IRAS adopts a 2-prong approach towards tax compliance by individuals with both risk-based audit and upstream assurance programmes. IRAS leverages on artificial intelligence and data analytics to profile individuals and industries/ businesses for a more targeted intervention.

Compliance programmes

Compliance approach

IRAS believes that taxpayers are generally compliant and that most non-compliance arises from negligence or insufficient understanding in tax matters.

IRAS calibrates our compliance approaches according to the compliance behaviour of taxpayers:

  1. For those who are voluntarily compliant, we provide support and assist them in fulfilling their tax obligations. We encourage taxpayers to come forward voluntarily in a timely manner to disclose filing errors and submission of incorrect returns. By doing so, taxpayers may qualify for penalty reduction under our IRAS Voluntary Disclosure Programme.
  2. For taxpayers who may be negligent in the filing of their tax returns, audits are carried out to detect and correct the errors.  Any errors or incorrect tax reporting uncovered by IRAS may attract a penalty of up to two times the amount of tax undercharged. Serious cases of omission or errors may be subject to court prosecution.  Learn more on What to expect during an audit.
  3. For the small group of errant taxpayers who deliberately evade taxes, we will carry out detailed investigations and take strong actions against them. Learn more on Investigation by IRAS.

Areas of compliance focus

IRAS has calibrated our compliance strategies and approach with the aim of maximising voluntary compliance and are moving our compliance efforts upstream.

Compliance efforts focus on proactive outreach and upstream data collection, as well as assurance audits on data providers (e.g. employers who joined the Auto-Inclusion Scheme for employment income, third party intermediaries who submit income information of commission agents and private-hire car drivers) to ensure the accuracy of data transmitted. We are scaling up integration of tax with taxpayers’ natural systems and processes to obtain timelier and more accurate data to minimise the risk of reporting errors.

Statistics have shown that independent business operators tend to commit mistakes and file incorrect tax returns. Thus, IRAS will also focus its compliance efforts on self-employed individuals who are persons carrying on a trade, business, profession or vocation. This can include doctors, dentists, lawyers, accountants, consultants, commission agents, private tutors, renovation contractors, social media influencers, online sellers, content creators and brick and mortar traditional businesses pivoting their businesses to social media platforms, etc.

Our compliance efforts will primarily be in the following areas:

  1. Timely filing of income tax returns
  2. Under-reporting/ omission of employees’ income in employers’ filing of their employees’ income information
  3. Under reporting of revenue and wrongful claims of purchases/ expenses by cash-based industries
  4. Arrangements that constitute tax avoidance
  5. Reconciliation of income declaration with assets purchased

1. Timely filing of Income Tax Return

More than 96% individuals file their tax returns on time.

Given that the statutory record-keeping period has been reduced from seven to five years, and that filing of tax returns is an annual obligation, it is important that individuals file their tax returns promptly to ensure timely finalisation of their tax matters.

You will be required to submit your Income Tax Return if:

  • you have received an income tax form or a notification via SMS/ letter from IRAS informing you to file your Income Tax Return;
  • your total income in the preceding year is more than $22,000;
  • your net trade income (i.e. gross earning minus allowable business expenses) is more than $6,000; or
  • you are a non-resident who derived income from Singapore.

This is regardless of whether your employer or third-party intermediaries have submitted your income information to us.

If you are on the No Filing Service (NFS), you are not required to file a tax return. However, if you have additional income to declare, or changes to be made to your tax reliefs, you can make the relevant changes by e-Filing your tax return before the filing due date. Alternatively, please inform us within 30 days from the date of the tax bill, if you have any income not shown in your tax bill or if your tax relief claims are incorrect.

Do note that late/ non-filing of tax returns may attract penalties.

2. Under-reporting/ omission of employees’ income in employers’ filing of their employees’ income information

To ensure on time filing for individuals, employers who are under the Auto Inclusion Scheme (AIS) are reminded to transmit their employees’ income details on time to us to avoid inaccurate tax bills and delayed tax assessment due to missing data on pre-filled tax return.  Non-AIS employers have a statutory obligation to prepare the Form IR8A and Appendix 8A, Appendix 8B or Form IR8S (where applicable) for employees who are employed in Singapore.

Common errors made by employers include:

  1. Incorrect reporting on benefits-in-kind, particularly for foreign-owned companies who have sent overseas employees to work in Singapore;
  2. Under reporting of gains from the exercise of stock options and not applying the ‘deemed exercise’ rule for foreign employees who ceased employment in Singapore;
  3. Omission of taxable benefits such as gifts worth more than $200 and staff discounts worth more than $500.

Employers are reminded that submission of inaccurate income information is an offence and may result in a penalty of up to two times the amount of tax undercharged. IRAS encourage employers to voluntarily disclose past errors or omissions in their employees’ tax reporting in a timely manner. By doing so, they may qualify for penalty reduction under our IRAS Voluntary Disclosure Programme.

