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IRAS e-Tax Guide

. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature.Published by Inland Revenue Authority of Singapore Published on 31 May 2010 © Inland Revenue Authority of Singapore All rights reserved. including photocopying and recording without the written permission of the copyright holder. application for which should be addressed to the publisher. No part of this publication may be reproduced or transmitted in any form or by any means.

Website Information . Introduction What are records? Why keep your records? How to keep your records? How long to keep your records? Implications of Non-Compliance 2. 2.4.Table of Contents 1.6. 2. 1. Record Keeping 2. Overview 1.1. 2. Information on Different Types of Records Useful Tips for Record Keeping Record Keeping Checklist Appendices 6. 5.3.2. 2. 1.6. 1.1. 6. 1. Record Keeping Requirements Income Records Business Expense Records Purchase Records Accounting Records and Schedules Bank Statements 3. 4.2.2.1. Sample formats of accounting records Industry-specific sample formats of accounting records 7.4.5. 6.5. 1. 2.3.

3. physical invoices. and (d) Any other records of transactions connected with your business.3.1. Having good record keeping practices can benefit you in the following ways: (a) Better internal control of your business to help business planning and decision making. Why keep your records? 1. 1.g. 1.4.1. Manual record keeping is the recording of your business transactions in a physical form.1. Overview Introduction 1. 1. invoices. If you are a GST-registered business. Good record keeping practices are an important part of your business.4. The types of records businesses need to keep include: (a) Source documents that substantiate all transactions in your business . revenue and expenses. receipts.2.e. The 1 This includes sole proprietors.1. The guidelines set out the mandatory records that businesses must keep in order to comply with Singapore Tax laws. You are expected to put in place a record keeping system to ensure that your Income Tax declarations are duly supported with the required documents. etc. 1. limited liability partnerships.4. Manual Records 1.1. gains (profit) and losses.1. (b) An essential source of evidence to detect business losses. partnerships. (b) Accounting records and schedules .2. What are records? 1. This guide is designed to help businesses1 in preparing and keeping records for Income Tax purposes.1. 1. limited partnerships and companies . 1. How to keep your records? 1. you should refer to the Guide “Record Keeping Guide for GST-Registered Businesses” in preparing and keeping records for both Income Tax purposes and Goods and Services Tax (“GST”) purposes.1. and other relevant documents issued or received from customers/suppliers.2. receipts. vouchers.2. Examples of manual records are record books.3. internal fraud and theft. It is the responsibility of business owners and company directors to ensure that proper records are kept.1. and (c) Reduces cost and effort on collating information when preparing for your tax and other reporting obligations.1.manual or electronic records of assets and liabilities. (c) Bank statements.

4.4.the “Guide for Keeping of Records in Imaging System” and the “Guide for Keeping Records of Business and Transactions in Microforms” list the requirements and security measures that taxpayers must comply with. manual recording system may no longer be adequate for your needs.Two e-Tax Guides .2. .2. Records can also be kept electronically through the use of a computer and/or accounting software (including electronic tax invoices). For source documents (e. However.2. 1.3. receipts. Electronic Records 1. you can keep either the paper form or electronic form. You may wish to keep your business records in images2 or in microforms3. efficient and more accurate manner.2. 3 Microforms include only microfilms: microfiches and ultra fiches wherein microimages of information are stored.1.g. as your business expands and the number of transactions increases.1.Business transactions must be supported by source documents such as receipts/invoices from your suppliers and carbon/ duplicate copies of sales invoices/receipts issued to your customers. 1. A manual recording system may be sufficient for businesses with small volume of transactions. you must make sure that you keep all your records in a legible and well-organised manner. providing summaries and reports for tax purposes and e-filing your tax returns and other reporting obligations conveniently. a retailer with many outlets would find electronic recording system more beneficial to manage his/her business records. 1.2. 1. For instance.4.4. Advantages of keeping records electronically include: (a) Recording of your business transactions (including revenue.1. When you keep your records manually. you should organise your records by date. and retain photocopies of receipts if the original copies fade over time.4. off-the-shelf accounting software and customised accounting software. payments details. vouchers. etc).4. Using an electronic record keeping system will incur lower manpower costs as you would not have to manually track each and every business transaction.4. (d) Requiring less storage space compared to paper records. 1. invoices. (b) Using an accounting software may give you a timely and up-to-date picture of your business performance to plan and forecast your business future.4. Manual Records Versus Electronic Records 1. This includes using Microsoft Office applications. (e) Facilitating the backing up of records and allowing back-ups to be kept in a safer place in the event of theft or natural disasters like floods or fire. (c) Facilitating the generation of invoices. 1.3. electronic or other means.2. which is stored in electronically.4.3. 2 Image refers to a representation of a document generated by photographic. For example. customer particulars and stock/assets details) in a quick. Source documents must be kept to substantiate your business transactions.

