Companies operating in Singapore are mandated to maintain proper company records of their financial transactions, accounting records, bank statements and all relevant and related business transactions of their business operations.
If Companies maintain proper company records, it enables them to have a more effective assessment of the financial year.
Companies must maintain proper company records and accounts of all business transactions. Additionally, they must maintain company records of its financial transactions and keep the original documents, accounting records and schedules, together with any other transaction records related to the company.
Financial and accounting records including supporting documents pertaining to the Year of Assessment (YA) 2007, and earlier, should be maintained for seven years from the appropriate YA. For YA 2008 and subsequent YAs, mandatory record keeping time frame has been reduced from seven to five years.
The Income Tax act allows the IRAS to raise an assessment or additional assessment within six years after the end of that YA for assessments prior to YA 2008. Hence, the statutory time finality to raise an assessment, or additional assessment, will be accorded the appropriate reduction from six to four years in tandem with the reduction of record keeping time frame from YA 2008 from seven years to five years.