Tax Governance Framework (“TGF”)

TGF is a voluntary compliance initiative that a company may participate in to demonstrate that it has good tax governance and tax risks management. Adopting the framework helps companies attain and maintain good standards of tax governance and raises tax governance to attention at the Board level. The framework features a set of broad principles and key practices which a company should incorporate in its tax governance policy for effective management of tax risks. In the long run, a company’s commitment to the TGF supports a collaborative and trusting relationship between the company and IRAS, leading to lower compliance costs.

Businesses Suited for TGF

Any company can commit to the TGF. In particular, the TGF is suited for companies that:

  • Have complex structures and business models;
  • Recognise the importance of tax accountability and transparency; and
  • Are willing to commit to good tax governance practices to manage the ongoing performance and tax affairs of the company. 

Building Blocks of TGF

The TGF sets out the principles and key practices centred around 3 essential building blocks of good tax governance. It is applicable to both Corporate Income Tax and GST. 

Building BlockPrinciple and Key Practices

1. Compliance with Tax Laws

The Company is committed to comply with the relevant tax laws, regulations and requirements and respects the intent of the laws and regulations.

Key practices include:

  • Aligning the company’s policies, procedures and activities with relevant tax laws and regulations
  • Undertaking activities driven by bona-fide commercial reasons

2. Governance Structure for Managing Tax Risks

The Board is apprised of the company’s governance structure and policy for managing tax risks.

Key practices include:

  • Formalising a governance structure for tax risk management
  • Documenting a tax governance policy which sets out the company’s view on taxation and reflects the company’s attitude and culture towards managing its tax risks
  • Apprising the Board of the tax governance policy and key tax risks
  • Maintaining a system of controls and processes, as well as people with the skills and knowledge, to make accurate and complete tax returns

3. Relationship with Tax Authorities

The Company supports a collaborative and transparent relationship with tax authorities based on mutual trust and respect.

Key practices include:

  • Engaging proactively with IRAS to resolve issues that pose tax uncertainty
  • Voluntarily disclosing and rectifying tax errors in a timely manner
  • Providing accurate and full disclosure of relevant facts when responding to tax queries from IRAS

For the full list of key practices, please refer to the Declaration Form for Tax Governance Framework (“TGF Declaration Form”)

Applying for TGF Status

You can apply for TGF status in the name of your company (i.e. single company) or on behalf of a group of companies (i.e. a GST Group or a corporate group) by performing the following:

  1. Publish your company’s tax governance policy on your corporate website or an annual report which is publicly accessible. The tax governance policy should include details of how your company manages tax risks under the 3 building blocks of TGF. 
  2. Complete the Declaration Form for Tax Governance Framework  to confirm that your company has adhered to the guiding principles and key practices outlined in the TGF. The form should be signed off by the Chief Executive Officer or Chief Financial Officer.
  3. Submit the TGF Application Form via FormSG:
    1. If your application consists of any GST-registered business, please submit your application here.
    2. If your application does not include any GST registered business, please submit your application here

You may refer to Tax Governance Policy Publication  for an example that meets IRAS’ TGF requirements.


Your application for TGF status is subject to IRAS’ approval. IRAS will evaluate your application based on various factors, such as your company's past compliance records, and may request for additional information and/or documents in the course of reviewing your application. 

If you are a GST group registrant

You will have to apply for TGF and complete the TGF Declaration Form and TGF Application Form as a GST group. All local members (i.e. companies incorporated in Singapore) of the GST group must participate in TGF. 

If you are a GST divisional registrant

You will need to apply for TGF and complete the TGF Declaration Form and TGF Application Form as a company. All divisions of the company must participate in TGF.

If you belong to a corporate group

Your corporate group may comprise GST-registered or non-GST registered companies only, or both. You can choose to apply for TGF and complete the TGF Declaration Form and TGF Application Form as a corporate group if all member companies within your TGF application adopt the same tax governance policy. Alternatively, you can also choose to apply for TGF for each company in the group individually as and when they are ready. 

Approval of the TGF application will be granted to qualifying member companies on an entity basis, regardless of whether the application is submitted as a corporate group or on individual basis.

Benefits of Adopting TGF 

You will enjoy the following benefits when you adopt the TGF:

Corporate Income Tax

A one-time extended grace period of 2 years for voluntary disclosure of Corporate Income Tax errors# made within 2 years from the date of our approval of your TGF application.


Withholding Tax

A one-time extended grace period of 2 years for voluntary disclosure of Withholding Tax errors# made within 2 years from the date of our approval of your TGF application.

 

GST

  1. For a GST-registered business accorded with ACAP (Assisted Compliance Assurance Programme) status, a one-time extended grace period of 3 years for voluntary disclosure of GST errors# made within 2 years from the date of our approval of your TGF application. The voluntary disclosure of errors can be made under Post ACAP Review (PAR), ACAP Renewal or your own GST review; or
  2. For a GST-registered business without ACAP status, a one-time extended grace period of 2 years for voluntary disclosure of GST errors# made within 2 years from the date of our approval of your TGF application. 

#Disclosure of errors which meet the qualifying conditions for reduced penalties. See e-Tax Guide on IRAS’ Voluntary Disclosure Programme. Errors do not include fraudulent errors and errors discovered under IRAS’ audit or investigation.

