Tax Advisory

Mr. Elango Subramanian who was the joint liquidator of the Appellant, faced a tax dispute regarding income from the sale of two properties. While IRAS initially sought taxes on both, it later conceded on the residential property, leaving only the backpacker’s hotel in question.

We supported the Appellant and legal team by providing strategic insights on financial records and business practices. However, due to the promoter’s inability to recall details from the 1980s-90s and the lack of sufficient supporting evidence, the appeal was partially dismissed, resulting in a 50% success in the tax investigation.

In 2020, our client engaged us to object to IRAS’s assessment, which disallowed input tax claims, arguing the activity was merely logistical support for its principal and not part of their trading business. After submitting our position, supporting calculations, and engaging in discussions with IRAS, our objection was successful, and IRAS withdrew its initial disallowance of the input tax.

In 2017, we were engaged to assess IRAS’s disallowance of management fee deductions, which was based on their view that the transactions lacked commercial substance, and the company was structured to secure a lower corporate tax rate.

Recognizing the merit in appealing, we provided extensive support to GSM Law by preparing key documents and financial analyses to counter IRAS’s position. Following rigorous correspondence and analysis, IRAS ultimately concurred with our argument.

Following a surprise IRAS visit in 2017, the client faced inspection over inaccurate records. Due to the limited expertise and guidance, the client prepared accounts in good faith between YA2013 and YA2017 by using incomplete records, thereby resulting in understated annual sales. 

After having detailed investigation, we uncovered underreported income and misclassified business structures or stall operations. IRAS rejected the prior claims that 3 outlets were independently operated by different individuals with close relationships. Instead, IRAS determined that 3 outlets were collectively functioning as a single entity.

We corrected GST registration from September 2017 and collaborated closely with IRAS to revise tax assessments, substantiate historical data, and clarify operations. Through strategic negotiation and documentation, we eventually helped the client to reduce the tax liability, with the successful closure of tax audit for YA2013 to YA2022.

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