Singapore GST – Company director jailed 4 weeks for omitting to account for GST on property sale


It was reported in IRAS’ website on 1 June 2018 that Kho Foong Kuin, a director of Speed Safety International Pte Ltd (“Speed Safety”), has been convicted for not reporting the amount of GST collected from the sale of a non-residential property at Tuas View Place (the “Property”) in the company’s GST return with wilful intent to evade GST.

IRAS’ investigations revealed that Speed Safety had disposed of the Property on 30 June 2014. The purchaser paid Speed Safety $828,000 for the Property and $57,960 for the 7% GST on the selling price.

Kho, who was responsible for filing GST returns for Speed Safety, had previously made a full claim from IRAS on the input tax amounting to $45,454.49 paid for the purchase of the Property.  She knew that she was required to declare and pay IRAS the output tax of $57,960.00 collected for the sale of the Property.  However, she intentionally did not do so as she wanted to use the sales proceeds, including the GST collected, to alleviate Speed Safety’s financial difficulties.

The Court sentenced Kho to 4 weeks’ jail and ordered her to pay a penalty of $173,880, which is 3X of the amount of GST evaded.

What does this mean to you?

For Singapore GST purposes, GST-registered businesses have to account for GST collected on the sale of non-residential properties as an output tax in their GST returns. At the same time, they can claim the GST paid on the purchase of non-residential properties as an input tax in their GST returns provided that the conditions for input tax claim are satisfied.

It is a serious offence to omit or understate output tax on sales. Offenders face a penalty that is up to 3 times the amount of tax undercharged, and a fine not exceeding $10,000 or imprisonment of up to 7 years or to both.

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Singapore GST – Guide on Exemption of Investment Precious Metals (IPM)


On 22 May 2018, IRAS issued the second edition of the e-Tax Guide on Exemption of Investment Precious Metals and the amendment to this e-Tax Guide includes the following:

  • Paragraph 4.7 of the e-Tax Guide has been updated to include the qualifying IPM coins
  • Paragraph 10.1 has been amended pertaining to the contact information.

 

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Singapore GST – Former Singapore Customs Officer Jailed for Fraudulently Obtaining GST Tourist Refunds


It was reported in IRAS’ website on 20 April 2018 that Ms. Pang Yeow Biah, who was a former Singapore Customs Officer, was charged for fraudulently obtaining GST tourist refunds under the electronic tourist refund scheme (“eTRS”).

Between 2012 and 2014, Pang was a Singapore Customs officer who was deployed at the GST Refund Inspection Counter at Changi Airport.  Her main duty was to process GST refund claims made by tourists leaving Singapore.  When the opportunity arose during her course of work, she would take the details of these “rejected” GST refund claims and use the eTRS system to electronically process the GST refunds into her own credit cards or credit cards that were under her control.  In addition, Pang had used the eTRS self-help kiosks to obtain the GST refunds which she was not entitled to.

The GST refunds were obtained through Pang’s misuse of two credit cards that were registered in her son’s ex-girlfriend’s name but under Pang’s control.  Pang then used the GST refunds to repay her own credit card debts.

Pang pleaded guilty to 10 charges of fraudulently obtaining GST tourist refunds amounting to $8,302.05 under section 62(1)(e) of the GST Act and three charges under section 47(1)(c) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”).

The court sentenced Pang to 15 months’ imprisonment and a penalty of $24,906.15, which is 3X  the amount of tax defrauded. Pang was sentenced to 4 weeks’ imprisonment for her CDSA offences, resulting in a total sentence of 15 months and 4 weeks’ imprisonment.

Message from Singapore Customs and IRAS

  1.   Measures such as built-in system checks are in place to identify cases to be selected for further inspection. Through data analytics, IRAS and Singapore Customs are able to detect suspicious GST refund claims and fraudulent activities.
  2. Singapore has always adopted a zero-tolerance approach towards tax fraud, money laundering, and other criminal activities. The authorities take a serious view of such criminal practices and will take swift action against any individuals and parties involved.

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Singapore GST – Revised e-Tax Guide on ACAP


The Inland Revenue Authority of Singapore (“IRAS”) revised the e-Tax Guide on the Assisted Compliance Assurance Programme (“ACAP”) on 2 April 2018 by extending the current penalty waiver from 31 March 2019 to a final extension date of 31 March 2024.

In other words, IRAS will be prepared to waiver penalties for genuine non-wilful GST errors in the course of ACAP review when the taxpayer

  •  notify IRAS by 31 Mar 2024 of his intention to embark on your first ACAP;
  • settle the additional taxes; and
  • attain ‘ACAP Premium’ or ‘ACAP Merit’ status.

According to the e-Tax Guide, this is a one-time of the normal 1-year grace period under the IRAS’ Voluntary Disclosure Programme (VDP), as recognition of your efforts to strengthen the effectiveness of the overall GST controls to ensure continual GST compliance. If any of the above conditions is not satisfied, IRAS may impose a reduced penalty under the normal VDP rules, for non-wilful GST errors made.

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Income Tax – Three individuals to be charged for tax evasion of rental income


It was reported on IRAS’ website on 16 March 2018 that 3 individuals were charged in the court in 2 separate cases for tax evasion on their rental income.

  • 2 persons were charged on 16 March 2018, for the omission of rental income from their tax returns.  More specifically, one of them faced 4 charges involving omitted rental income amounting to $411,252 for Years of Assessment (YAs) 2010 to 2013 which resulted in a total of $69,065.20 in tax undercharged. The other faced 3 charges involving omitted rental income amounting to $299,769 for YAs 2012 to 2014 which resulted in a total of $52,854.75 in tax undercharged. In addition, this individual will face another charge for the non-filing of his income tax returns.
  • One would be charged on 13 April 2018  for submitting falsified invoices to IRAS to support claims made for rental expenses between YAs 2009 to 2013. The individual will face 5 charges involving the submission of falsified invoices that amounted to $284,308.52. This resulted in a total of $56,499.91 in taxes undercharged.

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