IRAS adopts tools such as segment profiling and modelling to help in the risk identification and analysis of AIS employers that are more likely to make errors in their employees’ remuneration reporting.  Appropriate early intervention includes upstream assurance programmes targeted at employers’ internal controls and potential risk factors to ensure the accuracy of data transmitted, coupled with downstream audit programmes to deter and prevent occurrence of errors, minimise reporting risks and maximise compliance.

3. Under reporting of revenue and wrongful claims of purchases and expenses by cash-based industries

Generally, we focus our compliance efforts on businesses and professionals who have higher levels of cash or paper transactions and poor record-keeping practices as they pose a higher non-compliance risk. Businesses and professionals with exceedingly high claims of expenses will also be scrutinised.

To aid these businesses and professionals to better comply with their tax obligations, we have put in place a series of compliance programmes ranging from educational and engagement activities to the conduct of audits to review the completeness and accuracy of tax reporting.

4. Arrangements that constitute tax avoidance

IRAS sees a growing trend of high-income individuals seeking to avoid taxes through corporatisation, i.e. by setting up companies to book their personal service income. This is because the Corporate Income Tax rate of 17% is 7% points lower than the top marginal Individual Income Tax rate of 24% from YA 2024, and companies can also benefit from the Start-up Tax Exemption Scheme (“SUTE”) / Partial Tax Exemption Scheme (“PTE”).

A tax avoidance arrangement normally involves an arrangement that is artificial, contrived or has little or no commercial substance. Such an arrangement is typically designed to obtain a tax advantage that is not intended by Parliament.

Some examples of tax avoidance arrangements observed by IRAS include:

  1. Setting-up more than one company for the same business;
  2. Assigning income earned through personal efforts to a shell company; and
  3. Changing the business structure from sole-proprietorship/ partnership to company for the sole purpose of obtaining a tax advantage.

The Comptroller will disregard and make relevant adjustments to arrangements which are carried out with tax avoidance as one of their main purposes and are not for bona fide commercial reasons.

For more information, you may refer to the circular (PDF, 364KB) which provides some case studies to illustrate common business arrangements that may give rise to tax avoidance concerns. It also lays out IRAS' approach in dealing with such business arrangements.

5. Reconciliation of income declaration with assets purchased

IRAS has been issuing query letters to individuals who have purchased high value assets, to check on their source(s) of funds for the acquisition.

The objective of the letter is to create awareness among such individuals to be more mindful of their Individual Income Tax matters, as well as to identify individuals who may not seem to have the income level to support these purchases.

IRAS may also inform such individual taxpayers to review their income declaration to ensure that they have duly declared all income.

Common issues and mistakes

Some of the common issues and mistakes are highlighted here.

Reporting of employment income

No.Common errorsGetting it right
1Failure to report director’s fees which is taxable and/or report in the wrong year.

Director’s fee is taxable as an income in the year you are entitled to the fees. This is usually the date of the company’s Annual General Meeting (AGM) or when the director’s fee is approved by the Board of the company.

Learn more on the Tax treatment of director’s fees

2Failure to report the full value of the awards (e.g. awards given to recognise your work performance, whether in the form of cash or non-cash) even though they are taxable.

Cash awards refer to cash and gifts/shopping vouchers, while non-cash awards include pens, plaques and watches, etc.

Learn more on Tax treatment of awards

Reporting of revenue

No.Common errorsGetting it right
1Failure to report the full amount of revenue. Purchases and expenses were paid directly from the cash revenue, and the net amount was reported as revenue.Takings that are used to pay for your purchases or expenses must be properly recorded and included in your reported revenue.
2Failure to separate deposits made into personal and business bank accounts resulting in a lower amount of business income being reported.Taxpayers should maintain separate bank accounts for business and personal purposes. The business income should be deposited into the business bank account only to facilitate an accurate reporting of business income.

Failure to declare income derived from freelance or part-time work (e.g. fees from private tutoring, online businesses, driving private hire cars, blogging)

Taxpayers should declare such income at the “Sole-Proprietorship/ Self-Employed Income” page under the “Trade, Business, Profession or Vocation” section of the Income Tax Return.

Claiming of non-deductible business expenses

No.Common errorsGetting it right
1Claims of private expenses (e.g. personal club membership subscriptions, personal entertainment and household expenses, personal insurance, personal medical expenses, domestic utility and telephone charges, travelling expenses for personal trips) against the business income.Private expenses are not deductible for income tax purposes.

Claims of motor car expenses (e.g. petrol, insurance, repair and maintenance, parking and CBD charges) in respect of E or S-plate cars.

Note: Learn more about the types of allowable and disallowable business expenses/ deductions if you are a self-employed chauffeured private hire car (PHC) driver.

These expenses are specifically prohibited under the Income Tax Act 1947 and are not deductible even if they were incurred in the course of business.

Keeping proper business records

No.Common errorsGetting it right


Failure to keep proper business records and make declaration based on estimates.

Taxpayers must maintain a full and complete record of income received, including via other modes of payment platforms such as PayLah and PayNow, and expenses incurred for five years.

