The Enhanced Taxpayer Relationship (ETR) Programme was introduced in 2008 as a service initiative and aims to build an open and collaborative taxpayer relationship through regular engagement with large companies, mutually benefitting IRAS and these companies.
The ETR Programme is designed to address the needs of large companies and help these companies manage their tax compliance. It offers large companies the benefits of finalising their tax assessments in a timely manner through a collaborative review process with IRAS, as well as tax certainty on significant current events through consultation with IRAS.
At the same time, IRAS gains a better understanding of the company's business operations and with the knowledge, IRAS is better able to identify and address revenue risk early.
Scope of the ETR Programme
Through the ETR Programme, IRAS and the company's senior management (Chief Financial Officer or equivalent) will meet regularly to address the company's current and emerging tax issues. The involvement of both IRAS' and the company's senior management, as well as the commitment of resources from both parties, will facilitate timely resolution of the company's tax matters.
Large companies with complex business models will benefit most from the ETR Programme as these companies are likely to have more complex tax issues. Currently, IRAS expects to have up to 200 companies on the ETR Programme.
Key Areas of Engagement
Under the ETR Programme, IRAS will engage the large company in one or more of the following key areas:
- Specific issue resolution - IRAS and the company will work on a mutually agreed plan to achieve timely resolution of specific tax issues.
- Generic issue resolution - Issues that are common to companies within a group are identified so that clear and consistent tax treatment can be applied on the same issue across the group.
- Significant current events - IRAS or the company may request early discussion and resolution of an upcoming significant event before filing of the income tax return so that downstream difficulties in assessments and objections can be reduced.
- Review of tax control system - IRAS and the company may work together to assess the adequacy of the company's tax accounting and reporting controls, identify existing and potential gaps and discuss the remedial actions.
How to Participate in the ETR Programme
Companies that contribute a significant amount of tax revenue may be invited to participate in the ETR Programme. These companies are strongly encouraged to participate in the programme, especially if their corporate tax assessments are not up-to-date.
Companies that have not been selected by IRAS to participate in the ETR Programme but wish to do so may apply to IRAS in writing. IRAS will review the application on a case-by-case basis, based on the following criteria:
- Tax contribution from the company;
- Complexity of the company's structure and operations;
- Current state of tax affairs of the company; and
- Company's willingness to commit resources to engage IRAS in the key areas, with the aim of bringing its tax affairs up-to-date.
Assisted Compliance Assurance Programme (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, a structure and a visible function properly set up to evaluate the impact of GST on the business transactions ensures the completeness and accuracy of GST reporting. 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.
Businesses Suited for ACAP
This programme is suited for businesses that:
- Have complex structures and business models;
- Engage in voluminous transactions;
- Place emphasis on tax risk management as part of their corporate governance; and
- Rely on extensive in-built controls in their systems and processes to generate timely and accurate data for financial and tax reporting.
Businesses that have established GST Control Framework at three critical levels (Entity Level, Transaction Level and GST Reporting Level) can undertake ACAP voluntarily.
Elements of GST Control Framework
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
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:
- Compliance risk: risk that a transaction may not be correctly tax classified or comply with requirements under the GST law.
- Processing risk: risk that the processes in capturing the transaction may not be effective in generating accurate data
GST Reporting level
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:
- You have established acceptable GST Control Framework with key controls (listed in the 'Self-Review of GST Controls below') established at Entity, Transaction and GST Reporting levels.
- The auditor's opinion on your latest financial statements is unqualified.
- You are registered for GST for at least three years.
- You are currently not under any GST audit conducted by IRAS.
- You have good compliance records (including no tax outstanding with IRAS) for GST, Income Tax, Property Tax and with the Singapore Customs.
- You commit to engage a qualified ACAP Reviewer to conduct ACAP Review.
Written by Richard Cornelisse
Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.
He started his career as a manager at Arthur Andersen and then became an EY partner where he led the indirect tax performance team for Netherlands and Belgium. Currently, he is a managing director of SAP Tax Consultancy Firm.
Richard has over 20 years of experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service center migration, and post-merger integration work.