Tax administration

Income tax returns

At the start of each year of assessment, income tax returns are issued to every person who is known to be chargeable to tax. There are different tax returns for each type of taxpayer.

Types of assessments

Original assessment - The initial assessment issued based on the taxpayer's submission or the Comptroller's estimate. Additional assessment - Issued when tax is undercharged, meaning the final tax amount is higher than previously assessed. Amended assessment - Issued when tax is overcharged, meaning the final tax amount is lower than previously assessed. Advance assessment - Issued by the Comptroller in the year the income arises if the income source has ceased or is about to cease. For example, an expatriate leaving employment in Singapore might receive an advance assessment to collect the tax due. It is also issued if the income comes from a trade, business, profession, or vocation. For instance, a company with a financial year ending on 31 March 2021 must submit an estimate of its chargeable income for YA 2022 to the Comptroller by 30 June 2021. This is to comply with the requirements of S63 of the ITA. Upon receiving the estimate, the Comptroller will issue an advance assessment for YA 2022 within 2021.

Appeals

If the taxpayer disputes the assessment, he/she has to submit a notice of objection in writing within 30 days from the date of service of the notice of assessment. The precise grounds of objection to the assessment must be stated. Otherwise the objection is regarded as invalid.

If an objection is made to an assessment that amends a previous assessment in any specific detail (including cases where the amendment affects the amount of unabsorbed losses, allowances, or donations that can be carried forward but the tax payable remains nil), the right to object is limited to the amendment and related matters.

To allow more time for companies to prepare their objections with support information, the Comptroller has extended the objection filing deadline to 2 months from the date of issue of the notice of assessment. This extended objection filing deadline applies to notices of assessment issued on or after 1 January 2014 to all corporate taxpayers (ie. companies, business trusts and real estate investment trusts).

Finality of an assessment

An assessment becomes final and conclusive if no valid objection is lodged within 2 months from the notice of assessment date. However, the Comptroller may accept a late objection if there are reasonable grounds. If a taxpayer made an error or mistake in their tax return or statement, or a taxpayer is exempt from liability to furnish a tax return in the notice of assessment served, they can apply to the Comptroller for relief within 4 years from the end of the year of assessment in which the assessment was made.

Collection of taxes

Tax must be paid within one month from the date the assessment is issued, regardless of any objections. If the tax is not paid by the due date, a 5% penalty is imposed and a demand note will be sent. If the outstanding tax is not paid within 60 days after the 5% penalty is imposed, the Comptroller will impose an additional 1% penalty for each completed month the tax remains unpaid. However, the total additional penalty cannot exceed 12% of the outstanding tax, meaning the maximum total late payment penalties is 17%.

Offences and penalties

Non-compliance with the provisions of the Income Tax Act and no other penalty provided or failure to make income tax return for 2 year or more

Penalty of 200% of the tax that the Comptroller may, to the best of his judgement, assess to be payable by the Company in that year of assessment; and maximum fine of $1,000; in default of payment of the fine, a maximum jail term of 6 months - S94 and 94A.

Submitting incorrect tax return or providing incorrect information

Penalty of 100% of the tax undercharged and/or the amount of Productivity and Innovation Credit (PIC) bonus obtained (as the case may be) - S95(1).

Submitting incorrect tax return or providing incorrect information without reasonable excuse or through negligence

Penalty of 200% of the tax undercharged and/or the amount of Productivity and Innovation Credit (PIC) bonus obtained (as the case may be), abd maximum fine of $5,000 and/or maximum jail term of 3 year - S95(2).

Wilful intent to evade or assist any other person to evade tax

Penalty of 300% of the tax undercharged and/or the amount of Productivity and Innovation Credit (PIC) bonus obtained (as the case may be), abd maximum fine of $10,000 and/or maximum jail term of 3 year - S96.

Serious fradulent tax evasion

Penalty of 400% of the tax undercharged and/or the amount of Productivity and Innovation Credit (PIC) bonus obtained (as the case may be), abd maximum fine of $50,000 and/or maximum jail term of 5 year - S96A.

Keeping of records

Persons carrying on a trade, business, profession or vocation is required to keep records for 5 years from the year of assessment to which any income relates.