Yes. In general, even a company exempt from audit must keep accounting records and prepare financial statements every year. Audit exemption means the company does not need an external audit, but the obligations to keep accounts and prepare financial statements remain.
Audit exemption is assessed against the small company criteria. A company may be exempt from audit if it meets at least two of the following criteria for the two immediately preceding consecutive financial years, and if there is a parent company, the criteria for the group as a whole are also considered.
Audit exemption does not change the obligation to file financial statements. In addition, under IRAS rules, books and transaction records must be kept for at least 5 years from the relevant Year of Assessment (YA).
Tax treatment can differ depending on the company's revenue, shareholder structure and transactions, so please consult an accounting professional before applying it.
The Lee Kim Alliance accounting team provides accounting and tax consultation.