8.1. In the event any of your records are missing or destroyed. It is your responsibility to keep proper records. The “recommended records” are records that the businesses are advised to keep.6. and in such a manner that will enable the Comptroller of Income Tax to verify the figures you state when filing your Income Tax returns. failure to keep and retain sufficient records as stipulated in Paragraph 1. How long to keep your records? 1.6.4. However. You should back up your records for your own business good. your business records must be kept up-to-date. For electronic records. Record Keeping Record Keeping Requirements 2.7.4. it is your responsibility to make use of other relevant documents to reproduce your business records. 2.g.1.4. 2. 2.5. In the absence of sufficient records. This guide defines “required records” as the mandatory records that businesses must keep for tax purposes.2. capital allowance) may be disallowed in the event of insufficient supporting documents.1. Not doing so may result in: (a) Expenses claimed being disallowed.6. .4.5 is an offence.1.1. 1. Under the Income Tax Act. 1.1. the Comptroller of Income Tax will refer to available sources to best estimate the financial conditions of your business.2.5. There is no specified way on how to keep your records. which provides a summarised list of the different types of records. and these should be reproduced upon request by Comptroller of Income Tax. Under the Income Tax Act. The record-keeping duration of seven years has been shortened to five years for accounting periods ending on or after 1 January 2007.5. Expenses or other claims (e.1. the e-Tax Guide . Refer to paragraph 5 for the “Record Keeping Checklist”.5. 1. 1. persons liable to pay income tax are required to keep their business records for at least seven years. Implications of Non-Compliance 1.“Guide for Keeping Machinesensible Records and Electronic Invoicing” explains the requirements and security measures that taxpayers must comply with. for accounting periods ending before 1 January 2007. 1. 1. or/and (b) Penalties being imposed. Businesses no longer need to apply to IRAS for approval to issue tax invoices electronically.

2. and be able to.1. Business Expense Records 2.3. air waybill.5.5. (b) Payment vouchers on payment made to individuals/companies for services rendered and the relevant contracts/agreements on the provision of services. and be able to.2. for e. (b) Rental agreements signed by both landlord and tenant to explain your rental income. (e) Statement of accounts such as Balance sheet and Profit and Loss Statements. explain ALL transactions relating to your business expenses.1. Sales record book to explain your sales transactions. 2. bill of lading. profit and losses. Income Records 2. Purchase Records 2.g. for e.1. (e) Documents relating to your exports. Businesses must retain records for. (c) Books/documents to record goods taken for private consumption. (c) Payment vouchers for staff remuneration.4.4. .2. The records required are as follow: (a) Tax invoices. 2.g. cash register tapes or invoices issued to explain each sales transaction. revenue and expenses. The records required are as follow: (a) Invoices received or receipts received to explain each business expense. import permit. (b) Documents relating to your imports. explain ALL purchase transactions. The records required are as follow: (a) Serially numbered receipts issued. explain ALL transactions relating to your income records. (d) Credit notes for returned goods. bill of lading. General ledgers to record your assets and liabilities.1. export permit.2. delivery order. Businesses must retain records for. (d) Employer’s CPF contributions. invoices or receipts received to explain each purchase transaction. air waybill. Businesses must keep accounting records and schedules to summarise your records in a systematic order. Purchase record book to explain your purchase transactions. These include: (a) (b) (c) (d) Stock lists to explain your trading stock on hand at the end of each accounting period. Businesses must retain records for. and be able to.3. Accounting Records and Schedules 2.

