Purpose of ACAP

GST ACAP is a compliance initiative for businesses that set up robust GST Control Framework as part of good corporate governance.

Businesses may, on a voluntary basis, conduct a holistic risk-based review to endorse the effectiveness of their GST controls.

In the long run, with a structure and a visible tax function properly set up to manage the proper accounting of GST on the business transactions, businesses would have sustainable compliance framework to ensure correct GST reporting on an ongoing basis.

In turn, a reduced risk of non-compliance with GST law ("GST risks") ultimately allows businesses to reap productivity gains - savings in both time and money.

Adoption of ACAP

Since the introduction of ACAP in 2011, over 600 businesses from different industries have successfully applied for ACAP.

As at 31 Mar 2018, more than 400 businesses have attained ACAP status.   

More than 90% of businesses with ACAP status expiring have applied for renewal.

Businesses Suited for ACAP

This programme is suited for businesses that:

  1. Have complex structures and business models;
  2. Engage in voluminous transactions;
  3. Place emphasis on tax risk management as part of their corporate governance; and
  4. Rely on extensive in-built controls in their systems and processes to generate timely and accurate data for financial and tax reporting.

Elements of GST Control Framework

  1. Entity Level
     Objectives Control Features
    Senior Management  * 
    Incorporates GST risk management approach as part of the corporate governance. 

    Senior Management and/or Boards of Directors
    Maintains oversight of important GST matters. 
    Control features pertaining to GST are established in: 
    • Control Environment
    • Control Activities
    • System Controls
    • Change Management
    • Information and Communication
    • Monitoring and Review
    * Senior management refers to persons charged with executive responsibilities for the conduct of the entity's operations such as Chief Executive Officer, Chief Financial Officer and Chief Compliance Officer.

  2. Transaction Level
    Objectives  Control Features
    Ensure the transactions are: 
    • properly tax classified
    • accurately captured
    Essential preventive and detective controls are established for Sales and Purchases Cycles to manage GST risks. 

    Two main GST risks are: 

    a) Compliance risk 
    Risk that a transaction may not be correctly tax classified or comply with requirements under the GST law. 

    b) Processing risk 
    Risk that the processes in capturing the transaction may not be effective in generating accurate data. 
  3. GST Reporting Level
     ObjectivesControl Features 
    Ensure data extracted and compiled for reporting in GST returns are accurate and complete.  Control features are established at: 
    • extraction of data
    • compilation of data (including making adjustments to comply with GST reporting rules)
    • filing of GST returns  

 

Qualifying for ACAP

You are eligible for ACAP if you meet the following conditions:

  1. You have established acceptable GST Control Framework with key controls (listed in the 'Self-Review of GST Controls') established at Entity, Transaction and GST Reporting levels.
  2. The auditor's opinion on your latest financial statements is unqualified.
  3.  You are registered for GST for at least three years.
  4. You are currently not under any GST audit conducted by IRAS.
  5. You have good compliance records (including no tax outstanding with IRAS) for GST, Income Tax, Property Tax and with the Singapore Customs.
  6. You commit to engage a qualified ACAP Reviewer to conduct ACAP Review.

To find out more about ACAP, please read e-Tax Guide on GST: Assisted Compliance Assurance Programme (ACAP)  (516KB).

You can access whether your GST Control Framework is ready for ACAP by completing the Self-Review of GST Controls  (1.38MB).

Independent ACAP Reviewers

ACAP must be conducted by an independent ACAP Reviewer to verify that the GST Controls at Entity, Transaction and GST Reporting Levels are working well for the 12-month period of review ("ACAP Period").

The ACAP Reviewer can be:

  1. A Public Accounting Entity (PAE) or its tax affiliate where the team lead is an Accredited Tax Advisor (GST) of Singapore Institute of Accredited Tax Professionals (SIATP); or
  2. An independent in-house Internal Audit (IA) team and the team member is an Accredited Tax Practitioner (GST) or an Accredited Tax Advisor (GST) of SIATP; or
  3. A team comprising both (1) and (2).

The scope of review of GST Controls is based on the methodology set out in  GST ACAP Review Guidance  (1.11MB).

^ For more details on accreditation of tax advisors or tax practitioners, please refer to the SIATP website.

How does ACAP work?

There are 4 milestones in the ACAP Process:

ACAP milestones

For details of each milestone, please read the e-Tax Guide  (516KB) and GST ACAP Review Guidance  (1.11MB).

ACAP Premium and Merit Status

When your independent ACAP Reviewer verifies that your GST controls at all three levels are working well in managing GST risks and ensuring continual GST compliance and you attain certain benchmarks in the level of controls, you will be accorded either: 

  1. 'ACAP Premium' Status (for 5 years); or
  2. 'ACAP Merit' Status (for 3 years).

 To find out the details of the benchmarks required for the three level of controls, please read paragraph 11 of the e-Tax Guide  (516KB).

