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Tax Investigation & Audit Services
Our team of experienced professionals can help ensure that your company continues to function effectively even during an investigation or audit. Issues in their infancy stage are the easiest to handle and solve. We are confident in helping you resolve your problems to avoid a more serious IRAS investigation issue.
These services extend to Singapore incorporated companies, foreign companies establishing a branch or a representative office in Singapore and offshore companies. Our services include:
IRAS Tax Audit
IRAS Audit Assistance
Client Representation to IRAS
What Is A Tax Investigation?
Unlike a desk or field audit by the IRAS where prior notice is given to the taxpayer, tariff investigation comes as a surprise visit to the taxpayer’s office. In most cases, surprise ‘raids’ might even occur simultaneously across multiple offices.
During a tariff investigation, the IRAS investigators/officers are tasked to gather all relevant documents. This may include digital copies of documents, giving them the right and authority to confiscate all electronic devices.
After the raid, IRAS investigators will interview all parties involved and record their given statements. These are legal proceedings that can be used as evidence in court.
A taxpayer who is found to have wrongfully reported their income or expenses can either be charged in court or settled out-of-court. Either way, the punishment for the guilty is harsh and unforgiving.
What Happens In A Tax Investigation in Singapore?
It is natural for anyone to be worried when your office or home is raided by IRAS. Regardless of what happens, you should provide your cooperation to the IRAS staff. Do not cause inconvenience or obstruct them from performing their duties as it is a chargeable offence under Singapore law.
Cooperate and answer all questions during the investigation. If you are unsure or unable to remember any details, it is in your right to confirm with them at a later date. This is a crucial point to take note of as any inconsistency in your statement may paint you in a different light.
After being investigated by IRAS, it is critical that you appoint a professional who is experienced in handling such cases.
They can be extremely long and complex. You will require the right support to effectively mitigate any consequences of non-compliance tariff. You should not risk engaging an inexperienced agent and jeopardizing your chances of resolving your case out-of-court.
We Are A Singapore Chartered Tax Professional (SCTP)
Commonly referred to as Singapore Chartered Tax Professionals (SCTP), tariff accountants determine the strategies required to defer and minimise tariff payments. In the best-case scenarios, payments will be eliminated.
Accountants can also assist clients with audits conducted by authorities. We can also help you with IRAS tariff investigation or tax advisory work as well. After preparing documents, accountants file the relevant tariff returns on behalf of their clients and prepare the reports to reflect the work done.
Contact us for any tariff return queries.
What happens In An IRAS Tax Audit?
What is a tariff audit? Audits check the accuracy of the information on your tariff return. They are carried out in a risk-based manner, randomly selected by the IRAS based on each industry and company’s risk profile. Getting selected for an inspection does not always mean that your company is in trouble.
Emails, letters, and phone interviews can all be used to perform an inspection. The IRAS officers may also pay you a visit or request to speak with your key personnel and/or employees for further investigation of documentation and paperwork. For field visits, the officer who comes to your place of business will have an IRAS-issued authority pass.
Here are some of the examples of the information requires during an IRAS Audit:
Information about your company (e.g. information on business arrangements, running of a business);
Sales and purchasing records to ensure the values presented in your GST returns are correct;
Supporting documents for your business activities (e.g. export documents, invoices); and
Checklists for self-evaluation that have been completed (e.g. bad debt relief, self-review form for pre-registration input tariff claims).
Confirmation from your customers, suppliers and/or banks that the transactions stated in your GST filings are legitimate.
Demonstrate your transaction recording method in the computer system.
Lists of sales and purchases to back up the statistics on your GST returns.
As the document preparation process for an inspection is often tedious, we recommend companies who are overwhelmed with operating tasks and workload to engage us for our IRAS audit services. Our team of professionals will help your company and employees prepare for an IRAS audit. We will assist you in collating a comprehensive and completed set of required information and documents.
Most audits are completed around 12 months. However, with the support of our team in reducing response time and documentation submission delays, we look forward to helping you complete the investigation quickly so that your company can resume focusing on your day-to-day operations.
Feel free to check out our GST filing and GST audit services.
Why You Should Not Worry About a Tax Audit
1. Your Chances of An Audit are Extremely Rare
A tariff audit is performed randomly by the IRAS.
