What is Tax Evasion
Tax evasion is when someone has deliberately provided IRAS with inaccurate or incomplete information about their activities to reduce their tax liability or obtain undue tax credits and refunds.
Examples of evasion in Income Tax:
- failing to declare all assessable income
- claiming deductions for expenses that were not incurred or were not legally deductible
- claiming personal relief on fictitious dependents
Examples of evasion in GST:
- claiming input tax on fictitious purchases
- omitting output tax charged on local taxable supplies
- claiming tourist refunds when not entitled to
Signs of Evasion
Some signs that a person or business may be evading income tax:
- keeping two sets of accounts
- providing false invoices to support fictitious expenses
- not wanting to issue a receipt
Some signs that a person or business may be evading GST:
- keeping two sets of accounts
- providing false invoices to support fictitious expenses or purchases
- providing false export documents to support zero-rated supplies of goods
- giving false information on customers and suppliers
- not wanting to issue a receipt or a tax invoice
However, not all people or businesses who show these signs are deliberately evading tax. By telling us what you know, we can investigate the matter to find out truth and take actions against those who have committed tax offences.
If you are aware of someone who has evaded tax in Singapore or have information about tax-related fraudulent activities, you may provide information to IRAS using the reporting template < Reporting Tax Evasion>.
Your information could help to keep Singapore tax system fair
Your identity and all information / documents provided by you will be kept confidential. You may also choose to remain anonymous.
Useful Information You Can Provide Us
We will review the information that you have provided and will initiate investigation if our review indicates that a tax offence has likely been committed. To assist us in our review, please provide the following:
- Particulars of the Tax Evader, Business or Company (Full name, identity number e.g. NRIC No., UEN, ROB, ROC No., address, contact number)；
- Describe the method of the tax evasion and how the activities were conducted;
- Amount evaded and the year(s) involved;
- Supporting information or documentary evidence currently in your possession showing the tax evasion. For example, copies of the records and documents such as ledger accounts, invoices, payment records. For those records that are not in your possession, please describe them and identify their location(s) where possible.
- Explain how and when you became aware of the tax evasion.
What We Do With Your Information
We take every report of tax evasion seriously and will make an independent evaluation of the case using the information provided as well as other information available to us. Where we decide that an investigation is warranted, we will follow up accordingly. Please note that IRAS is bound by strict secrecy provisions. Thus, we will not be able to update you on how we deal with the information provided including; whether we have decided to commence investigation and the status or outcome of the case in the event that we have investigated the case.
IRAS will not handle matters which are not related to tax evasion, e.g. personal or internal disputes among business partners, commercial disputes between private parties.
You may request for a reward in relation to the information and/or documents you have provided. A reward based on 15% of the tax recovered, capped at $100,000, would be given if the information and/or documents you provided lead to a recovery of tax that would otherwise have been lost.
To be considered for a reward, you will need to:
- state clearly that you are requesting for a reward,
- provide your full name, your identity number, contact details at the point when making the tax evasion report and
- provide relevant and specific information with supporting documents or evidence showing tax evasion.
We may request you to come to IRAS subsequently for identity verification. IRAS will ensure that the identities of informer are kept strictly confidential.
To be eligible for the reward, you must not have participated, involved, assisted, abetted or “planned and initiated” the tax evasion/tax fraud or provided false or misleading information to IRAS.
All reward payments are made solely at the discretion of the Commissioner of Inland Revenue, after the investigation has completed and taxes are collected. At that point, IRAS will contact those informer who are to be rewarded. Due to tax secrecy provisions, IRAS will not update you on the status of the case that you have reported on or disclose any follow-up action(s) to you.
Do I have to give my name if I contact you about a tax evasion case?
No. You do not have to give us your name when you give us information. However, providing us your name and a contact number allows us to clarify the information furnished, where necessary. If you wish to request for a reward, you will have to provide your name and contact number at the point of giving us the information and/or documents so that we can contact you to verify your identity.
Will my identity remain confidential?
Your identity and all information/documents provided will be kept strictly confidential.
Under Section 104A of the Income Tax Act and Section 84A of the Goods and Services Tax Act, witnesses during any civil or criminal proceedings will not be required to disclose information that may lead to the discovery of an informer’s identity. If any document (which is in evidence or liable to inspection in any civil or criminal proceedings) contains any entry in which any informer is named or described or which may lead to the discovery of the informer’s identity, the entry will be concealed from view or removed to protect the informer’s identity. If the court after full enquiry into the case believes that the informer wilfully made a material statement which the informer knew or believed to be false or did not believe to be true; or the court is of the opinion that justice cannot be fully done between the parties to the proceedings without the discovery of the informer, the court may permit enquiry and require full disclosure concerning the informer.
Will you let me know what happens to the taxpayer or the status of my tax evasion report?
No, we cannot. As there are strict rules on confidentiality under the tax laws, we will not be able to update you on the status of the case or on our investigations on other taxpayers. We will review all cases reported to us and act upon them accordingly.
Can I receive immunity from prosecution if I provide information about someone evading tax?
If you are merely providing information about someone else evading tax, you will not be prosecuted for tax evasion or for assisting another person to evade tax.
However, we will institute prosecution if we have evidence that you have evaded tax or have assisted another person to evade tax. Taxpayers who come forward and voluntarily disclose past actions involving wilful intent to evade taxes may be accorded the treatment of having their offences compounded at a reduced penalty rate of 200%, instead of being prosecuted. Please refer to IRAS' Voluntary Disclosure Programme ("VDP") for more details. The decision whether to accord VDP treatments to an informant is made solely at the discretion of the Comptroller.