Correct and complete income tax return

On 29th August, IRAS announced the conviction of the sole proprietor of Kay Lee Roast Meat Joint for tax evasion, by knowingly under-declaring Kay Lee’s total sales income for two years of assessments in his income tax return submission to IRAS. He was found to have provided estimated monthly sales, from which their accountant would deduct from the lump sum figure to derive Kay Lee’s annual sales income figure for the relevant year of assessments.

However, what this case did not highlight is that in some situations, the taxpayer may not have knowledge of the erroneous information shown on their tax returns.

In this regard, taxpayers should make sure they provide as much information as possible to their preparers – be they, accountants or tax agents, so as to make sure their tax returns are as accurate as possible.  This is because their accountant or tax agent ultimately relies on the information provided to them. The most that the accountant or tax agent can do is to compare the accounts and tax returns with prior year figures, detect any discrepancies and advise accordingly. They can also warn taxpayers of the consequences of false declarations.

Therefore it is important to note that while most preparers provide excellent service to their clients, we urge taxpayers to be very careful when choosing an accountant or tax agent for their tax affairs. In other words, taxpayers should be as careful as they would be in choosing a doctor or a lawyer.


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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