How Long Should I Keep Business Records?

It’s a common question – How long should we retain my company's business records? Inland Revenue Authority of Singapore ("IRAS") states that companies are required to keep proper records and accounts of business transactions. The company must maintain proper records of its financial transactions and retain the source documents, accounting records and schedules, bank statements and any other records of transactions connected with the business.

Duration for Records and Accounts Keeping

IRAS states that accounting records and supporting documents relating to Year of Assessment (YA) 2008 and subsequent YAs, the company must retain the records for a period of five years from the relevant YA. Failure to do so may result in the expenses claimed being disallowed or/and penalties.

What if my company has already been struck off?

Where a company has been struck off and dissolved, a person who was an officer of the company immediately before the company was dissolved must ensure that all books and papers of the company are retained for a period of at least five years after the date on which the company was dissolved.

Where a company is being wound up, the liquidator of the company must ensure that all the books and papers of the company are retained for a period of at least five years from the date of dissolution of the company.

What happens if I do not keep the business records for the required amount of time?

It is an offence under the Income Tax Act and/or GST Act to not keep proper business records for 5 years. Failure to produce the required business records when IRAS requests for them will result in the following.

• Expenses claims, capital allowances or GST input tax claims may be disallowed.
• Penalties may be imposed

Record-Keeping Requirements for GST-Registered Businesses

IRAS e-Tax guide provides an overview of the mandatory record-keeping requirements for all GST registered businesses. According to IRAS e-Tax guide, the businesses must keep their records for five (5) years just like non-GST-registered businesses. The types of records businesses need to keep include:

• Source documents that substantiate all business transactions e.g. receipts, invoices, vouchers, other relevant documents issued or received from customers/suppliers, bank statements;
• Accounting ledgers, schedules and journals documenting a business’ assets and liabilities, income and expenses, profits and losses; and
• Any other written evidence of transactions connected with your business.

Can we keep the documents in Electronic Forms?

According to IRAS e-Tax guide, records can be kept electronically using a computer and/or accounting software. This includes using Microsoft Office applications, off-the-shelf accounting software, customised accounting software and image systems. Physical copies of source documents need not be kept to substantiate the business transactions for tax purposes if the source documents are kept electronically. In addition, businesses do not need to seek approval from IRAS to keep their records in an electronic format for tax purposes. However, IRAS states that businesses should ensure that proper internal controls are put in place to ensure the integrity, completeness, accuracy, availability and reliability of the electronic records, including all transactions executed electronically, where applicable.