gst risk management and harnessing technologydownload.isca.org.sg/event/btm1410.pdf · health...

GST risk management and Harnessing Technology ISCA breakfast talk 8 October 2014

Koh Soo How Partner, PwC Singapore Phone: +65 6236 3600 [email protected]

www.pwc.com

Strictly Private and Confidential

PwC

Agenda

• New tax environment

• Cooperative compliance model

• Other GST compliance initiatives and Risk areas

• Harnessing technology

ISCA breakfast talk - GST risk management

2

Oct 2014

New tax environment

3

ISCA breakfast talk - GST risk management Oct 2014

PwC

New tax environment Challenges

Finance & Tax function

• Manage operational risks, systems risks, tax risks and reputational risks

• Pressure to ensure that all tax positions are well managed and under control

• Working with little detail and even less practical guidance on the new challenges

Tax authorities

• Dealing with highly globalised world, rapidly changing businesses, new business models and new cross-border transactions

• Pressures to increase revenue

• Having to do “more with less”


4

Oct 2014

VS

PwC

New tax environment Tax regulatory trends in GST


5

Oct 2014

Shift from direct to indirect and operational taxes

Standardisation and modernisation

Cooperative compliance

Pressures

for change

in finance

and tax

function

PwC

New tax environment Trend no. 1 in GST – Shift from direct to indirect taxes

In Asia,

China is undergoing a Business Tax to VAT (B2V) transformation India proposing a nationwide GST system

Japan consumption tax raised from 5% to 8% (4/2014) to 10% (10/2015)

Malaysia introducing GST at 6% on 1 April 2015


6

Oct 2014

PwC

New GST environment Trend no. 2 in GST - Standardisation and modernisation

This takes the form of

• move to use of XBRL standard for financial reporting

• e-audits to tax auditors being trained on ERP systems (SAP, Oracle)

• increasing use of data analytics to improve tax compliance

• introduction of Standard Audit File for Tax (SAF-T)


7

Oct 2014

PwC

New tax environment Trend no. 3 in GST – Cooperative compliance models

• Growing expectation by tax authorities that taxpayers should take more responsibility and accountability for tax risk management

• Examples

• Netherlands – Horizontal Monitoring

• Australia – Annual Compliance Arrangements

• China – Golden Tax Project and other audit initiatives

• Singapore – Assisted Compliance Assurance Programme (ACAP)


8

Oct 2014

Assisted Compliance Assurance Programme (ACAP)

9


PwC

Cooperative Compliance – an OECD framework

• 2013 OECD report for tax authorities to develop relationships with large businesses based on trust and cooperation

• Introduces compliance risk management strategies

• Encouragement of development of tax control framework

Oct 2014

10


PwC


• GST compliance initiative introduced in April 2011

• Requires taxpayer to conduct a holistic review of company’s systems, processes and capabilities to identify, assess and mitigate GST risks with sign-off by accredited specialist in GST

• Objective is to encourage taxpayer to build an effective GST control framework to manage GST risks


11

Oct 2014

PwC


• Step-down of GST audits for 5 years (ACAP premium) or 3 years (ACAP Merit)

• Faster turnaround of refunds

• Faster issuance of rulings and resolution of issues

• Automatic renewal of GST relief schemes

• Full waiver of penalties for past errors (expires 4 April 2016)

• Co-funding of up to 50% of professional fees or S$50,000 whichever is lower (expires 4 April 2016)

• S$10 million funding expired in April 2014


12

Oct 2014

PwC


13

Entity

• Control Environment

• Control Activities • Change

Management • Communication

and GST knowledge management

• Systems controls

Transaction

• Sales transactions

• Purchases transactions

GST reporting

• Extracting GST report

• Compiling GST data

• Submission of GST return


PwC

Control

Environment

Conduct

periodic GST

Health

Checks

Controls at

the GST

reporting

level

Retaining

Adequate

Evidence

Defined Roles

and

Responsibilities

Documenting

Accounting and

Operational

Process Flows

Periodic

Review of

Processes

Achieving

compliance in

Goods and

Services Tax

(GST)

reporting

• Has the company documented the control

procedures to ensure consistency in

process application and that they remain

relevant for identifying GST risks?

