. It can be adopted by any company wishing to commit to good tax governance.
Meanwhile, the Corporate Tax Risk Management and Control Framework is aimed at large companies with “complex business structures and models”, IRAS said.
This framework guides such corporations in establishing “robust” internal controls and processes to identify, mitigate and monitor key corporate income tax risks.
It includes a self-review checklist that includes processes and measures that would demonstrate that strong controls are in place to manage tax risks, such as the tax governance structure, entity-level controls, and tax return checks.
COMPANIES ENJOY BENEFITS IF OBTAINING THE STATUS
Companies will benefit if they obtain statuses in both frameworks, IRAS said.
Under the Tax Governance Framework, companies that obtain TGF status may benefit from a longer grace period for the voluntary disclosure of tax errors.
They may benefit from a one-time extended grace period of two years for voluntary disclosure of corporate income tax or withholding tax errors, or both, within two years of the date of disclosure. attribution of status.
For GST-registered businesses with Assisted Compliance Assurance Program status, they may benefit from a one-time extended grace period of three years for voluntary disclosure of GST errors made within two years of from the date of attribution of TGF status.
For GST registrants without ACAP status, they are eligible for a one-time extended grace period of two years for voluntary disclosure of GST errors made within two years of being granted status.
As for qualifying businesses that achieve corporate tax status, they may benefit from a one-time penalty waiver for voluntary disclosure of prior years’ corporate tax or withholding tax errors. , or both.
They may also qualify for a reduced corporate income tax compliance audit for three consecutive years of assessment from the date the tax authority grants the status.
Tax Commissioner Ng Wai Choong said IRAS “strongly” encourages businesses to adopt the three frameworks to ensure “appropriate” internal controls and systems are in place to manage their tax risks.
“By doing so, companies will give their stakeholders confidence that they are effective in managing tax risks and transparent with their tax matters, while benefiting from reduced compliance costs in the long term,” Mr. Ng said.
More details on the eligibility criteria and application process for both executives can be found on the IRAS website. For inquiries, companies can contact the IRAS Helpline on 1800 356 8622 or email ctmail [at] iras.gov.sg.