Other BriefingsASEAN Regulatory Brief: Singapore GST Audits, Philippines Dormant Bank Accounts, and Malaysia-China Bilateral Ties
Singapore: Tax Authority to Step Up GST Audits
The Inland Revenue Authority of Singapore (IRAS) stated they will step up GST audits for large businesses in 2016 and 2017. While large businesses form only 2 percent of the GST taxpayer base, they contribute more than 50 percent of revenues from GST. Although large businesses have complex business arrangements and high-value transactions, most of them outsource finance functions to locations outside Singapore, which may not be fully compliant with Singapore’s GST rules, and thereby increasing risks of error.
Companies that are found to have discrepancies during the audit will attract fines of up to two times the tax underpaid and a 5 percent late payment penalty. The IRAS has encouraged GST taxpayers to participate in its Assisted Compliance Assurance Programme (ACAP) to avoid audit exemption and one-off full waiver of penalties. Large companies operating in Singapore, including multinational corporations, should ensure they are compliant with all relevant rules and regulations related to GST.
RELATED: International Tax Planning Services from Dezan Shira & Associates
Philippines: Central Bank Tightens Rules on Inactive Deposits
The country’s central bank Bangko Sentral ng Pilipinas (BSP) has issued new guidelines on dormant deposit accounts and related fees charged by banks through Circular 928, which was signed on October 24. As per the new rules, banks, non-stock savings and loan associations (NSSLAs) can impose up to US$ 0.6 (PHP 30) as a monthly dormancy fee and will require a longer notification process before such accounts can be labelled as dormant.
The monthly fee can only be charged if the there is no deposit or withdrawal from an account for five years, if the deposit is below the minimum monthly average daily balance and if the depository bank or NSSLA has complied with the notification requirements. The rules apply to retail customers. Banks will have to notify customers at least two months in advance of the accounts becoming dormant and before charging a dormancy fee. Banks will have to notify through postal mail, courier, email, telephone or any other means. In addition, for local remittances, only the sender will be charged transaction fees as compared to the previous rule where both senders and receivers were charged fees.
RELATED: Philippines Set to Lower Corporate Income Tax under Duterte
Malaysia and China strengthen bilateral ties
Malaysia signed 14 Memorandums of Understanding (MoU) in defense, economy, agricultural, education, finance and construction sectors worth US$ 34 million (RM 143 billion). The MoUs were signed during Malaysian Prime Minister Najib Razak’s visit to Beijing. Among the agreements signed were renewal of education cooperation with China, a financial agreement with Malaysia Rail Link and Export-Import Bank of China. In addition, a two-year deal in defense to supply and build four ships was also signed. China will also fund the planned East Coast Rail Line (ECRL) in Malaysia by giving US$ 13 million (RM 55 billion) in soft loans for the project. It will also provide engineering and design for the ECRL, procure all materials and equipment and deliver the facility to Malaysia.
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For the first issue of our ASEAN Briefing Magazine, we look at the different audit and compliance regulations of five of the main economies in ASEAN. We firstly focus on the accounting standards, filing processes, and requirements for Indonesia, Malaysia, Thailand and the Philippines. We then provide similar information on Singapore, and offer a closer examination of the city-state’s generous audit exemptions for small-and-medium sized enterprises.
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