It can be randomly performed on companies. Audits are performed randomly and on a case-by-case basis to ensure that there is proper coverage of companies across all industries. To achieve this, IRAS uses a database of tools and analytics to profile companies based on their compliance risk.
The IRAS is also less likely to audit companies that are free from filing mistakes, meaning that punctual and meticulous companies have nothing to worry about.
2. A Tax Audit Doesn’t Automatically Mean You’re In Trouble
Some audits are not what you might expect at all. The IRAS may simply want additional documentation or a response about a particular item. It may be a legal procedure or a random decision.
Reply and cooperate with your tariff audit offer as much as possible, as soon as possible, making sure to not cause any unnecessary trouble, and you will be fine.
3. You Can Hire a Professional To Help You With Your Tax Problems
Besides facing your offences, filings, or any form of investigation on your own, you have the right to be represented by a tax advisory or tax investigation advisor in Singapore.
If the IRAS requests for an office or field audit, you can still gather your information and represent yourself if you feel comfortable doing so. However, with an experienced professional to help, it might put your mind at ease. You can take advantage of the years of experience a professional might have.
With someone experienced and familiar with the system, you will also be less likely to make any filing errors or documentation mishaps.
Professional Tax Audit Services in Singapore
Our main responsibility is to assist your company in establishing the best practices and internal controls around the company. We aim to promote efficient operations to improve the performance and profit of the company.
We help companies prepare and organise accounts for submission. With years of experience, we are able to look for aspects of the company that may have led the company to pay more tariffs than required.
Our team is well-trained in accounting and tax advisory work. Our tax-audit services may include:
Accounts Reconstruction
Our team will help you sort out correct company records and look for mistakes in your documentation. This includes identifying and improving records that do not have supportive documentation or false data.
If you are worried about your company’s ‘Tax Health’, we also conduct a tariff review of your company, to get ahead of any wrong filing procedures or practices.
Contact us for more information.
Tax Mitigation
Our team can offer your business specialised tariff services and advice, regardless of your company’s size, industry or phase of development.
We believe in building a long-lasting relationship based on understanding your company’s working and unique needs. Hence, we look forward to collaborating with you to provide you with a specific solution.
Our team of professionals can provide you with the relevant advice you need to make sure your business is fully tax-compliant and help to plan for any potential risks in the future.
Client Representation to IRAS
As experienced tariff investigation advisors, we are well-equipped with the knowledge to file for any tax-related matters.
Hence, we are in an effective position to help represent our clients for documentation submission or discussions with IRAS personnel.
IRAS Audit Assistance
IRAS tariff audits can be emotionally and financially stressful for the company as it places the company in a state of limbo, full of unknowns.
It also affects the morale of the staff and shareholders.
We aim to help in every way we can.
How Much Does A Tax Audit Cost in Singapore?
At Morrison, we bill our customers on an hourly basis. This is because it is very difficult and tedious to estimate the amount of time needed for an audit.
There are a number of factors that can affect how long an inspection will take to be completed, due to the many documentation involved.
However, at Morrison, we believe in customers paying for what they want and need. With a wide variety of packages available, we are confident that customers can find the package that simultaneously meets their budget and needs.
Frequently Asked Questions (FAQs) on Tax Investigation & Audit
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There are many similarities between auditing and investigation. However, the intention of each process varies.
Tax investigations are more focused on finding a significant fraud or error in an attempt to avoid tax evasion. IRAS tariff investigation is usually carried out on a company that is suspected, with potential red flags, of tax evasion. Tariff investigations have the goal of gathering evidence in an attempt for prosecution. In order to preserve the integrity of the documentary evidence for the prosecution, a surprise visit is sometimes necessary for tariff investigation cases.
Tax audits, on the other hand, are more about determining the accuracy of a company’s income tariff returns. The audit process is usually viewed as less complicated than a typical tax investigation.
IRAS Tax audit inspects tariff filing with the aim to rectify existing errors and correct inaccurate filing procedures or methods. IRAS audits can come in the form of query letters to ask taxpayers to submit necessary documents.
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A tax investigation may be triggered for many reasons and if you wish to start your own business in Singapore, you might want to know these beforehand.
The company might have filed their tariff wrongly, having made errors that need correcting, or they might have filed their tariff late. Inconsistencies or variations between returns could lead to a large fall in income numbers or an increase in costs. This paint a very different picture from the actual financial health and situation of the company.
