Corporate Tax
Companies in Singapore are responsible for filing their income tax returns accurately and honestly. However, a significant proportion of companies fail to comply with corporate income tax regulations, and end up paying stiff penalties which could have been avoided with better information. Regent Corp-Werkz (RCW) believes in creating an environment of full, comprehensive, expert information for companies and supporting them in their corporate tax matters and audits. Many companies every year are selected by IRAS for tax audits. Most of these companies do not know what to expect or how to deal with these audits, especially since directors and administrators in SMEs are not always trained in accounting and tax matters in Singapore.
What do I do if my company is selected for a tax audit?
If your company is selected for a tax audit, you will be contacted either via the telephone or correspondence. IRAS auditors will interview you to understand your business better, and to familiarize themselves with your accounting system. During the audit, IRAS auditors will examine your company’s books and records — at your premises or at the IRAS office. The results of the audit are expressed in a set of findings, in which IRAS will inform your company about any adjustments that are necessary to the tax assessment(s) in question, and issue the Notice(s) of Additional / Amended Assessment. IRAS will make recommendations to your company to comply with tax laws. Having a professional firm at hand if you are selected for a tax audit helps you to consolidate the information you need, and highlight what is needed for the audit. It also helps you to make the audit process as seamless as possible, leaving you time to carry on with your business activities with minimum disruption during the audit.
The IRAS has identified the most common errors in company income tax returns in Singapore:
- Understatement of income
- Overstatement of purchases and other expenses
- Wrongful claims for expenses under Section 15(1) of the Income Tax Act.
- Failure to ascertain the actual closing stock value
- Failure to report income from other sources
- Failure to report employee’s benefit
- Failure to withhold tax when making payment of a specified nature to Non-Resident Persons
How can I lower my penalties?
If you realize that you made an omission or error in your income tax return, you can voluntarily disclose it to IRAS. Generally, this results in a significantly lower penalty than if the omissions or errors were discovered in an audit performed by IRAS. A professional accounting firm like RCW can help your company to identify omissions and errors quickly and accurately, contributing to a better compliance record.
What happens if there are errors discovered by IRAS auditors?
It is an offense to submit an incorrect tax return in Singapore. Companies face penalties of up to double the amount of tax undercharged if errors or omissions are discovered. If the IRAS identifies a case of fraud, penalties can be up to triple the amount of tax undercharged. Some company directors have faced prosecution as a result of serious income tax errors.
How can I avoid penalties and errors?
The best way to avoid penalties and errors in income tax fi ling is through expertise. Professional accounting firms in Singapore with the expertise, experience and know-how can help your company to avoid non-compliance, and maintain a clean, untarnished record. It is not difficult to avoid errors with the assistance of a professional accounting firm like RCW, which is familiar with Singapore regulations for corporate income tax filing. RCW accountants painstakingly go through your accounts, provide you with detailed and in-depth information, and handle the necessary arrangements so that you can focus your attention on your business.
