Introduction

To keep or not to keep its records - in considering this question, a Singapore-incorporated company should be aware of certain statutorily-provided minimum retention periods it must comply with. This article discusses the minimum retention periods under the following statutes, which are the key legislations in Singapore governing the issue:

1. the Companies Act (Chapter 50 of Singapore Statutes) (the Companies Act);
2. the Income Tax Act (Chapter 134 of Singapore Statutes) (the Income Tax Act); and
3. the Goods and Services Tax Act (Chapter 117A of Singapore Statutes) (the Goods and Services Tax Act).

Companies Act

Pursuant to section 199(1) of the Companies Act, it is mandatory for every company to keep such accounting and other records that will sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets and any documents required to be attached thereto to be prepared from time to time. The relevant records must be kept in such manner as to enable them to be conveniently and properly audited.

Section 199(2) of the Companies Act further provides that a company must retain the records, referred to above, for at least five years commencing from the end of the financial year in which the transactions or operations to which those records relate are completed.

Under section 199(6) of the Companies Act, the company and every officer of the company who fails to comply with the section, shall be guilty of an offence and will be liable on conviction to a fine not exceeding S$5,000 or to imprisonment for a term not exceeding 12 months and also to a default penalty.

Income Tax Act

Under section 67(1) of the Income Tax Act, every person carrying on or exercising any trade, business, profession or vocation:

1. shall keep and retain in safe custody sufficient records for a period of five years from the year of assessment to which any income relates to enable his income and allowable deductions under the Income Tax Act to be readily ascertained by the comptroller or any officer authorised in that behalf by the comptroller; and
2. shall, if the gross receipts from such trade, business, profession or vocation in the preceding calendar year exceeded S$18,000 from the sale of goods, or S$12,000 from the performance of services, issue a printed receipt serially numbered for every sum received in respect of goods sold or services performed in the course of or in connection with such trade, business, profession or vocation, and shall retain a duplicate of every such receipt.

The definition of “records” set out under section 67(5) of the Income Tax Act includes:

1. books of account recording receipts or payments or income or expenditure;
2. invoices, vouchers, receipts, and such other documents as in the opinion of the Comptroller are necessary to verify the entries in any books of account; and
3. any records relating to any trade, business, profession or vocation.

Section 94(1) of the Income Tax Act stipulates that any person who contravenes any of the provisions of this Act shall be guilty of an offence, whereas section 94(2) of the Income Tax Act further provides that any person guilty of an offence under this section for which no other penalty is provided shall be liable on conviction to a fine not exceeding S$1,000 and in default of payment to imprisonment for a term not exceeding six months.

Goods and Services Tax Act

Section 46(1) of the Goods and Services Tax Act provides that the following documents are required to be kept by a company which is liable to be registered under the Goods and Services Tax Act: 

1. the company’s business and accounting records;
2. the company’s accounts;
3. copies of all tax invoices and receipts issued by the company;
4. tax invoices received by the company;
5. documentation relating to importations and exportations by the company;
6. all credit notes, debit notes or other documents which evidence an increase or decrease in consideration that are received, and copies of all such documents issued by the company; and
7. such other records as may be prescribed.

Section 46(2) of the Goods and Services Tax Act goes on to provide that any records kept in pursuance of this section shall be preserved: 

1. in the case of records relating to a prescribed accounting period ending before 1 January 2007, for a period of not less than seven years from the end of the prescribed accounting period; and
2. in the case of records relating to a prescribed accounting period ending on or after 1 January 2007, for a period of not less than five years from the end of the prescribed accounting period.

Under section 46(6) of the Goods and Services Tax Act, a company which without reasonable excuse fails to comply with the section will be guilty of an offence and will be liable on conviction to a fine not exceeding S$5,000 or to imprisonment for a term not exceeding six months or to both. In the case of a second or subsequent conviction, the company will be liable to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding three years or to both.

Dentons Rodyk acknowledges and thanks Sean Gallagher and Julian Foo for their contributions to the article.