SINGAPORE Law and Practice Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
Collectively, these powers ensure robust enforcement of Singapore’s tax laws and promote compliance across all sectors.
Section 96 relates to wilful tax evasion. Under Sec - tion 96, wilful evasion may result in a fine of up to SGD50,000, imprisonment for up to five years, or both. In addition, an offender may be subject to a further penalty of up to 400% of the amount of tax undercharged. For first-time offenders convicted of wilful tax evasion, the maximum penalties remain a fine of SGD50,000, imprisonment for up to five years, or both. For repeat offenders, the penalties increase to a fine of up to SGD100,000 and imprisonment for up to seven years, or both. Where offences involve goods and services tax, separate penalty regimes apply under the GST Act. Furthermore, courts may require offenders to pay an additional penalty equal to three times the amount of tax undercharged, in addition to any other penalties prescribed by law. 6.3 Interaction Between Tax and Criminal Procedures There is no automatic or mandatory referral of all tax fraud cases to the public prosecutor. The IRAS has its own investigation and enforcement division. For serious cases of tax fraud or evasion, the IRAS works closely with the Public Prosecutor’s Office. Co-ordination is ensured through regular com - munication and collaboration between the IRAS and the Attorney-General’s Chambers (AGC), which over - sees the Public Prosecutor. The IRAS will prepare detailed investigation reports and evidence, which are then referred to the AGC for review and a decision on prosecution. If a decision to prosecute is made, the Public Prosecutor will lead the criminal proceedings in court. This ensures that legal standards for criminal prosecution are met and that justice is administered effectively.
6. Penalties and Sanctions 6.1 Tax Penalties
Penalties related to cross-border transactions are stipulated under the ITA, with variations according to the nature and severity of non-compliance. • Late filing or payment penalties are imposed for delayed submission of tax returns or payments. • Negligence penalties apply to errors arising from carelessness, generally ranging from 5% to 200% of the undercharged tax amount. • Penalties for fraud or wilful evasion, involving deliberate attempts to evade taxes, can reach up to 400% of the undercharged tax and may result in criminal prosecution. The Comptroller of Income Tax is tasked with admin - istering and enforcing these penalties. The legal framework for tax offences in Singapore is primarily governed by the ITA, which extends to cross-border transactions. IRAS oversees the implementation of sanctions that range from administrative penalties for minor infractions to substantial financial penalties and imprisonment for serious offences such as tax eva - sion or fraud. Penalties are imposed for various acts, including late filing, incorrect returns, failure to provide information, and wilful evasion. 6.2 Criminal Penalties Criminal penalties for tax fraud and evasion in Sin - gapore are stringent and may include the following. • Fines – significant monetary penalties may be imposed. • Imprisonment – individuals convicted of serious offences may receive custodial sentences. • Combined penalties – courts may impose both fines and imprisonment concurrently. The Income Tax Act outlines specific sanctions. For example, Section 95 addresses the submission of incorrect returns without reasonable excuse, while
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