The substantive elements of tax fraud offences are not statutorily defined in the Singapore tax legislation. For instance, the income tax offence of serious fraudulent tax evasion broadly refers to a person who "makes use of any fraud, art or contrivance or authorises the use of any such fraud, art or contrivance", with wilful intent to evade or to assist any other person to evade tax. The terms "fraud", "art" or "contrivance" are not defined in the statute, and there is limited Singapore case law guidance on the same.
From a common law perspective, the Singapore courts would generally consider the plain meaning of these words and relevant case authorities (that may not be in the context of tax offences) when interpreting these terms – e.g., "fraud" may entail the use of false representations and criminal deception of the tax authorities, etc.
No. As a matter of law, the Singapore tax legislation does not provide for criminal proceedings for tax fraud to be triggered based on the amount of tax adjustment made. However, whether the Public Prosecutor initiates criminal proceedings for tax fraud can depend on a number of factors (e.g., whether the elements of the offence has been made out, strength of evidence available, etc), of which the amount of tax involved could be one.
No. Similar to our response to Question 2, as a matter of law, the Singapore tax legislation does not provide for criminal proceedings for tax fraud to be triggered based on the amount of tax penalties imposed.
Mere negligence is sufficient to form the basis of a criminal offence under the Singapore tax legislation. For example, a person who makes an incorrect return through negligence by omitting or understating any income of which that person is required to make a return could be guilty of an offence under Section 95(2) of the ITA. Note that the Comptroller may make the company and/or individual an offer for such offences to be compounded in lieu of prosecution.
IRAS administers the Voluntary Disclosure Programme ("VDP") to encourage companies that have made errors in their tax returns to come forward voluntarily, in a timely manner, to correct their errors. Generally, a company that makes a voluntary disclosure that meets the relevant VDP conditions may qualify for reduced penalties or no penalties and should not face criminal proceedings.
To elaborate, a company that makes a qualifying disclosure of errors made due to negligence, etc., would only face civil implications (e.g., civil penalties), although such errors could potentially amount to a criminal offence. In the case of errors that were committed with a wilful intent to evade taxes, such companies may have their offences compounded at reduced penalties, in lieu of prosecution / criminal proceedings. Note that the VDP requires strict conditions to be met, and companies that commit such errors but do not qualify for the VDP treatment may be subject to criminal consequences.
The Public Prosecutor has control and direction of all criminal prosecution and proceedings in Singapore, which includes the prosecution of tax fraud offences.
In practice, the prosecution of tax fraud offences (and most other offences in the Singapore tax legislation and regulations) are generally initiated and conducted by officers of the Inland Revenue Authority of Singapore ("IRAS"), which is the statutory body responsible for the administration of taxes in Singapore.
There is no limitation period for tax offences in Singapore.
As mentioned above, there is no limitation period for tax offences in Singapore.
However, for civil tax adjustments, the limitation period for income tax adjustments is four years from the end of the relevant year of assessment in which the adjustment is to be made. In the case of GST, the limitation period is five years after the end of the prescribed accounting period in which the adjustment is to be made. There is generally no limitation period in the case of stamp duty matters.
The offence of serious fraudulent tax evasion under the Singapore Income Tax Act 1947 ("ITA") attracts a fine up to SGD 50,000 or imprisonment for a term up to five years or both, other than tax penalties.
The offence of fraud under the Singapore Goods and Services Tax ("GST") Act 1993 (i.e., making use of any fraud, art or contrivance whatsoever or authorises the use of any such fraud, art or contrivance, wilfully with intent to evade or to assist any other person to evade tax) attracts a fine up to SGD 10,000 or imprisonment for a term up to seven years or both, other than tax penalties.
The offences of fraud under the Singapore Stamp Duties Act 1929 may attract a fine up to SGD 10,000 or to imprisonment for a term up to three years or to both.
Depending on the nature and extent of the tax offences committed, the Public Prosecutor may consider there to be mitigating factors where the company in question has put a compliance or risk mitigation programme to safeguard against the commission of such offences. In the exercise of its prosecutorial discretion, the Public Prosecutor may decide against prosecuting the company and issue the company with a stern warning instead of pursuing criminal charges instead, or prefer criminal charges only against the errant individuals concerned.
Yes, the IRAS administers the Voluntary Disclosure Programme (“VDP”) in Singapore. The VDP applies to income tax (including withholding tax), GST, and stamp duty.
Broadly, to qualify for the VDP, the company must submit a self-initiated voluntary disclosure that is timely, accurate and complete. A voluntary disclosure is considered timely and self-initiated if the voluntary disclosure is made before the company receives a notification from IRAS on the commencement of an audit or investigation on its tax matters. After submitting a voluntary disclosure, the taxpayer must cooperate fully with IRAS to correct the errors made and pay or make arrangements with IRAS to pay additional taxes and penalties imposed (if any), and honor such arrangements until all payments are made. The penalties that a company making a qualifying disclosure under the VDP will be subject to depends on several factors (e.g., the length of time since the statutory filing deadline, type of tax involved, nature of the error, etc.).
No, there is no such exemption provided under Singapore law.
The limitation periods for income tax and GST adjustments do not apply where the Comptroller is of the opinion that any form of fraud or wilful default has been committed by or on behalf of any person in connection with or in relation to tax. IRAS may make tax adjustments outside the limitation period in such cases, even if no prosecution has commenced. There is otherwise no general rule that prosecuting a tax offence would impact the applicable limitation period.
Yes. In criminal cases, where a taxpayer has been convicted of the offence charged, apart from the additional criminal fines and penalties that may have been levied, the Singapore tax authorities are also empowered to collect the tax amounts in question from the taxpayer through the statutory enforcement powers.
For criminal matters, it may be possible to enter into a plea bargain with the Public Prosecutor to agree on reduced charges (e.g., less serious charges or reduced number of charges) in certain circumstances.
Both individuals and companies can be prosecuted for tax offences. The decision whether to prosecute a company and / or certain individuals in the company (or both) is made at the discretion of the Public Prosecutor.
Yes, foreign employees and directors can be prosecuted for tax offences committed in Singapore. Foreign employees and directors may also be prosecuted for specific tax offences committed outside Singapore in certain circumstances.
Generally, criminal fines and penalties imposed on an individual will be personal to that individual. However, it remains open to that individual to bring a claim against the company for compensation as a civil matter.
We have observed the Singapore tax authorities investing enforcement and prosecution resources towards income tax and GST evasion offences, and seeking stricter penalties for convicted taxpayers. There is a particular focus on GST missing trader fraud / carousel fraud offences, and tax offences related to more complex white collar crimes (e.g., money laundering and cheating).