• Are extracted data/reports for compilation

of GST data reviewed for exceptions e.g.

reasonableness test or trend analysis?

• How does the company capture and store

professional advice and IRAS rulings on

GST treatment of new transactions?

• What is the follow up to ensure application?

• Are GST health checks conducted

periodically to identify control gaps in

processes?

• What is the “tone at the top” towards compliance with

GST and tolerance to GST errors?

• How does management identify, manage and monitor

GST risks of all business transactions?

• What is management's attitude towards intervention or

overriding established controls?

• What is the extent of communication in the organisation

for changes in tax laws and rules?

• Has the logistics department retained the

export documents for different export

arrangements?

• For goods imported under the Major

Exporter Scheme (“MES”), how is the

reconciliation of permits on hand against the

permit listing from Singapore Customs

performed? How often is this performed?

• What controls are present to review validity of tax

invoices, disallowed expenses, foreign currency

invoices?

• How does the company ensure that tax invoices are

coded with the correct GST?

• What procedures are in place to flag out deemed

supply rules?

• Has the company documented and updated

the operational and accounting process flows

on a timely basis?

• As part of documentation, has management

also evaluated the design effectiveness so as

to obtain confidence that the controls are

adequately designed?

• For new business models, how does the

company ensure that the GST treatment of all

routine and non-routine transactions are in

compliance?

• How are staff trained to maintain their

competency in handling GST transactions?

• What procedures are in place to monitor and

update the GST library for legislative

changes?

• Are there clear job descriptions which define the roles

and responsibilities of the designated person in charge

of GST matters clearly documented?

• What qualification or experience does the person

handling the company’s GST matters has?

• Are process owners aware of their roles and

responsibilities in contributing towards GST reporting?

• What are the controls to ensure that the accounting

system accurately captures and generates the report

for GST related data with minimal human intervention?

• Does your system allow duplicate records or records

without GST coding to be flagged for follow-up?

• Is there restricted access to staff in the accounting

system?

• How often does the company conduct periodic

reviews of the company’s processes to ensure

that the preventive and detective controls are

working as designed?

• Do you review samples of GST transactions

for technical compliance, accuracy and

completeness?

GST

Knowledge

Management

Transactional-

level controls

System

Controls over

Accounting

System

ACAP control framework

PwC

IRAS’ perspective ACAP as GST Risk Management Framework

Enhanced taxpayer relationship

Established robust internal controls

Established structure and visible

function


15

Oct 2014

Resolve issues real

-time

Prevent and detect errors on a

timely basis

Sustainable compliance framework

Source: IRAS-OECD GST/VAT conference May 2013

PwC

IRAS’ perspective ACAP – key success factors

Win-Win-Win for IRAS,

Business and ACAP

reviewer

Continual engagement of

stakeholders (after ACAP launch)

Co-design and

Creation with Tax

community


16

Oct 2014

Source: IRAS-OECD GST/VAT conference May 2013

PwC

PwC’s perspective of key success ..that this becomes a thing of the past

17


Other GST compliance initiatives and Risk areas

18


PwC

Turning up the heat on GST compliance

• Examples of other GST compliance initiatives

- Industry based audits

- IRAS Audit File for Tax

- Assisted Self-Help Kit (ASK)

- GST Large Taxpayers Engagement Programme (LTP-Engage)

19 ISCA breakfast talk - GST risk management Oct 2014

PwC

Turning up the heat on GST compliance - Industry based audits

• Industries targeted for GST audits:

2009

Electronics wholesale traders,

Small and medium manufacturers,

Motor traders; and

Marine fuel traders

2012

General building contractors;

Private educational institutions; and

Companies that hand-carry exports


PwC 21


PwC 23 ISCA breakfast talk - GST risk management Oct 2014

PwC

Declaration

“I declare that I have reviewed my GST returns for the period xx to xx for the errors described in Appendix 1- scenario 1 to 7 of your letter dated xx and confirm that:

We did not make any errors described in Appendix 1 – Scenario 1 to 7 of your letter dated xx; or

We have made the following errors described in Appendix 1 – Scenario 1 to 7 . The details of the errors are stated in table 1

