1. The Inland Revenue Authority of Singapore (IRAS) recovered $79 million in taxes and penalties from businesses with erroneous Corporate Income Tax (CIT) Returns filed for the Years of Assessment (YA) 2019 to 2021.
2. According to IRAS, cases were selected for audit using advanced data analytic tools, random sampling or from qualitative analysis such as environmental scanning and tip-offs.
3. Through the effective use of these methods, IRAS is able to detect anomalies in the Income Tax Returns of high-risk businesses for audit review.
4. Through the audits, IRAS has observed 4 common Income Tax Filing mistakes:
- Understatement or omission of income due to incomplete recording of revenue
- Incorrect claims of capital allowances on non-qualifying assets
- Failure to apply the arm’s length principle for related party services
- Poor record-keeping and incorrect claims by family-owned/ managed companies
5. Therefore, businesses should take note and avoid making these mistakes when filing their Income Tax Returns.
6. All business owners should also ensure that their Income Tax Returns are filed on time. Failure to file the Income Tax Returns by the due date is an offence under the Income Tax Act, for which you may be subject to penalties of up to $5,000.
7. Contact us if you require assistance on the Income Tax Returns filing. At PL Biz Consulting Pte Ltd, we have the right people and expertise to help guide and explain to you on how to go about filing your Income Tax Returns.