Income can be recorded in two ways:

  • Key all takings into a cash register and transfer the total takings to a sales book daily; or
  • Issue serially pre-printed numbered invoices/ receipts in duplicates in respect of goods sold and account for all invoices/ receipts issued when preparing the accounts for their businesses.

All claims for expenses should be based on actual amounts incurred and supported with invoices, receipts, payment vouchers or schedules.


Disposal of business records once they have received their tax bill (i.e. Notice of Assessment).

Taxpayers are required to keep sufficient records for five years from the Year of Assessment (YA) from which the income relates so that their income earned and business expenses claimed can be readily determined. 

For example, business records for accounting period 1 January 2023 to 31 December 2023 (YA 2024) must be kept till 31 December 2028. We may request for these documents in the course of audits and disallow the expenses claimed or impose penalty if taxpayers fail to produce proper records.

If your annual revenue is $200,000 or less for the past 2 financial years and your business qualifies for Simplified Record Keeping (PDF, 277KB), you will only need to keep business records (e.g. registers, listings) and not source documents (e.g. receipts, invoices). 

For more information, please refer to Keeping proper records and accounts.

Reporting of other income

No.Common errorsGetting it right
1Failure to report rental income; or only reported rent of the premises and omitted rent of furniture and fittings even though they are taxable.

Rent received from letting of properties is taxable. Gross rent includes the rent of the premises, maintenance and rent of the furniture and fittings.

Learn more on Rental income reporting.

2Failure to declare the rent based on your legal share in the property.The rental income is taxed on all the joint owners based on their legal share in the property. 
3Claim of rental expenses incurred on property not rented out or not generating rent.

Only expenses incurred solely for producing the rental income and during the period of tenancy may be claimed as deduction against the rental income.

Learn more on Allowable and non-allowable rental expenses.

Learn more on Simplified claim for rental expenses.

Playing your part in ensuring everyone pays a fair share of taxes

Obligations of taxpayers

Ensure accuracy of income, deduction and relief reported

To simplify the filing obligations for taxpayers, IRAS will pre-fill the following information for you based on data transmitted.

It is your responsibility to ensure that the income details and relief/ expense claims, including the above pre-filled information, in your tax bill (i.e. Notice of Assessment) are accurate and complete. If the details are inaccurate, please clarify with the relevant organisation directly for any discrepancy and inform them to resubmit the amended information to us if there are any errors.

You are also required to e-File your Income Tax Return and make necessary changes, where possible, between 1 Mar and 18 Apr to avoid penalties for late/ non-filing of Income Tax Return.

Learn more if you are on the No-Filing Service scheme.

Keep proper records
For businesses

Good record keeping is an important part of a business and is the first step towards achieving a complete and accurate income reporting.

To help taxpayers in improving their record keeping practices, IRAS has created a self-assessment toolkit to help businesses perform a self-review of their existing record keeping standards and to better understand the possible areas for improvement.

  • For non-GST registered businesses, please download the toolkit (XLSX, 21KB).
  • For GST-registered businesses, please download the toolkit (XLSX, 23KB)

To simplify record-keeping requirements for small businesses, self-employed persons, sole-proprietorships and partnerships that meet the qualifying conditions under Simplified Record Keeping (PDF, 277KB) are only required to keep business records (e.g. register, listings) and not source documents (e.g. receipts, invoices).

You can enhance and improve your record keeping practices by taking an e-learning course and/or by watching one of IRAS’ YouTube videos on record keeping.

You can also refer to the customised guides for self-employed persons from specific business sectors and trades.

For other individuals

When you make purchases as a consumer, you should request for a written contract, tax invoice or obtain a receipt on payment. This helps to ensure that you have the necessary records and accounts of business transactions to comply with your tax obligations.

As an employee, if your salary is paid in cash, you should ensure that you are issued with a monthly payslip or a yearly Form IR8A and Appendices.

Learn more about Record keeping requirements.

Conduct regular self-reviews

Taxpayers are encouraged to conduct regular self-reviews to ensure that their past declarations are in order.

IRAS has developed a self-review checklist (DOCX, 95KB) to guide taxpayers in identifying potential areas with reporting errors so that they can carry out an effective self-review and voluntarily disclose any errors/ omissions identified.

Voluntarily disclose past mistakes

IRAS believes that the majority of taxpayers are voluntarily compliant. We understand that some taxpayers could have committed tax errors due to their negligence or lack of understanding of their tax obligations.

We encourage taxpayers who have made errors or submitted incorrect returns to come forward voluntarily in a timely manner, to disclose these errors or omissions and get their tax obligations right.

By doing so, they may qualify for penalty reduction under our IRAS Voluntary Disclosure Programme.

Report tax evasion or fraud

We encourage members of the community to report suspected tax evasions or fraud. If you suspect a person or business is engaging in activities or transactions to evade their tax obligations, or you know of someone who is not complying with their tax obligations, you can provide information to IRAS using the Reporting Tax Evasion form or email [email protected]. Your identity and all information provided will be kept confidential.