invoices. Regularly depositing of all business income into your business bank account will help you keep track of your business revenue. You will not know the amount of these charges until you received a bank statement.6.sg)4. These templates may be found at IRAS’ website (www. It is advisable to retain the bank statements for your business.5. 2.6. 2.gov. You are encouraged to pay for all purchases and expenses by cheque to help create a trail of your business transactions that will appear in your bank statement.5. . we recommend that separate bank accounts be used for personal and business purposes. In addition. They form a vital part of your account keeping and should be safely filed away in chronological order.6. Detailed schedules of overseas travelling expenses. and other relevant documents) that will help explain these accounting records and schedules should the Comptroller of Income Tax require an explanation. The entries in the bank statement may differ from your record book entries because direct debits.2.1.6.4.iras.3.3. Failure to substantiate expenses and purchases of fixed assets may lead to claims for tax deductions and capital allowances being disallowed. Detailed schedules of entertainment expenses. 2. Bank statements show the bank’s record of your transactions with the bank during the month. These may include: (a) (b) (c) (d) (e) Detailed schedules of public transport expenses. If separate bank accounts are not kept.4. IRAS provides sample working sheets for businesses in specific industries to prepare the statement of accounts. 2. vouchers. Businesses must also keep the source documents (such as receipts. you must be able to differentiate between personal and business transactions. 2. In addition.6. bank charges and interest may be deducted from your bank account. Fixed asset schedules.2. Bank Statements 2. For sole-proprietors/self-employed. You are advised to do regular bank reconciliation to update your record book with the charges found in your bank statement. 2.2.5. Records of capital allowance that you have already claimed. it is advisable to keep a set of the following accounting records.

3. and a duplicate copy must be retained. 3. A cash register. Practices such as using a cash register.1. When making purchases for business purposes. 3.3. You can use receipts issued by you to explain your sales transactions.1. Information on Different Types of Records Cash Register Tapes 3. Receipts 3.4.2. as the waiver of issuance of receipts is not the same as a waiver on issuance of tax invoices. you should record the total amount of receipts in a record book manually or electronically at the end of the day.2. As a good practice.2. which has an internal tape.2. or a sales book should be maintained to help proper recording of all sales transactions. you should ask for a receipt regardless of whether you pay by cash or cheque.2.1. . There must be a welldocumented audit trail to show that all sales transactions are correctly recorded and declared for tax purposes. The details that should be shown on a receipt are: (a) (b) (c) (d) Date Name of supplier or service provider Amount paid Description of goods or services being paid for. 3. 3. accounting software. Since July 2003. The receipts must be serially numbered. If it doesn’t contain sufficient details. This is part of our efforts to simplify rules and procedures.3.5.2. Receipts will help you to support or justify payments made if disputes arise later. you must ensure that all cash sales are recorded via the cash register and the internal tape is retained as a source document. Businesses must however ensure complete and accurate recording of their sales transactions even when they decide not to issue receipts. IRAS does not require businesses to come forward to seek approval for not issuing receipts. (b) GST-registered businesses must continue to issue tax invoices as required by GST legislation. can be used to record all your cash sales. It should be noted that in all cases: (a) You must still issue receipts to customers if requested. If you are using a cash register.1.2.2. but it may not always describe the goods or services that have been paid for. an additional notation should be recorded on the receipt.6. 3. A receipt from a cash register would generally be sufficient. 3.

