IRAS recovers $79m in taxes and penalties

The audits revealed 4 common tax filing mistakes amongst companies.

The Inland Revenue Authority of Singapore (IRAS) recovered $79m in taxes and penalties between July 2020 and June 2023.

This came from companies with erroneous Corporate Income Tax (CIT) Returns filed for the Years of Assessment (YA) 2019 to 2021.

Two-thirds of all the cases audited were picked up through IRAS’ compliance audit programmes with the use of advanced data analytic tools.

The remaining cases were identified from random sampling, environmental scanning, and tip-offs.

IRAS observed 4 common tax filing mistakes including:

1. Understatement or omission of income due to incomplete recording of revenue.
2. Incorrect claims of capital allowances on non-qualifying assets.
3. Failure to apply the arm’s length principle for related party services. 
4. Poor record-keeping and incorrect claims by family-owned/ managed companies.

IRAS reminded all companies to file their YA 2023 CIT Returns by 30 November 2023.

Failure to comply by the due date is an offence under the Income Tax Act, for which companies may be subject to penalties of up to $5k.