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 summarised as follows:
Upon completion of the GST ACAP review by an accredited ACAP reviewer such as Grant Thornton, of the organisation’s Entity Level controls, Transaction Level controls and GST Reporting Level controls, the IRAS will accord the business an ACAP status which will reduce the exposure to GST audits by the IRAS.
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.
You will 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 past 5 years
After undergoing the ACAP review, you can expect 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
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.
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.
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.
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.
The IRAS has a dedicated ACAP team who is responsible for reviewing the ACAP deliverables and awarding the ACAP accreditation status.
Based on current 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.
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.
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.
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.
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.