. you are required to maintain import and export permits. or partial/full waiver of charges before the delivery of goods. etc. address and GST registration number (if applicable). telephone number and business registration number. invoice.4. 3.5. The total amount credited. "returned goods". The quantity and amount credited for each description. An identification number e. damaged or incorrect invoicing). address. bill of lading/ air waybill/ IESGP permit.6. 3.for example.2. 3. and The number and date of the original tax invoice (if applicable). e. The rate and amount of tax credited. The total amount credited. RefertoAppendix2forasample“CreditNote”.g. The reason for the credit given . a serial number.5.3. 3. (e) The description of goods or services. (g) The total price. Books/ Documents to Record Goods Taken for Private Consumption 3. (b) The date of issue of the invoice.2.3. (f) Any cash discount offered.3.5. The date of issue. or supply has not taken place. defects. 3.5. (d) Your customer’s name & address. If you issue a sales invoice. the sales invoice should contain the following information: (a) Your name/Business name. incorrect quantities. (c) An identifying number. A credit note must show clearly: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Your name/Business name.3.1.g.1. Credit notes are issued to customers for goods which have been sold but later returned or to give a credit to the customer. the sales price of the stock taken for private use should be added to your sales record.g. 3. Transactions such as returned goods due to genuine mistakes (e.6.4. Invoices 3.1. Documents Relating to Imports and Exports 3. If you take stock from your business for your own private consumption. If your business involves importation and exportation of goods. excluding tax. invoice number. A description sufficient to identify the goods and services for which credit is being allowed. including tax.3. Your customer's name and address. You may design your own invoices and get them printed or buy pre-printed invoices from stationery suppliers.1. quantity and price. need to be recorded because they reduce the corresponding sales figures. Credit Notes 3.

you are required to include the following details on the payment voucher: (a) (b) (c) (d) 3. You are recommended to keep the following expense schedules for claiming of for tax deductions: (a) Public Transport Expenses. If sales takings are used to pay for your purchases or operating expenses. free-lance book-keeping and sales commission.1. etc). Purchase Record Book 3. Person incurring it .1. Full name. identification number and job scope (b) Payment vouchers or remuneration schedule (c) CPF statements for your claims of employer’s CPF contributions 3. Expenses incurred for business purposes qualify for tax deduction. packing list/ delivery note.9. 3. Staff Remuneration and employer’s CPF Contributions 3. You can issue payment vouchers instead of paying cash to individuals for services rendered (e. insurance documents and evidence of payment. To substantiate these payments. Expense Schedules 3. bonus.10. RefertoAppendix3forasample“StaffRemunerationRecord”. Mode of transport III. You need to keep the following records: (a) Details of employees including full name. 3. You may use these records to prepare the Return of Employee’s Remuneration (Form IR8A).11.10. Purchase record book accounts for the purchases that were made daily.7. Refer to Appendix5forasample“PurchaseRecord”.1.1. Payment Vouchers on Payments Made to Individuals for Services Rendered 3. commission and allowances.purchase order. 3. identification number and address of the recipient Date and nature of payment Basis of arriving at the quantum paid Acknowledgement of receipt by the recipient Sales Record Book 3.1.8. Date and destination II. you must record the sales takings used and include these in your net sales. cleaning fees.8.g. with the following details recorded for each travel: I. salaries.7. 3. Staff remuneration includes wages.2. Refer to Appendix4forasample“SalesRecord”. Please note that gross sales takings are to be reported in your income tax returns as “turnover”.11.9.7.

iras. You should keep records of capital allowances you have already claimed as deductions so that you can calculate your entitlement to capital allowances in subsequent years. with the following details recorded: I.12. .12. travel documents.gov. Date and destination Mode of transport Person incurring it Purpose and duration of overseas travel Amount incurred (c) Entertainment Expenses.12. However. overseas travelling expenses. 3. II. IV. hire purchase agreements) Invoices 3.1. invoices which substantiate your public transport expenses. you may claim capital allowances. Date and place of entertainment Name of the person(s) entertained Purpose of entertainment Person incurring it 3. V. For more information on capital allowances. Credit card slips or monthly credit card statements alone are not sufficient to substantiate your claims. RefertoAppendix9forasample“FixedAssetSchedule”. A fixed asset schedule should be able to explain all expenditure relating to assets. Refer to Appendix 6.2. A business usually has a number of assets. with the following details recorded for each travel: I. III. Amount incurred (b) Overseas Travelling Expenses. Purpose of travel V.13. IV. The amounts incurred in purchasing these assets are capital in nature and are not deductible for tax purposes. III.IV. Receipts and documents such as taxi receipts. such as plant and equipment and motor vehicles. 7 and 8 for samples of “Travelling Expenses Record”. and entertainment expenses should be kept.g. Capital Allowance 3. II. You are advised to prepare a fixed asset schedule at the time you start your business so that you can record the assets purchased. refer to IRAS website (http://www.2. the dates of purchase and their costs. Fixed Asset Schedules 3.1.11. 3. The following details or documents should be kept for each of the assets: (a) (b) (c) (d) Date of purchase and cost Date of sale and sale price (if applicable) Copies of contracts of purchase and sale (e.sg)5.13. “Public Transport Expenses Record” and “EntertainmentExpensesRecord”.

