Penalties of up to 4 times the deficient amount payable may be imposed on:

1.   Unstamped documents

2.   Documents with insufficient Stamp Duty amount paid

Stamp Duty audits involve reviewing the accuracy of the information in your document subject to Stamp Duty and the amount of Stamp Duty paid. IRAS adopts a risk-based approach when conducting audits. Being selected for an audit does not necessarily mean that you have made a mistake.

Purposes of Audit

The objectives of IRAS audit tax programme are to:

  1. Identify taxpayers who have made mistakes in their stamping
  2. Educate taxpayers on their tax obligations and how to comply
  3. Identify tax laws, policies and processes where we can simplify or clarify

What to Expect During an Audit

Notification of Audit

We will inform taxpayers of the audit by letter, email or telephone call. IRAS will provide the details such as the timing of audit, and the documents that IRAS will examine.

Examples of Types of Documents Requested by IRAS

For Transfer of Property by Way of Gift

  • Copy of the executed instrument of transfer
  • Copy of valuation report of the property (if any)
  • Transferee's opinion of the market value of the property, as at date of transfer

For Trust Deed / Declaration of Trust

  • Copy of the trust instrument
  • Relationship between the trustee and beneficiary
  • Date on which the property or share(s) was acquired
  • Reason(s) for acquiring the property or share(s) in the name of the trustee
  • Documents to support that the beneficiary is the beneficial owner of the property or share(s), as at the time of acquisition
  • Copy of valuation report of the property (if any)
  • Trustee's opinion of the market value of the property, as at date of instrument

Field Visits by IRAS Officers

Field visit is usually conducted by a team of 3 to 4 tax officers who carry authority cards issued by IRAS. If you need confirmation on the identity of the officer, please call IRAS at +65 6351 2044 or +65 6351 2046. 

 

Responsibilities of Taxpayers

During the audit, we will require your cooperation in the following ways:

  1. Provide us with full access to your premises, records and documents 
  2. Allow us to make copies or obtain extracts of records and documents 
  3. Provide timely, complete and accurate replies to our request for information

Under the Stamp Duties Act, a taxpayer found guilty of false information, misrepresentation, or deliberate omission of information may be fined up to $1,000 and jailed up to 6 months.

 

Conclusion of Audits

1. Communicating and Discussion of the Findings

The outcome of the audit will be communicated either by writing or in person during an arranged meeting at IRAS.

If the audit shows that you have not fully complied with your Stamp Duty obligations, a revised Notice of Assessment will be issued to set out the correct amount of Stamp Duty and penalty or any other charges that may be imposed.

2. Filing an Objection

Taxpayers who disagree with our assessment must object in writing within 30 days from the date of the Notice of Assessment. Please provide supporting documents for your objection. 

Even if you have filed an objection, Stamp Duty, penalty and any other charges must be paid by the specified due date. 

3. Making an Appeal to the High Court

In the event that you are not satisfied with our decision, you may appeal against the decision to the High Court. The appeal must be carried out within 30 days from the date of our written decision. 

The appeal must also be served to us within 30 days from the date of our written decision.

Improving Stamp Duty Compliance

To improve compliance with tax laws, taxpayers are encouraged to:

  1. Set aside money for payment of stamp duty before the document is executed. Do not delay the stamping of your document. Reasons such as "pending funds from disposal of other asset(s)" will not be accepted.
  2. Conduct an online check on the authenticity of the Stamp Certificate if your document is stamped by a third party (e.g. by your lawyer or agent). For more information, please refer to How to verify the authenticity of Stamp Certificate
  3. Have good internal controls. For example, stamping should be done by qualified and responsible staff and preferably not temporary clerks. 

Recent Audit Activities and Results

We may impose penalties of up to 4 times the amount of deficient duties for taxpayers who fail to comply.

Examples

Types of DocumentsCases Considered Non-Compliant for Stamp Duty - For ConveyancePenalties Imposed
Sale and Purchase - Buyer's Stamp DutyCase 1
A purchaser, Mr A failed to stamp his Acceptance to Option to Purchase for a property despite advice from his lawyer.  Stamp Duty payable was $15,405.
A penalty of 2 times the deficient duty was imposed due to non-stamping.
Sale and Purchase - Buyer's Stamp DutyCase 2
A purchaser, Mr B paid the Stamp Duty amount of $77,547 to his lawyer for stamping.His lawyer failed to stamp due to negligence.
A penalty of 2 times the deficient duty was imposed due to non-stamping.
Sale and Purchase - Buyer's Stamp DutyCase 3
A Sale & Purchase Agreement was executed to transfer a residential property to Mr C. Instead of stamping the document based on the market value of the property, which amounts to a Stamp Duty of $189,600, it was insufficiently stamped at $129,600.
A penalty of 50% of the deficient duty was imposed due to under stamping.
Sale and Purchase - Seller's Stamp DutyCase 4
A seller, Mr D failed to pay the Seller's Stamp Duty when he sold his residential property within a year of purchase. He was liable to pay Seller's Stamp Duty at $32,100 based on the selling price of $1,250,000.
A penalty of 2 times the deficient duty was imposed due to non-stamping.
Trust DeedCase 5
A Deed of Declaration was executed to transfer a property by way of gift to Mr D.  Instead of stamping the document at $57,600 as if it was a conveyance on sale, the document was stamped incorrectly at $10.
A penalty of 50% of the deficient duty was imposed due to under stamping.
TransferCase 6
Mr E executed a Transfer document to transfer his property by way of gift to his son.  Instead of stamping the document at $141,600 as if it was a conveyance on sale, the document was stamped incorrectly at $10.
A penalty of 50% of the deficient duty was imposed due to under stamping.
Transfer By AssentCase 7
There was a Will drawn to state the share of the deceased's properties for each beneficiary.
When the Deed of Family Arrangement was executed, the share transferred to one of the beneficiaries was in excess of what was stated in the Will.
In such a case where there is 'excess benefit' being transferred, the Deed should be stamped as if it was a conveyance on sale.
Instead of stamping the document at $224,292, it was stamped incorrectly at $10.
A penalty of 50% of the deficient duty was imposed due to under stamping.

 

Types of DocumentsCases Considered Non-Compliant for Stamp Duty - For Leases Penalties Imposed
Lease / Tenancy AgreementsCase 1
The audit covered some industrial properties in an industrial estate.
28 Lease Agreements were found to be unstamped or insufficiently stamped. A total amount of $79,328 was recovered.  
Stamping should be done:
1. Even for agreements between related parties
2. On the actual and market rental whichever is higher
Penalties of up to 4 times were imposed due to non-stamping and under stamping.
Lease / Tenancy Agreements

Case 2
The audit covered retail units of a shopping centre. 7 Lease Agreements were found to be unstamped or insufficiently stamped. A total amount of $57,519 was recovered.
Stamping should be done:
1. For renewal of leases
2. For variation letters that stated the increase in rent as a result of increase in lettable area
3. By taking into account the percentage rent component (if any)

Penalties of up to 4 times were imposed due to non-stamping and under stamping.
Lease / Tenancy AgreementsCase 3
The audit covered residential units in a few private residential estates.
51 Tenancy Agreements were found not stamped.
A total amount of $10,226 was recovered.
Penalties of up to 4 times were imposed due to non-stamping and under stamping.

 

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