On or about 17 Feb 2022, the Inland Revenue Authority of Singapore (IRAS) has published the first edition of the e-Tax Guide on Tax Risk Management and Control Framework for Corporate Income Tax.
The e-Tax guide on Tax Risk Management and Control Framework for Corporate Income Tax (CTRM) provides guidance on the review of an entity’s internal risk management and control system for Corporate Income Tax (CIT) compliance, and the requirements involved for an entity to attain CTRM Status. It aims to help entities better manage their CIT compliance risks.
The CTRM is a programme to promote the adoption of good tax governance principles and practices among large entities, particularly the public listed companies and multi-national corporations. It is designed to help these entities perform a self-review on the robustness and effectiveness of the internal control processes put in place to manage CIT compliance risks.
The CTRM may adopted on a voluntary basis. An application will be required to submit to IRAS where IRAS will review the application and confirm the company’s eligibility to participate in the programme.
Upon IRAS’ confirmation on your eligibility, the company will perform a self-review of internal control processes by completing the IRAS’ CTRM Checklist. The completed self-review CTRM Checklist will have to be reviewed by a CTRM Reviewer and submitted to IRAS together with all other relevant documents. The company will be awarded the CTRM Status if IRAS assesses that internal control processes for CIT compliance are adequate and effective, and that the company has low CIT compliance risks.
IRAS will apply a one-time waiver of penalties once for voluntary disclosure of prior years’ CIT errors and once for voluntary disclosure of withholding tax errors within 3 years of effective CTRM. If it is not applied within this period, the one-time waiver of penalties will continue to be applied to any non-compliance disclosed within a further 3-year period on the renewal of CTRM (if applicable).
The company can also expect a step-down on CIT compliance audit by IRAS.