Examples of how the extended grace period is applied

Corporate Income Tax

A company submits its TGF application on 1 Mar 2022 and this is approved by IRAS on 30 Apr 2022. The company will enjoy a one-time extended grace period of 2 years for voluntary disclosure of corporate tax errors between 30 Apr 2022 to 29 Apr 2024. On 31 May 2022, the company makes a voluntary disclosure of corporate income tax errors for the Year of Assessment 2020. 

In the absence of the TGF benefit, these errors will attract a penalty as they are disclosed after the 1-year grace period (from 1 Dec 2020 to 30 Nov 2021). However, as the company is entitled to the TGF benefits and the errors fall within the extended grace period of 2 years (from 1 Dec 2020 to 30 Nov 2022), the errors will not attract a penalty. 

Withholding Tax

A company submits its TGF application on 1 Mar 2022 and this is approved by IRAS on 30 Apr 2022. The company will enjoy a one-time extended grace period of 2 years for voluntary disclosure of withholding tax errors between 30 Apr 2022 to 29 Apr 2024.

If the company makes a payment to a non-resident on 1 Jan 2021, it will need to file and pay withholding tax to IRAS by 15 Mar 2021. On 31 May 2022, the company makes a voluntary disclosure of a withholding tax error in relation to this payment to a non-resident. 

In the absence of the TGF benefit, this error will attract a penalty as it is disclosed after the 1-year grace period from the statutory filing deadline (from 15 Mar 2021 to 15 Mar 2022). However, as the company is entitled to the TGF benefits and the error is disclosed within the extended grace period of 2 years from the statutory filing deadline (from 15 Mar 2021 to 15 Mar 2023), the error will not attract a penalty.

GST

A GST-registered company (not under group or divisional registration) submits its TGF application on 1 Mar 2022 and this is approved by IRAS on 30 Apr 2022. On 30 Apr 2023, the company makes a voluntary disclosure of GST errors for the period from 1 Jan 2019 to 31 Dec 2022. 

The TGF benefit applies as the GST errors are disclosed within 2 years from the date of our approval of the TGF application, i.e. 30 Apr 2022.

ScenarioApplying TGF benefitWithout TGF benefit

ACAP renewal

Review year selected for ACAP renewal is from 1 Apr 2021 to 31 Mar 2022.

The GST errors made in the accounting periods from 1 Jan 2020 to 31 Dec 2022 fall within the one-time extended grace period of 3 years and will not attract penalty.

The GST errors made in the accounting periods from 1 Jan 2020 to 31 Mar 2021 would have attracted penalty.

Post ACAP review

 

 

The GST errors made in the accounting periods from 1 Jan 2020 to 31 Dec 2022 fall within the one-time extended grace period of 3 years and will not attract penalty.The GST errors made in the accounting periods from 1 Jan 2020 to 31 Dec 2021 would have attracted penalty.

GST review

 

 

The GST errors made in the accounting periods from 1 Jan 2021 to 31 Dec 2022 fall within the one-time extended grace period of 2 years and will not attract penalty.The GST errors made in the accounting periods from 1 Jan 2021 to 31 Dec 2021 would have attracted penalty.

If you are under GST group registration: The one-time extended grace period will apply to GST errors made by the participating members in the voluntary disclosure submitted by the GST group.

If you are under GST divisional registration: The one-time extended grace period will apply to GST errors made by the divisions in the voluntary disclosure submitted by the company. The divisions are required to submit the voluntary disclosure for all divisions at the same time (i.e. one-time use of TGF benefit). 

Utilising the benefits under TGF

For utilisation of the benefits under TGF for your voluntary disclosure of errors, please complete the “Form to utilise benefits granted under TGF ” and submit it together with your voluntary disclosure. 

FAQs

I belong to a local corporate group where my parent company has published a group tax governance policy. Do I still have to publish my own tax governance policy to apply for TGF?

Companies of a corporate group are generally expected to adhere to the same tax governance principles set by the parent company, as these should be cascaded down and applied consistently across the group. 

When you apply for TGF, you can rely on the group tax governance policy that is published by your parent company if the group tax governance policy applies to you. 

I am part of a foreign multinational corporation and hence I have to adhere to the global tax governance policy that is published by my foreign parent company on the global corporate website. I am unable to publish my own local tax governance policy. Can I still apply for TGF?

You can apply for TGF if the global tax governance policy is in line with the direction of TGF and you have put in place a tax governance structure that adheres to the TGF. 

In lieu of publishing your own tax governance policy, you should specify on your website that you adhere to the global tax governance policy and provide the source. As part of your application, you should provide details on your tax governance structure and practices as these may not be reflected in the global tax governance policy. 

Do I have to renew my TGF Declaration Form?

No. The TGF Declaration Form is valid for as long as the tax governance policy remains published on your website or annual report adheres to the 3 building blocks of TGF and the tax governance practices are still in place. 

IRAS may request for confirmation on your tax governance structure periodically to ensure that you are still adhering to the TGF.

Do I have to inform IRAS of any changes in my tax governance policy?

There is no need to inform IRAS if your tax governance policy continues to adhere to the 3 building blocks of TGF. However, IRAS may request for confirmation on your tax governance structure periodically to ensure that you are still adhering to the TGF.

If your tax governance policy no longer adheres to the 3 building blocks of TGF, or if you no longer meet the requirements of the TGF, you should inform IRAS in writing. 

Can I subsequently withdraw from TGF?

A request to withdraw from TGF should be made in writing. 

The adoption of TGF demonstrates your willingness and commitment to establish good tax governance standards in your company. 

We will assess your reasons for withdrawal from the programme and take this into account in your risk profile with IRAS.