Singapore Tax Filing Is an Audit Report Really Necessary? One Article Reveals the Truth!

Tax Filing in Singapore Is an Audit Report Really Necessary? Find Out the Truth!

In Singapore, tax filing is an important task for both businesses and individuals. For businesses in particular, whether to submit an audit report during the tax filing process is often a concern for many entrepreneurs and finance professionals. Recently, with the increasing requirements for tax compliance by the Inland Revenue Authority of Singapore IRAS and changes in international accounting standards, this issue has once again sparked extensive discussion.

What is an Audit Report?

An audit report is a document issued by an independent registered accounting firm that details the financial condition, operating results, and cash flow status of a company over a specific period, while evaluating its authenticity and legality. Simply put, an audit report is like a health check-up for a company's financial statements, helping both the company and its stakeholders understand its financial health.

In recent years, due to changes in the global economic environment and growing demands for transparency in corporate governance, more and more companies have begun to attach importance to the role of auditing. For example, according to the latest statistics, by 2025, over 60% of small and medium-sized enterprises in Singapore will choose to hire professional agencies to complete their annual audits, a proportion that has increased by about 15 percentage points compared to last year.

Is an Audit Report Necessary?

So, is an audit report really essential when filing taxes in Singapore? The answer is not absolute. According to Singapore’s Income Tax Act, different-sized enterprises are subject to different rules when filing taxes

1. Small Enterprises If a company’s annual revenue is below a certain limit currently 10 million SGD and meets other conditions, it can apply for exemption from submitting audited financial statements. In such cases, the company only needs to provide unaudited abbreviated accounts to meet tax filing requirements.

2. Medium and Large Enterprises For companies with revenue exceeding the aforementioned threshold or those operating in high-risk sectors such as financial services, submitting audited financial statements is almost mandatory. This is because these companies' financial data is more complex and requires professional third-party review to ensure accuracy.

It should be noted that although some small enterprises may temporarily not need to provide an audit report, this does not mean they can ignore the importance of financial management. On the contrary, good internal control systems can help these companies better cope with potential future audit requirements.

Recent News Updates

Recently, Singapore has further strengthened its requirements for tax transparency, especially taking a series of measures to combat tax evasion. For instance, at the beginning of this year, the Singapore Tax Authority announced it would increase monitoring of cross-border transfer pricing activities and encourage more companies to voluntarily disclose relevant information. These policy adjustments undoubtedly add pressure to some companies, particularly small start-ups that rely on informal channels for funding support.

At the same time, with the development of digital technology, an increasing number of Singaporean companies are starting to adopt cloud accounting software to simplify daily bookkeeping processes. This trend not only improves efficiency but also provides enterprises with more accurate data support, helping to reduce risks caused by human error.

How to Choose the Right Audit Service?

If you decide to arrange a comprehensive audit for your company, then how to select a reliable service provider becomes particularly important. Professional advice can start from the following aspects

Qualification Certification Ensure that the other party holds professional qualifications recognized by the Accounting and Corporate Regulatory Authority ACRA of Singapore;

Experience Prioritize teams with many years of experience and familiarity with the local market;

Customer Reviews Check feedback from past clients to understand their service quality;

Reasonable Price Make a final decision after comparing quotes from multiple providers, avoiding blindly pursuing low prices at the expense of quality.

In conclusion, in such a highly developed and competitive business environment as Singapore, whether to meet legal obligations or enhance competitiveness, making reasonable use of audit resources will become an indispensable part of enterprise development. It is hoped that this article can address your doubts about the necessity of audit reports and provide reference for your decision-making!