Tax Audit and Investigation
Written in plain language for general understanding. This is educational content, not legal advice. Based on Singapore Acts of Parliament, subsidiary legislation, and official government guidance.
Singapore National Law
What is this right?
IRAS conducts audits and investigations to ensure tax compliance:
- Desk audit: IRAS may request supporting documents for specific items on your tax return — this is the most common type.
- Field audit: IRAS officers visit your premises to examine records. You will receive advance notice.
- Investigation: For suspected tax evasion — IRAS has powers to search premises, seize documents, and access bank records.
- Penalties for evasion: Fine of up to 400% of the tax undercharged, plus imprisonment of up to 5 years (s96 Income Tax Act).
- Voluntary disclosure: IRAS encourages voluntary disclosure of past errors — penalties are typically reduced for voluntary disclosure (usually 200% vs 400%).
When does it apply?
- IRAS has contacted you regarding a tax audit or investigation.
- You have discovered an error in a past tax return and want to make a voluntary disclosure.
What should you do?
- Cooperate with IRAS — provide requested documents within the stated deadline.
- If you discover an error, make a voluntary disclosure immediately — this significantly reduces penalties.
- Engage a tax professional if the audit is complex or involves significant amounts.
- You have the right to know which items are being audited and to provide explanations.
What should you NOT do?
- Don't destroy or falsify records — this is a criminal offence under the Income Tax Act and the Penal Code.
- Don't ignore IRAS correspondence — failure to comply can result in estimated assessments and prosecution.
- Don't try to hide offshore income — Singapore participates in the Common Reporting Standard (CRS) and exchanges information with tax authorities worldwide.
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