Singapore

Taxable period

The tax basis period is the calendar year; however, the accounting period will generally be adopted.

Tax returns

Tax is computed for each tax year based on the income earned in the preceding year (the tax basis period). The corporation files an estimate of its income within three months of the end of the accounting period followed by a return of income by 30 November of the tax year, and the tax is assessed by the Comptroller of Income Tax. All companies are required to file their tax returns electronically. There is no fixed date for the issue of assessments.

Payment of tax

Assessed tax is payable within one month after the service of the notice of assessment, whether or not a notice of objection to the assessment has been lodged with the tax authorities. Application may be made to the Comptroller to pay estimated tax liabilities on a monthly basis. However, the Comptroller is under no obligation to grant such an application.

Late payment of tax will attract penalties, up to a maximum of 17% of the outstanding tax.

Tax audit process

The IRAS adopts a risk-based approach in carrying out compliance actions. It identifies and prioritises key compliance risks and develops programmes to address those risks.

The IRAS takes a comprehensive approach towards income tax compliance by companies by conducting both risk-based and random audits across all industries to ensure good coverage across the corporate base. It uses data analytics and other tools to profile companies according to their compliance risk.

As GST is a self-assessed tax. The IRAS conducts regular audits to encourage voluntary compliance among taxpayers. It identifies key areas of compliance risks among taxpayers and adopts a risk-based approach to tailor specific compliance programmes for higher risk industries.

Statute of limitations

The statute of limitations is four years from the year of assessment, but does not apply where there has been fraud or wilful default by the taxpayer.

Topics of focus for tax authorities

The IRAS is focusing its compliance efforts on the following:

• WHT.
• The timely filing of corporate tax returns.
• Claiming of private or non-deductible expenses.
• The classification of income and expenses for income taxable at concessionary and prevailing corporate tax rates.
• The recognition of income from construction contracts and provisions claimed by construction companies.
• Companies that are dormant and exempted from filing corporate income tax returns.
• Taxability of income/gains from sale of properties.
• Digital economy.
• Deductibility of interest expenses and borrowing costs.

The IRAS is currently focusing its GST audits and investigation efforts on  the following:

• Businesses involved in Missing Trader Fraud arrangements.

• Businesses that sell non-residential properties.

• GST-registered sole-proprietors who have not accounted for the correct amount of supplies and output tax in their GST returns.