Singapore: Tax authorities focus on sectors, for audits

Singapore: Tax authorities focus on sectors, for audits

Multinational companies in Singapore currently gathering information and preparing their tax returns to meet the filing deadline of 30 November 2015 need to pay attention to the accurate collation of information and appropriateness of tax adjustments, keeping in mind new rules or requirements both in Singapore and in other jurisdictions. Compliance continues to be a focus of the Inland Revenue Authority of Singapore.

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The Inland Revenue Authority of Singapore (IRAS) reports the following audit statistics:

 

Number of cases

Audit

FY

2011 / 2012

FY

2012 / 2013

FY

2013 / 2014

Individual

income tax

4,137

3,858

4,688

Corporate

income tax

5,007

4,377

6,896

GST

3,210

2,923

3,456

Sectors / areas of focus for audits

The IRAS currently is focused on the construction industry, and recently announced it will also be focusing its audit efforts on the chemical-products wholesale sector and travel and ticketing agencies. 

Other specific compliance areas of focus include whether there are related-party transactions conducted at arm’s length, and the accuracy of a company’s claims for: (1) the production and innovation credit; (2) group relief; (3) capital / industrial building allowance; (4) tax exemption for foreign-sourced dividends; and (5) tax exemption for the first SGD $300,000 by new companies.

The IRAS has made known its stand on certain issues that may trigger an examination or challenge, such as the position of the IRAS that interior design fees do not qualify for a capital allowance claim.  

Companies also need to note that adequate disclosures on the tax return may provide a level of defense.

 

Read a September 2015 report [PDF 401 KB] prepared by the KPMG member firm in Singapore: The Need for More Effective Tax Compliance Strategies

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