An investigation is crucial to ensure that companies do not escape the eyes of the law for tax evasion purposes.
Many corporate secretarial firms offer investigation-related services to help companies through the ordeal.
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Tax evasions have been commonly and historically served as the principal revenue offence. The willful attempt to evade or defeat tariff assessments or payments is a federal crime across many states and countries.
Under the Income Tax Act, taxpayers or companies may face the following consequences, depending on the circumstantial evidence which indicates the intention of evading tariff:
Companies or taxpayers might face a penalty of up to 200% of the tariff undercharged, a fine of up to $5,000, and/or up to three years in prison if there is no evidence that they intended to evade tax.
In serious cases where there is an intention to evade tax, a penalty of up to 400% of the tariff undercharged, as well as a fine of $50,000, will be imposed. The jail term will also be extended up to 5 years.
If a taxpayer or company in Singapore fails to file the income tariff returns by the deadline, they will face a penalty fine. As of the year of assessment 2021, all businesses must e-file their corporate income tariff returns by November 30, 2021.
IRAS may lessen fines for voluntary disclosures under its Voluntary Disclosure Programme in order to promote voluntary disclosures of past errors and omissions. Taxpayers or firms can make a voluntary disclosure online.
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In Singapore, it is required to go through multiple forms of audit, in addition to audits regardless if they are sole proprietorship or pte ltd companies. One common form of audit is known as the statutory audit, a check to examine the accuracy of the financial records and assets of a company.
Previously, a company is exempted from the auditing process if it has an annual revenue of S$5 million or less. However, the Companies Act was amended in 2014.
This amendment updated the criteria for a company’s audit exemption. In the updated Companies Act, the concept of a “small company was introduced to better define and determine a company’s eligibility for statutory audit.
According to Singapore’s ACRA website, a company qualifies as a small company if it has at least 2 of the following criterion to be considered a “small company”:
Total annual revenue of not more than S$10 million.
Total gross assets at the end of the financial reporting period of not more than S$10 million.
The total number of employees at the end of the financial year of not more than 50.
Companies that are part of a small group of companies can also qualify if it meets at least two of the following conditions:
The total turnover shall not exceed S$10 million.
At the end of the financial reporting period, the entire balance sheet shall not exceed S$10 million.
The total average number of employees shall not exceed 50 at the end of the financial reporting period
Additionally, group companies (holding and subsidiary companies) can also apply for the audit exemption if they qualify for the criteria.
Companies who are unaware of their eligibility can always consult an advisory firm or hire an accountant to help with the book-keeping services or calculations.
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Both tax audits and statutory audits are different in many ways. They both serve different purposes and occur under different situations.
Unless otherwise exempted, statutory audits are mandatory, with the focus being placed on checking the company’s financial assets and paperwork records.
Tax audits, on the other hand, are conducted on a random basis (in Singapore). The focus on tariff audits are
To ensure that your company's tariff returns are compliant with the law;
Educate your company on its tariff requirements and how to meet them; and
Determine which laws, regulations, and procedures can be simplified or clarified.
Sources: IRAS Tax Audit and ACRA Statutory Audit
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Many countries have experienced significant budget deficits as a result of the COVID-19-induced recession. Singapore is no different, having dedicated almost S$100 billion to cushion the economic impact arising from COVID-19 in 2020.
With a projected overall budget deficit of close to S$76 billion in the near future, it is likely that local authorities will keep a closer eye on the tariff landscape of Singapore to focus more on tax governance. Due to the important yet excessive COVID-19 spending, this may be considered a strategy to address tax leakages in order to increase revenue.
With more stringent tariff governance expected, it may be a good idea to hire a tax advisor to guide you and keep you updated on any potential changes in tariff filings, laws, and deadlines.
At Morrison Management, we provide a wide variety of services, ranging from providing Singapore company incorporation, corporate secretarial services, accounting, GST filing, or GST audit services for many firms across the world and locally in Singapore.
Audits can be especially scary for start-up business owners in Singapore due to the thought of owing more tariffs on a limited budget or being held liable without the support of a competent accounting department. Hence, it is crucial to have an advisory partner firm to guide you through and reassure you every step of the way, such as litigation support. We at Morrison Management strive to do that for you.