What is the GST ACAP?

In line with the growing focus of tax authorities on tax governance and risk management, the Goods and Services Tax ("GST") Assisted Compliance Assurance Programme ("ACAP") was introduced by the IRAS to encourage businesses to set up a robust GST control framework to ensure the proper accounting of GST on business transactions.

The aims of the ACAP can be broken down into the following distinct areas:

  • Facilitate GST- registered business to set up a robust GST control framework
  • Encourage businesses to Undertake a holistic review of its system processes and capabilities
  • Identify, assess and mitigate GST risks
  • Ensure correct GST reporting on an ongoing basis

Upon completion of the GST ACAP review by an accredited ACAP reviewer of the organisation’s Entity Level controls, Transaction Level controls and GST Reporting Level controls, the IRAS will accord the business an ACAP status.

The status granted is dependent on the level and robustness of the internal controls reviewed and comprise “ACAP Premium” (valid for 5 years) or “ACAP Merit” (valid for 3 years) status. The status also represents a step-down of IRAS GST audits on the business.

Benefits of the GST ACAP

  • Saves cost
    Saves cost
    You can receive a full waiver of penalties identified over previous 5 years’ errors and may identify and recover GST overpaid/underclaimed to/from IRAS over the previous 5 years
  • Preferential treatment
    Preferential treatment
    After undergoing the ACAP review, there will likely be a step-down of IRAS GST audits. You may also see benefits from expeditious GST refunds, a dedicated team from IRAS for assistance on any GST matters and auto-renewal of any GST schemes
  • Improved governance
    Improved governance
    On top of demonstrating commitment towards good tax governance and compliance, the ACAP review could also provide Senior Management a ‘snap-shot’ view of the company’s business processes and control frameworks and existing gaps. This may also act as a benchmark standard for other jurisdictions where the Group may have a business presence.

Insights into the GST ACAP process

Phase 1 – Getting ready for ACAP

Phase 1 – Getting ready for ACAP

This phase involves:
1. Confirming the company meets the relevant eligibility conditions.
-
2. Performing a self-assessment on the current business controls and processes in place and document the responses in the “Self-Review of GST Controls” checklist (“SRC Checklist”), which is a questionnaire of yes or no questions.
-
3. Submitting the GST Form 23 “Participation in GST ACAP”, the completed SRC Checklist and confirmation of the company’s accredited Public Accounting Entity and ACAP reviewer (i.e. Grant Thornton.)
How we can help
While the primary responsibility of this phase is placed on the ACAP applicant (in this case, “you” or “your company”), we will work with you to advise on your assessments in the SRC Checklist and determine whether your business is eligible to participate in the ACAP.

Phase 2 – Commencement and conduct of ACAP Review

Phase 2 – Commencement and conduct of ACAP Review

This phase involves
1. Agreeing a mutually beneficial timeline, identify project stakeholders and key responsibilities to ensure a smooth engagement process.
-
2. Reviewing and confirming your responses in the SRC Checklist and conducting an initial risk assessment. This will enable us to validate the relevant periods and business entities and/or units subject to review (e.g. if the ACAP applicant is a GST group, the review will be conducted on the key group members.)
-
3. Working with you to map out and review the effectiveness of the company’s existing internal GST controls and process at the three levels - the entity level, transaction level and GST reporting level. Based on the review, we can advise on designing and implementing new business controls and or processes to close the gaps.
How we can help
This phase is primarily the responsibility of the ACAP Reviewer. As an accredited ACAP reviewer, our team will work with the process owners in a collaborative manner. The review is conducted using different approaches and techniques including, interviews, process walk-throughs, targeted test of controls and substantive testing.

Phase 3 – Consolidate and submit findings to the IRAS as required

Phase 3 – Consolidate and submit findings to the IRAS as required

This phase involves
1. Consolidating and evaluating our findings documented during Phase 2. We will also consider and document any improvements to be implemented the address the controls gaps identified.
-
2. Reviewing the extent of the errors identified in phase 2. Considering if any of the GST errors identified affect prior years and, if so, advise on a basis of quantifying the errors.
-
3. Finalising and submitting the ACAP deliverables to the IRAS for accreditation.
How we can help
The IRAS attributes the primary responsibility of this phase to the ACAP applicant. However, our experience shows that we are often best placed to advise and consolidate the findings documented during phase 2. After which, we meet with you to discuss and agree with the deliverables prior to their submission to the IRAS.

Phase 4 – Assessment of ACAP status

Phase 4 – Assessment of ACAP status

This phase involves
The IRAS has a dedicated ACAP team who is responsible for reviewing the ACAP deliverables and awarding the ACAP accreditation status. In our experience, this process usually takes 4 to 6 months. The IRAS will issue a final letter summarising the GST errors identified (if any) and award the relevant ACAP accreditation status.
How we can help
During this period, it is common for the IRAS to raise queries and request additional supporting documents and information. We will liaise with the IRAS and guide you in addressing and resolving their queries in a smooth and efficient manner.

Phase 5 – Post ACAP and maintenance of ACAP status

Phase 5 – Post ACAP and maintenance of ACAP status

Post-ACAP Review ("PAR")
Although the ACAP accreditation status awarded by the IRAS is valid for 3 to 5 years (dependent on the actual status achieved), one of the requirements for the accreditation is that the Company undertakes two Post-ACAP Reviews (“PAR”), one of which is for the renewal of the ACAP status. A PAR is less intensive than a normal ACAP review as the focus is on the tax classification controls instead of the entire transaction process; and tests of controls are only on new or major changes to business processes with a lower sample size of documents for substantive review.
How we can help
We can help you with the ongoing maintenance of your ACAP status, including leveraging the knowledge gained during the ACAP Review to facilitate efficient completion of the two subsequent Post-ACAP Reviews as your accredited reviewer.

Why Grant Thornton?

Grant Thornton is an IRAS-approved ACAP reviewer with a dedicated team of accredited GST specialists ready to listen, advise and support you at every step of the ACAP process.

Over the years, we have advised and assisted numerous clients, across a spectrum of industries. To date, all our clients have been granted “ACAP Premium” status, which is the highest ACAP accreditation possible. 

Our teams take a holistic approach to ACAP engagements which looks beyond GST. This approach enables us to identify other business risks and opportunities to achieve the best outcome for you.

Jeremy O’Neill
Singapore
Senior Manager - Indirect Tax
Jeremy O’Neill
Singapore
Jeremy heads up the Goods and Services tax (GST) service line in Grant Thornton Singapore. He specialises in indirect tax matters and also has experience in UK and UAE.
Learn more about Jeremy O’Neill
Jeremy O’Neill
Senior Manager - Indirect Tax
Jeremy O’Neill