The Inland Revenue Authority of Singapore (“IRAS”) revised the e-Tax Guide on the Assisted Compliance Assurance Programme (“ACAP”) on 2 April 2018 by extending the current penalty waiver from 31 March 2019 to a final extension date of 31 March 2024.
In other words, IRAS will be prepared to waiver penalties for genuine non-wilful GST errors in the course of ACAP review when the taxpayer
- notify IRAS by 31 Mar 2024 of his intention to embark on your first ACAP;
- settle the additional taxes; and
- attain ‘ACAP Premium’ or ‘ACAP Merit’ status.
According to the e-Tax Guide, this is a one-time of the normal 1-year grace period under the IRAS’ Voluntary Disclosure Programme (VDP), as recognition of your efforts to strengthen the effectiveness of the overall GST controls to ensure continual GST compliance. If any of the above conditions is not satisfied, IRAS may impose a reduced penalty under the normal VDP rules, for non-wilful GST errors made.
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In 2016 and 2017, IRAS has stepped / will step up audits on large businesses and checks on businesses’ display of GST-inclusive prices to the public.
Large Businesses (2% of GST taxpayer population but contribute > 50% of the total GST payable)
IRAS has explained from its past audit experience that large businesses make transaction errors on industry-specific issues and basic GST rules. Accordingly, IRAS will embark on checking the GST compliance of large businesses from different industries and conduct field visits if necessary.
IRAS encourages large businesses to undertake GST Assisted Compliance Assurance Program (ACAP) to enjoy audit exemption. The purpose of ACAP is to allow businesses to review and strengthen their tax risk management policies and GST controls as part of their corporate governance. One of the benefits of attaining ACAP status is to enjoy a one-time waiver of all penalties on any past GST errors disclosed to IRAS. Under the existing law, any GST errors or omissions discovered through IRAS’ audit will attract penalties of up to two times the tax underpaid and a 5% late payment penalty.
Price Display Requirement
GST-registered businesses are required to show GST-inclusive prices prominently in all displays, advertisements, publications and quotations to the public. The only exception is businesses in the hotel and food & beverage (F&B) industries, which may display GST-exclusive prices for goods and services that are subject to service charge.
With effect from 1 Apr 2015, where businesses display both GST-inclusive and GST-exclusive prices, the GST-inclusive price must be at least as prominent as the GST-exclusive price. It is an offense to display only GST-exclusive prices, or to display GST-exclusive prices more prominently than GST-inclusive prices. Each of these offenses can result in a fine of $5,000 or in default of payment, an imprisonment term of up to 6 months.
In the past 3 years, IRAS has penalized or issued warning letters to about 90 businesses for failing to display GST-inclusive prices. IRAS has stepped up on its checks in 2016 on businesses not complying with the price display requirements.
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