26

Name of declarant Date of declaration

Designation of declarant Contact number


PwC

Turning up the heat on GST compliance - IRAS Audit File

• Based on OECD’s Guidance Notes (2005) on Standard Audit File-Tax and Tax Compliance for Business and Accounting Software

• Software developers are ‘encouraged’ to incorporate

- adequate internal controls (systems access, back-up and processing logic etc.) to ensure reliability of data

- adequate audit trails and archival and restoration mechanisms

- prescribed data elements for purpose of generating the IRAS Audit File

• Accounting Software Register of approved software maintained by the IRAS


PwC

Turning up the heat on GST compliance - Assisted Self-Help Kit (ASK)

28

• Self-assessment package “to help GST-registered businesses manage their GST compliance”

• Features of ASK (3 sections):

- GST practices in relation to people, record-keeping, systems and internal controls

- Pre-filing checklist

- Annual review of returns

• Sign-off by Accredited Tax Advisor (GST) or Accredited Tax Practitioner (GST)


PwC

Turning up the heat on GST compliance - Assisted Self-Help Kit (ASK)

29

• Compulsory to qualify for the following schemes:

Major Exporter Scheme (MES)

Import GST Deferment Scheme (IGDS)

Approved Marine Customer Scheme (AMCS)

Approved Contract Manufacturer and Trader (ACMT) Scheme

Approved Refiner and Consolidator Scheme (ARCS)

Approved Import GST Suspension Scheme (AISS)


PwC

Turning up the heat on GST compliance - GST Large Taxpayers Engagement Programme

• More than 20 large companies invited to participate in pilot run of the LTP-Engage Programme

• Complements IRAS Corporate Tax Division’s existing Enhanced Taxpayer Relationship (ETR) Programme

• Relationship manager is appointed to each company

• Benefits under the programme:

Speedy resolution of GST issues

Real-time consultation

Feedback on GST rules/policy

30


PwC

GST Risk areas

Possible triggers for audits

• Specific issues

• Risk profiling

• Audits of suppliers and customers

• Third-party information

• Media reports

31

Oct 2014 ISCA breakfast talk - GST risk management

PwC

GST Risk areas

Possible triggers for audits

• Errors and variances in GST F5 return

• GST F7 error returns

• Poor history of compliance

• Variances between GST returns and income tax returns/financial statements

• Refund claims

32


PwC

GST Risk areas

Technical errors

• Incorrect treatment of standard-rated supplies as zero-rated supplies

• Failure to account for GST on non-trade income, fixed asset disposals

• Recharges/rebilling of expenses

• Deemed supplies e.g. provision of gifts

• Fringe benefits

• Claiming of input tax on “blocked” expenses

• No input tax adjustments for exempt supplies nor longer period adjustment performed

33 Oct 2014 ISCA breakfast talk - GST risk management

PwC

Areas of risk in GST

Financial accounting system errors

• Incorrect use of GST codes

• Incorrect decisions in setting up codes

Human errors

• Incorrect entering of data

• Transposition or formula errors

34


PwC

GST Risk areas

Legislative changes

• Failure to identify and take account of legislative or policy changes

Business changes

• Poor communication of business changes (e.g. restructuring) to tax team

35 Oct 2014 ISCA breakfast talk - GST risk management

PwC

So what do I do next?

36


Harnessing technology

37


PwC

38

Back to ACAP - the GST return process


PwC

Harnessing technology Identify opportunities to reduce time and costs

• Per PwC’s Paying Taxes 2014, time to comply for indirect tax is as follows:

• Taiwan – 33 hours

• Singapore – 40 hours

• Australia – 50 hours

• New Zealand – 59 hours

• Indonesia – 90 hours

• China – 106 hours

• Vietnam – 320 hours

39


PwC


Accuracy of VAT/GST returns often compromised by:

• Manual overrides

• Incorrect data entry

• Legislative changes not updated in system

• Incorrect allocation of tax codes

• Insufficient mapping of information and data flows

40


PwC


• Tax staff takes data from accounting system to create return

• Process includes:

• Identifying non-compliant transactions

• Making adjustments

• Running trend analysis

• Running variance analysis

• Reconciliation to the accounts

RESULT: Errors in data => Errors in GST reporting

Automate the process

41


PwC


Expected benefits of technology and automation

• Reduces time taken to review and comply

• Enables reconciliation between returns and financial accounts

• Delivers strong detective controls e.g. duplicate claims, disallowed claims

• Provides trending analysis

42


PwC

Harnessing technology Menu

43


PwC

Harnessing technology Checklist

44

ABC Pte Ltd - Pre-filing Checklist

Section 1: Exception Testing Checks Remarks

1.1 Duplicates within current quarter

a) Taxable purchases

- Exception found and resolved

- Exception found and not resolved

- No exception found

b) Supplies - Standard-rated & Zero-rated




1.2 Duplicates checks against past returns

a) Taxable purchases




b) Supplies - Standard-rated & Zero-rated




……

Section 4 : Trending

- Trending analysis completed

- Trending analysis not completed

Prepared by:

Reviewed by:


PwC

Harnessing technology GST return summary

45


PwC

Harnessing technology Trend analysis

46

Figures reported in the GST F5 return for Financial year end 2012 2011

Box Description/Standard 01/01/2012 04/01/2012 07/01/2012 10/01/2012 01/01/2011 01/04/2011 01/07/2011 01/10/2011

Accounting Period 31 / 3 / 2012 30 / 6 / 2012 30 / 9 / 2012 31/12/2012 31/03/2011 30/06/2011 30/09/2011 31/12/2011

Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total

1 Total Value of Standard-rated Supplies 3,200,200.00 1,765,557.69 1,676,774.00 6,642,531.69 3,200,200.00 1,765,557.69 1,676,774.00 3,200,200.00 9,842,731.69

2 Total Value of Zero-rated Supplies 1.00 12.00 3,743,782.00 3,743,795.00 1.00 12.00 3,743,782.00 1.00 3,743,796.00

3 Total Value of Exempt Supplies 123,000.00 362,771.60 (15,846.00) 469,925.60 123,000.00 362,771.60 (15,846.00) 123,000.00 592,925.60

4 Total Supplies 93,727,936.00 70,308,458.47 5,404,710.00 169,441,104.47 93,727,936.00 70,308,458.47 5,404,710.00 93,727,936.00 263,169,040.47

5 Total Value of Taxable Purchases - 6,556,767.21 3,874,984.00 10,431,751.21 - 6,556,767.21 3,874,984.00 - 10,431,751.21

6 Output Tax Due 1.00 333,589.03 117,374.16 450,964.19 1.00 333,589.03 117,374.16 1.00 450,965.19

7 Less: Input Tax and Refunds Claimed 71,578.80 (45,638.09) (45,795.36) (19,854.65) 71,578.80 (45,638.09) (45,795.36) 71,578.80 51,724.15

8 Net GST (117,374.16) 379,227.12 163,169.52 425,022.48 (117,374.16) 379,227.12 163,169.52 (117,374.16) 307,648.32

9 Total value of Goods imported under MES/A3PL or Approved Schemes - 7,084,902.06 11,192,607.00 18,277,509.06 - 7,084,902.06 11,192,607.00 - 18,277,509.06

13 Revenue 3,874,984.00 5,776,569.28 3,154,687.00 12,806,240.28 3,874,984.00 5,776,569.28 3,154,687.00 3,874,984.00 16,681,224.28

14 TP/TS ratio 0.40 0.09 0.72 1.21 0.40 0.09 0.72 0.40 1.61

Trending for Financial Year end 2011 vs 2012

Comments Comments

Trending

Figures reported in the GST F5 return for Financial Year end 2011

Instructions:

Use this tab to complete trending analysis of the return. This will allow you to trend the overall return over historic return data on a quarter-by-quarter basis.

Reviewer should review for anomalies in the GST trend analysis such as:

- Unusual fluctuations in the values of GST supplies [Boxes 1 to 4], taxable purchases [Box 5], output tax [Box 6] and input tax [Box 7]

- Substantial discrepancies between the turnover reported in financial accounts and taxable supplies reported in GST returns

- >1.2 ratio of taxable purchases over total supplies

Anomalies should be investigated and a note made using the notes section.