manufactured. when you make a payment. Stock List 3. Do not leave record keeping until the end of the year because the longer you leave it.3. 4. not just by yourself or your accounts personnel. (d) It is a good idea to cross reference records. This will help you to manage your cash flow. as well as facilitate the locating of files and reconciliation of your business transactions. A good filing system will help you to follow up on overdue debt and alert you when your payments are due. acquired or purchased for the purposes of manufacture or sale. 4.2. Preparing a stock list will help you to explain your trading stock on hand at the end of each accounting period. indicate the cheque number on the invoice. For example. Do not leave it until later. 3. (f) Make sure you enter all transactions accurately into your record books. (e) It is a good habit to enter your transactions regularly to keep your records up-to-date. Useful Tips for Record Keeping Here are some best practices: (a) Set up a good filing system for your paperwork from the start of your business. . Refer to Appendix 10 for a sample“StockList”. (c) Obtain the necessary source documents at the time of a transaction. (b) Make sure your records can be understood by anyone. You will need these source documents to support your claims for tax deductions.1.14. a physical stock count should be carried out at the end of accounting period. Trading stock includes anything produced. To determine the closing stock value. the more difficult it is to catch up.14.14.1.

with separate bank accounts for personal and business purposes must BANK STATEMENT advised .5. Profit and Loss Statement Item No 1 2 3 4 5 Record Type (Recommended) ACCOUNTING RECORDS AND SCHEDULES Item No 1 2 3 4 5 6 Documents Recommended Detailed schedules of Public Transport expenses Detailed schedules of Travelling expenses Detailed schedules of Entertainment expenses Fixed asset Schedules Records of Capital Allowances Bank statements. Record Keeping Checklist Source Documents Record Type (Required) INCOME RECORDS (Records of each sales transaction) Record Keeping Requirements Item No 1 2 3 4 5 6 7 8 9 10 11 Documents Required Serially numbered receipts issued or cash register tapes or invoices issued Rental Agreement signed by both landlord and tenant Books to record goods taken for private usage Credit notes for returned goods Documents relating to exports Invoice received or Receipt received Payment made to individuals/companies for services rendered and the relevant contracts/agreements on the provision of services Payment vouchers for staff remuneration Employer’s CPF contributions Tax invoices received. Invoices received or Receipt received Documents relating to imports BUSINESS EXPENSE RECORDS (Records of each business expense transaction) PURCHASE RECORDS (Records of each purchase transaction) ACCOUNTING RECORDS AND SCHEDULES Record Type (Required) ACCOUNTING RECORDS AND SCHEDULES Record Keeping Requirements Documents Required Stock List Sales Record Book/ Sales Listing Purchase Record Book/ Purchase Listing General Ledgers Balance Sheet.

Appendices Sample formats of accounting records 6.2.sg. 6.2. .1.1.iras. 7.6. 1A: Computation of Adjusted Profit / Loss 1B: Balance Sheet 2: Credit Note 3: Staff Remuneration Record 4: Daily Gross Sales Record 5: Daily Purchase Record 6: Public Transport Expenses Record 7: Travelling Expenses Record 8: Entertainment Expenses Record 9: Fixed Asset Schedule 10: Stock List Industry-specific sample formats of accounting records For industry-specific requirements. Follow the link: About IRAS > Taxpayer Compliance > Record Keeping Essentials for Businesses). 6.1. Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix Appendix 6. Website Information More information on your tax obligations is available on IRAS website (http://www. please refer to the Appendices below: Appendix 11: Hawkers Appendix 12: Wellness Industry Appendix 13: Getai Organisers 7. Please refer to the Appendices for an explanation of each record type.1.1.gov.