Sole Proprietor was sentenced to jail for committing GST fraud


Dear Valued Clients and Readers

It was reported in IRAS’ website (see GST Fraud) that a sole proprietor was sentenced to jail and fined for S$413k for committing GST fraud.

The facts provided by IRAS were as follows:

1.    The taxpayer was a sole-proprietor of his business in 1996 whose principal activities are wholesale of parts and accessories for vehicles.  The business was registered for GST in 1998 and the taxpayer was responsible for the GST compliance for his business.

2.    IRAS’ investigation revealed that the taxpayer had declared fictitious input tax claims in the relevant GST returns from September 2000 to September 2007 by adding transhipments goods of the business into the relevant GST returns under the value of taxable purposes although the fact was that no GST was incurred by the business.  IRAS also found out that the taxpayer had burnt the physical copies of the records in order to impede IRAS’ investigations when he realized that IRAS requested records to assess the amount of tax undercharged.

3.   Taxpayer finally admitted that he obtained fraudulent refunds from the Comptroller of GST due to greed.  He pleaded guilty to 11 charges of creating false entries in the relevant GST returns to evade tax, and 3 charges for destruction of supporting documents.  18 charges of creating false entries were taken into consideration for sentencing.  He faced a penalty of S$413K which is 3 times the amount of tax undercharged.

This case provided us with three important reminders for the purpose of GST compliance:

  • There is no time limit for IRAS to initiate any recovery action for tax undercharged if fraud is committed on the part of the taxpayer.
  • Input tax can only be claimed by businesses if they have incurred GST on purchases against their taxable supplies (including domestic sales and export sales) provided that the essential conditions for making claims can be satisfied.
As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

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New e-Tax Guides Published by IRAS on 6 September 2011


Dear Valued Clients and Readers

You may wish to note that the Inland Revenue Authority of Singapore had issued new e-Tax Guides on the following subject matters on 6 September 2011:

a) Foreign-Sourced Income Exemption Rule

b) Ascertainment of Income From Business of Making Investment – Section 10E

c) Group Loss Relief System

The above are in line with IRAS’ effort in educating taxpayers and increasing their understanding of the tax law so as to comply in full with their income tax reporting obligation.

As stated in IRAS’ website, IRAS adopts a risk-based approach of identifying compliance risk and prioritising and tailoring specific compliance programmes with a view to

1.  Identifying taxpayers who have made mistakes in their tax returns;

2.  Creating an audit presence in the community to deter non-compliance by other taxpayers;

3.  Educating taxpayers on their tax obligations and how to comply; and

4.  Identifying tax laws, policies and processes where the tax system can be simplified.

The above means that IRAS is expecting an even higher level of compliance with the tax obligations by taxpayers and less tolerance level in the event that taxpayers file incorrect tax returns or are negligent in dealing with their tax affairs.  Accordingly, taxpayers should be proactive in seeking advice from tax advisors if the inability to take such action could result in potential penalty to be imposed by IRAS.

As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

Update on Recent Changes to Singapore Goods & Services Tax


Dear Valued Clients and Readers

We are pleased to advise our clients of the latest Singapore tax alert prepared on an update some recent changes to the Singapore Goods & Services Tax.

Recent Changes to GST

If you have any questions or comments on this alert, please contact us at jack.wong@whm-consulting.com.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

New Mergers & Acquisitions Scheme


Dear all

We are pleased to advise our clients of the latest Singapore tax alert prepared on the new Mergers & Acquisitions Scheme.

Tax Alert on new M&A Scheme

If you have any questions or comments on this alert, please contact us at jack.wong@whm-consulting.com.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

Singapore Foreign Tax Credit Pooling System


Dear all

We are pleased to advise our clients of the latest Singapore tax alert prepared on the new Foreign Tax Credit Pooling System.

Tax Alert on FTC Pooling System

If you have any questions or comments on this alert, please contact us at jack.wong@whm-consulting.com.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

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