All notes made here will be stored to the historic record for audit trail and review purposes.

-

0

0

0

0

Q1 Q2 Q3 Q4

MillionsOutput Tax

FY12 FY11

(0)(0)(0)

-0 0 0 0

Q1 Q2 Q3 Q4

MillionsGST Input Tax

FY12 FY11


PwC

Harnessing technology Reconciliation

47

Reconciliation Statement

1 July 2012 to 30 September 2012

RECONCILIATION FOR THE GST F5 RETURN

SGD

1. Total Revenue (Quarterly): 3,154,687.00

2. Total taxable supplies reported in GST F5:

- Standard-rated supplies 1,676,774.00

- Zero-rated supplies 3,743,782.00

5,420,556.00

3. Difference: (2,265,869.00)

Less

4. Total out-of-scope value: (977,328.79)

5. Total Variance (1,288,540.21)

Percentage of variance over total revenue 76%

Total Standard-rated Supplies over Total Supplies ratio for the quarterly

- Standard-rated supplies 1,676,774.00

- Total Supplies 5,404,710.00

Ratio: 31%

NO Please disregard

NO Please disregard

Prepared by / Date:

Reviewed by / Date:

Resolved?

Instructions:

Use this tab to reconcile the supplies values (Box 1 & 2) reported in the GST return w ith the revenue reported in the management report or f inancial

statement. Review er should review for un-reconciling items and any anomalies should be investigated.

Any further adjustments required can be included in item 4 of the reconciliation statement.

a) The ratio is 75% or > 75% and the difference betw een Sales and Declared

Total Supplies is > $150,000; or

b) The ratio is < 75% and the difference betw een Sales and Declared Total

Supplies is > $500,000.

Comments on Variance


PwC

Harnessing technology Exception report - AP/AR duplicates

48

AR Duplicates

Overall Comments

Resolved?

Prepared by: Lee Chen ChewOn 02/09/2013

Reviewed by: Click button above upon completion

# Tax Code Tax Group Name Tax % Doc. No.

Posting

Date

Document

Date

Base

Amount

Tax

Amount Total Tax

Base

Amount SC

Total Tax

(SC) Customer/Supplier name Description

Supplier's

invoice no.

Serial

Numb

er

Delete

Indicator Remarks

10 S1 GST 7% (Local) 7 IN400926 27.07.2012 27.07.2012 537.98 37.66 37.66 424.71 29.73 Sincere Supply Pte Ltd Part sales, Q100682 (partial) 9

11 S1 GST 7% (Local) 7 IN 400926 27.07.2012 27.07.2012 27.36 1.92 1.92 21.60 1.51 Sincere Supply Pte Ltd Part sales, Q100682 (partial) 10

32 S2 Zero-rated 0% 0 IN 400935 27.07.2012 27.07.2012 - - - - - Chains Caravelle Hotel JVCo Ltd CL+TITO Expansion 34

33 S2 Zero-rated 0% 0 IN 400935 27.07.2012 27.07.2012 - - - - - Chains Caravelle Hotel JVCo Ltd CL+TITO Expansion 35

20 S1 GST 7% (Local) 7 IN 400940 27.07.2012 27.07.2012 3,141.40 219.90 219.90 2,480.00 173.60 Resorts World at Sentosa Pte Ltd.GSMA for Q100245 19

21 S1 GST 7% (Local) 7 IN 400940 27.07.2012 27.07.2012 28,272.72 1,979.09 1,979.09 22,320.00 1,562.40 Resorts World at Sentosa Pte Ltd.GSMA for Q100245 20

22 S1 GST 7% (Local) 7 IN 400941 27.07.2012 27.07.2012 120,159.06 8,411.14 8,411.14 94,860.00 6,640.20 Resorts World at Sentosa Pte Ltd.Jul12 - 73M RWS GSMA 21

23 S1 GST 7% (Local) 7 IN 400941 27.07.2012 27.07.2012 12,958.44 907.08 907.08 10,230.00 716.10 Resorts World at Sentosa Pte Ltd.Jul12 - 73M RWS GSMA 22