After Award of ACAP Status

You have to perform two Post ACAP Reviews ("PAR") to ensure accuracy of your past GST returns filed. Timely disclosure of errors will enjoy waiver of penalties or reduced penalties under IRAS' Voluntary Disclosure Programme.

To find out the details on PAR, please read paragraphs 12.1 to 12.6 of the e-Tax Guide  (516KB).

Benefits of ACAP

You will enjoy the following benefits during the five-year or three-year period of your ACAP Status:

  1. Step down of IRAS-GST compliance activities unless significant anomalies are noted in your GST declarations;

  2. Expeditious GST refunds, if no anomalies are noted;

  3. Dedicated team to handle your GST rulings and resolve GST issues expeditiously; and

  4. Auto-renewal of GST schemes (e.g. Major Exporter Scheme), if applicable.

Penalty Waiver for Early Participation

Businesses adopting ACAP framework show their commitment towards proactive tax risk management and in building a robust GST compliance infrastructure to ensure GST compliance on an ongoing basis.

To signal support for businesses that have implemented effective GST Control Framework and sought independent verification that the controls work well, IRAS will offer one-time waiver of penalties* for voluntary disclosure of the past non-fraudulent GST errors under ACAP.

*The current penalty waiver will cease on 31 Mar 2019. IRAS will grant a final extension of the penalty waiver for another 5 years till 31 Mar 2024. 

To be eligible for the penalty waiver, you must:

  • Notify IRAS of your ACAP participation by 31 Mar 2024; and
  • Complete the conduct of first ACAP within 15 months of IRAS' acceptance of your ACAP participation and attain an ACAP status.

    For example, if you apply on 30 Apr 2018 and IRAS accepts on 30 May 2018, you have to submit the ACAP Report no later than 29 Aug 2019 (i.e. 15 months from the acceptance date).

Applying for ACAP

To apply for ACAP, please complete form  GST F23 - Participation in GST Assisted Compliance Assurance Programme (ACAP)  (51KB).

If you do not wish to undertake ACAP, you are encouraged to adopt the GST Control Practices in the Self-Review of GST Controls to enhance your GST Control Framework and improve GST compliance capability, where appropriate.

Renewing ACAP Status

If you are intending to renew your ACAP status, you should initiate the process at the start of the last year of your ACAP status. You will not be required to perform the second Post ACAP Review (PAR) if you renew your ACAP status, which is due 6 months before the expiry date of your ACAP status.

Your renewed ACAP status will be valid for 6 years for 'ACAP Premium' status or 4 years for 'ACAP Merit' status.

The scope of review for ACAP Renewal is less intensive than the first-time ACAP review. The key differences are as follows:

  1. The Test Period for the conduct of review testing is reduced to 3 months (first-time ACAP Review: 6 months).
  2. Walk-through is only required on tax classification controls instead of the entire transaction process.
  3. Tests of controls are required only if there are new or major changes to business processes (e.g. outsourcing, new accounting software) since the last PAR.
  4. A lower sample size to conduct substantive review of documents.

 You have to engage an independent reviewer to conduct a review of your past GST returns filed in a 12-month period ("Review Year").

To find out more about renewal of ACAP status, please refer to e-Tax Guide on GST: Renewal of ACAP Status  (1.03MB).

Qualifying for ACAP Renewal

You are eligible to renew your ACAP status if you meet the following conditions:

  1. You have continued to maintain an acceptable GST Control Framework with key controls (listed in the 'Self-Review of GST Controls') established at Entity, Transaction and GST Reporting levels.
  2. The auditor's opinion on your latest financial statements is unqualified.
  3. You are currently not under any investigation conducted by IRAS.
  4. You have good compliance records (including no tax outstanding with IRAS) for GST, Income Tax, Property Tax and with the Singapore Customs.
  5. You commit to engage a qualified ACAP Reviewer to conduct review for ACAP Renewal.

What does ACAP Renewal involve?

The following shows the process of ACAP Renewal:

ACAP milestones

Benefits of Renewing ACAP Status

Based on your GST Control Framework's score and your ACAP Reviewer's findings, we will renew your ACAP status as follows:
  1. 'ACAP Premium' Status - with a validity period of 6 years;
  2. 'ACAP Merit' Status - with a validity period of 4 years.

You will enjoy the following benefits during the six-year or four-year period of your renewed ACAP Status:

  1. Step-down of IRAS-GST compliance activities unless significant anomalies are noted in GST declarations;
  2. Expeditious GST refunds, if no anomalies are noted;
  3. Dedicated team to handle your GST rulings and resolve GST issues expeditiously;
  4. Auto-renewal of the GST schemes (e.g. Major Exporter Scheme), if applicable; and
  5. Zero or reduced penalties under IRAS' VDP for past GST errors disclosed on a timely basis to IRAS. Specifically, the penalty will be waived on GST errors that occurred during the Review Year if it is voluntarily disclosed within one year from the statutory filing date of the last GST return of the Review Year.

Applying for ACAP Renewal

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