Income Tax – Director Behind PIC Sham Convicted


It was reported in IRAS’ website on 20 July 2017 that Selladorai Dharmalingam (“Selladorai”), the sole director of Al Bright Construction Pte. Ltd. (“Al Bright”), has been convicted and sentenced for abusing the Productivity and Innovation Credit (PIC) scheme by giving false information to illegally obtain a PIC cash payout and bonus for Al Bright.

IRAS’ investigation revealed that Selladorai authorized the submission of the PIC Cash Payout Application Form by Al Bright to claim $50,461.20 in PIC cash payout and $15,000 in PIC bonus, for the purported expenditure of $84,102 to purchase an electric overhead crane.  However, there was no such expenditure incurred by Al Bright nor any such equipment was purchased.

Selladorai was convicted of giving false information to the Comptroller of Income Tax in order to obtain a PIC cash payout and PIC bonus which the company Al Bright was not entitled to. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of PIC cash payout that Al Bright had wrongfully obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

What does this mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC fraud will have to pay a penalty of up to four times the amount of cash payout fraudulently obtained, or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

If you have any questions, contact us at support@whm-consulting.com.

Singapore GST – Robotic Ice-Cream Machine Company Director Sentenced to Jail for GST Evasion


It was reported in the IRAS’ website on 6 July 2017 that Robofusion Asia Pte Ltd (“Robofusion”), which is a company in the business of supplying robotic ice-cream kiosks, has been convicted of evading GST  by overstating GST input tax on its GST return. Robert Taramelli (“Taramelli”), the company director, was also convicted for his role in assisting the company to evade GST.

IRAS’ investigations revealed that Taramelli assisted Robofusion to evade tax by maintaining a false record, i.e. by including a false invoice dated 10 Sep 2013 that he had created, purportedly from a supplier, showing GST amounting to $35,667.85, into Robofusion’s taxable purchases listing.  He included the GST amount of $35,667.85 in the amount of input tax claimed in Robofusion’s GST return for the accounting period 1 Sep 2013 to 30 Sep 2013. The false invoice was for the supposed purchase of 10 units of a machine by Robofusion from the supplier for the total amount of $509,540.72.  Investigations revealed that the actual tax invoice, which had the same invoice number, had already been claimed in Robofusion’s GST return for an earlier accounting period ended Jun 2013.

For his offense of willful intent to assist Robofusion to evade tax, Taramelli was sentenced to 6 weeks’ in jail and ordered to pay a penalty of $107,003.55, which is 3X of the GST input tax of $35,667.85.

Robofusion was sentenced to pay a penalty of $107,003.55, which is 3X the amount of GST undercharged, and a fine of $8,000.

If you have any questions regarding the above, please contact support@whm-consulting.com.

Singapore GST – Amendment to the GST Guide for the Aerospace Industry


The IRAS has amended its e-Tax Guide on “GST Guide for the Aerospace Industry” on 19 June 2017 and clarifies the following:

For repairs and modification work to qualify for zero-rating under Section 21(3)(p) of the GST Act, the aircraft or aircraft parts on which they are performed must remain airworthy and the necessary documents specified in paragraph 5.3.1 of the e-Tax Guide are maintained. This is as zero-rating relief is accorded on the basis that the repaired aircraft part would, following the repair or maintenance, form part of a qualifying aircraft. Specifically, for repair and maintenance services performed on aircraft parts which fall under paragraph 5.1(c), if it cannot be proved that the aircraft part remains airworthy following the services performed (i.e. absence of a supporting ARC/COC), zero-rating under section 21(3)(p) would not apply.

This is as zero-rating relief is accorded on the basis that the repaired aircraft part would, following the repair or maintenance, form part of a qualifying aircraft.  Specifically, for repair and maintenance services performed on aircraft parts, if it cannot be proven that the aircraft part remains airworthy following the services performed (i.e. absence of a supporting ARC/COC), zero-rating under section 21(3)(p) would not apply.

If you have any questions regarding the above, contact us at support@whm-consulting.com.

Singapore GST – Amendment to the e-Tax Guide on the Use of Business Premises by Third Party for Free


The IRAS has amended its e-Tax Guide on “GST: Guide on the Use of Business Premises by Third Party for Free” on 19 June 2017 by inserting the following example:

Free Occupation by Canteen Operator Engaged to Provide Canteen Catering Services 

A company has engaged a canteen operator to provide canteen catering services at its premises (i.e. in-house canteen) under a service agreement and pays a fee to the canteen operator in return for his services.  The contract does not grant or assign any lease or license or any right to occupy land to the canteen operator. The operating hours, type of food and drinks to be served in the canteen and the food pricing are generally fixed in the contract.  Where the operations of the company’s business make it necessary for the company to provide an in-house canteen to its employees and the canteen operator is merely occupying the canteen space for the purpose of providing his contracted services to the company, the company need not deem a supply on the free use of canteen space.

If you have any questions regarding the above, contact us at support@whm-consulting.com.

Income Tax – Public Consultation on Draft Income Tax (Amendment) Bill 2017


The Ministry of Finance has published for public consultation the Draft Income Tax (Amendment) Bill 2017 to incorporate 34 proposed legislative amendments, including:

1.   Eight Budget 2017 changes, including

  •  Enhancement and extension of the Corporate Income Tax (CIT) rebate for Year of Assessment (YA) 2017 and YA 2018.
  • Introduction of the Personal Income Tax rebate of 20% (capped at S$500) for YA 2017.
  • Liberalisation of the tax deduction for payments under Cost Sharing Agreements (CSAs) for Research and Development (R&D) projects.

2.  Amendment to introduce mandatory Transfer Pricing Documentation Requirement 

To limit compliance burden for smaller businesses, the mandatory TPD requirement will only apply to businesses with a turnover exceeding $10m and significantly related party transactions. The majority of companies will not be affected, as this change will only be relevant to fewer than 5% of all companies, many of which have already been maintaining TPD.

3. 25 Other non-budget changes including

  • Amendments relating to third-party voluntary contributions to the Medisave accounts of private sector employees and self-employed persons (SEPs).
  • Changes to enable the Minister for Finance to implement Singapore’s obligations under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS).

The consultation exercise will end on 10 July 2017.

If you have any questions regarding the above, contact us at support@whm-consulting.com.

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