34 S2 Zero-rated 0% 0 IN 400949 21.08.2012 21.08.2012 160,239.50 - - 128,500.00 - Genting Malaysia Berhad 50 x system kits, Q100710 301

40 S2 Zero-rated 0% 0 IN 400949 21.08.2012 21.08.2012 - - - - - Genting Malaysia Berhad 307

41 S2 Zero-rated 0% 0 IN 400949 21.08.2012 21.08.2012 - - - - - Genting Malaysia Berhad 308

37 S2 Zero-rated 0% 0 IN 400955 23.08.2012 23.08.2012 7,997.09 - - 6,413.07 - IGT Asia -Macau Lda Intercom expenses recharge 304

45 S2 Zero-rated 0% 0 IN 400955 23.08.2012 23.08.2012 623.50 - - 500.00 - IGT Asia -Macau Lda Intercom expenses recharge 312

6 S1 GST 7% (Local) 7 IN 400957 24.08.2012 24.08.2012 12,756.92 892.98 892.98 10,230.00 716.10 Resorts World at Sentosa Pte Ltd.RWS GSMA 274

7 S1 GST 7% (Local) 7 IN 400957 24.08.2012 24.08.2012 118,290.42 8,280.33 8,280.33 94,860.00 6,640.20 Resorts World at Sentosa Pte Ltd.RWS GSMA P1 275

8 S1 GST 7% (Local) 7 IN 400958 24.08.2012 24.08.2012 1,159.72 81.18 81.18 930.00 65.10 Resorts World at Sentosa Pte Ltd.2xVF, 4xBTTF GSMAP2 276

9 S1 GST 7% (Local) 7 IN 400958 24.08.2012 24.08.2012 9,277.68 649.44 649.44 7,440.00 520.80 Resorts World at Sentosa Pte Ltd.2xVF, 4xBTTF GSMAP3 277

10 S1 GST 7% (Local) 7 IN 400959 24.08.2012 24.08.2012 3,092.56 216.48 216.48 2,480.00 173.60 Resorts World at Sentosa Pte Ltd.GSMA for Q100245P4 278

11 S1 GST 7% (Local) 7 IN 400959 24.08.2012 24.08.2012 27,833.04 1,948.31 1,948.31 22,320.00 1,562.40 Resorts World at Sentosa Pte Ltd.GSMA for Q100245P5 279

29 S2 Zero-rated 0% 0 IN 400981 07.09.2012 07.09.2012 - - - - - KGIM Conversion sales, Q100741 527



16 S1 GST 7% (Local) 7 IN 401001 28.09.2012 28.09.2012 12,386.88 867.08 867.08 9,900.00 693.00 Resorts World at Sentosa Pte Ltd.RWS GSMA 514

17 S1 GST 7% (Local) 7 IN 401001 28.09.2012 28.09.2012 114,860.16 8,040.21 8,040.21 91,800.00 6,426.00 Resorts World at Sentosa Pte Ltd.RWS GSMA 515

18 S1 GST 7% (Local) 7 IN 401002 28.09.2012 28.09.2012 9,008.64 630.60 630.60 7,200.00 504.00 Resorts World at Sentosa Pte Ltd.2xVF, 4xBTTF GSMA 516

19 S1 GST 7% (Local) 7 IN 401002 28.09.2012 28.09.2012 1,126.08 78.83 78.83 900.00 63.00 Resorts World at Sentosa Pte Ltd.2xVF, 4xBTTF GSMA 517

20 S1 GST 7% (Local) 7 IN 401003 28.09.2012 28.09.2012 3,002.88 210.20 210.20 2,400.00 168.00 Resorts World at Sentosa Pte Ltd.GSMA for Q100245 518

21 S1 GST 7% (Local) 7 IN 401003 28.09.2012 28.09.2012 27,025.92 1,891.81 1,891.81 21,600.00 1,512.00 Resorts World at Sentosa Pte Ltd.GSMA for Q100245 519

36 S2 Zero-rated 0% 0 IN 401007 25.09.2012 25.09.2012 75.47 - - 60.32 - IGT Philippines Drop ship to RWM 533

37 S2 Zero-rated 0% 0 IN 401007 25.09.2012 25.09.2012 1,272.75 - - 1,017.23 - IGT Philippines Drop ship to RWM 534

25 S1 GST 7% (Local) 7 IN 401017 28.09.2012 28.09.2012 36,727.72 2,570.94 2,570.94 29,354.00 2,054.78 Resorts World at Sentosa Pte Ltd.Adv. system maintenance 523

26 S1 GST 7% (Local) 7 IN 401017 28.09.2012 28.09.2012 135,242.31 9,466.96 9,466.96 108,090.08 7,566.31 Resorts World at Sentosa Pte Ltd.Adv. system maintenance 524

Instructions:

This report generates a list of taxable supplies

transactions w hich are reported more than one time w ithin

the same quarter.Review er is to identify the actual

duplicate transactions and mark the transaction as "Y" in

the "Delete Indicator" column (column Q) to exclude such

transactions.All notes made here w ill be stored to the

Show All Sheets


PwC

Harnessing technology Exception report - Disallowed expenses

49

Disallowed expenses

Overall Comments

Resolved?

Prepared by: Lee Chen ChewOn 02/09/2013

Reviewed by:

#

Tax

Co

de Tax Group Name Tax % Doc. No.

Posting

Date

Document

Date

Base

Amount

Tax

Amount

Total

Tax

Base

Amount SC

Total

Tax

(SC) Customer/Supplier name Description

Supplier's

invoice no.

Serial

Number

155 P5 Out of Scope 0% (Non-GST supplier)- PU 704391 10.07.2012 10.07.2012 (2,382.00) - - (1,880.48) - One World International School SingaporeOWIS Grade 8 July~Sep'12 School Fees for John HousInv1012,1192,1192 141

156 P5 Out of Scope 0% (Non-GST supplier)- PU 704391 10.07.2012 10.07.2012 (4,764.00) - - (3,760.96) - One World International School SingaporeOWIS Grade 8 July~Sep'12 School Fees for John HousInv1012,1192,1192 142

172 P5 Out of Scope 0% (Non-GST supplier)- PU 704572 21.08.2012 21.08.2012 (975.50) - - (782.28) - Marsh (Singapore) Pte Ltd Marsh: Property All Risks Ins Premium 30-Jun-12 toI01132468 427

173 P5 Out of Scope 0% (Non-GST supplier)- PU 704572 21.08.2012 21.08.2012 (4,877.50) - - (3,911.39) - Marsh (Singapore) Pte Ltd Marsh: Property All Risks Ins Premium 30-Jun-12 toI01132468 428

Instructions:

This report generates the list of taxable

purchase transactions w hich are likely to

be disallow ed expenses under the

regulation 26 & 27 of the GST Act.

Review er is to identify the disallow ed

expenses and mark the transaction as "Y"


PwC

End goal is not to become a statistic…

50

Year ended 31 March 2000 2014

No of registered businesses

57,658 91,021

Total tax collected by IRAS

$16.2 bln $41.6 bln

Income tax collected $10.1 bln $21.6 bln

GST collected $2.0 bln $9.5 bln

GST as % of total tax 12.3% 22.8%

Tax and penalties from GST audits

$22.8 mln $183.6 mln

Re: IRAS Annual Report


PwC

Conclusion

51


PwC

Conclusion

• Regulatory landscape changing

• Biggest risk is not recognising the risks with GST reporting

• Reduce the risk with process mapping, flowcharts, manuals, transaction matrix

• Improve operational effectiveness with use of technology

• Risk management should be responsibility of whole organisation


57 52

Thank you

The information contained in this presentation is of a general nature only. It is not meant to be

comprehensive and does not constitute the rendering of legal, tax or other professional advice

or service by PricewaterhouseCoopers Ltd. ("PwC"). PwC has no obligation to update the

information as law and practices change. The application and impact of laws can vary widely

based on the specific facts involved. Before taking any action, please ensure that you obtain

advice specific to your circumstances from your usual PwC client service team or your other

advisers.

The materials contained in this presentation were assembled in May 2014 and were based on

the law enforceable and information available at that time.

© 2014 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its

member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for

further details.

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