IRAS | Voluntary Disclosure of Errors for Reduced Penalties

IRAS understands that some taxpayers may occasionally make errors in their tax returns due to lack of care or awareness of their tax obligations. The IRAS Voluntary Disclosure Programme (VDP) encourages taxpayers who have made errors in their tax returns to come forward voluntarily, in a timely manner, to correct their errors. IRAS is prepared to reduce penalties for voluntary disclosures which meet the qualifying conditions.

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Qualifying conditions

The IRAS VDP applies to Income Tax (including cash payouts / bonus), GST, Withholding Tax and Stamp Duty. To qualify for IRAS VDP, you need to submit a voluntary disclosure that is:

Accurate and complete; and
Timely and self-initiated.

A voluntary disclosure is considered timely and self-initiated under either one of the following conditions:

before you receive a query from IRAS relating to your tax or cash payout / bonus matters; or
before you receive notification from IRAS on the commencement of an audit or investigation on your tax or cash payout / bonus matters.

After submitting a voluntary disclosure, you must also:

Cooperate fully with IRAS to correct the errors made; and
Pay or make arrangements with IRAS to pay additional taxes or amount exceeding cash payout / bonus than entitled to and penalties imposed (if any), and honour such arrangements till all payments are made.

For examples on qualifying and non-qualifying Voluntary Disclosures, please refer to Annex A and Annex B respectively of the e-Tax Guide on IRAS' Voluntary Disclosure Programme (PDF, 529KB).

Reduced penalties

Disclose errors within grace period to avoid penalties

Voluntary Disclosure made	Penalty Treatment
Within the 1 year grace period from the statutory filing deadline, and the qualifying conditions are met	No penalty imposed
After the 1 year grace period from the statutory filing deadline and qualifying conditions are met	Reduced penalty of: 5% of the income tax undercharged or of the amount of cash payout/bonus exceeding entitlement obtained, for each year (after the grace period) the error was late in being rectified (refer to Examples 1 and 2 below for the computation of reduced penalty on errors voluntarily disclosed for Corporate Income Tax and Individual Income Tax). Flat 5% of the GST undercharged Flat 5% of the outstanding Withholding Tax
For late stamping or underpayment of Stamp Duty and the qualifying conditions are met	Reduced penalty of: 5% per annum computed on a daily basis on the Stamp Duty payable No grace period for Stamp Duty

Voluntary Disclosure made

Penalty Treatment

Within the 1 year grace period from the statutory filing deadline, and the qualifying conditions are met

No penalty imposed

After the 1 year grace period from the statutory filing deadline and qualifying conditions are met

Reduced penalty of:

5% of the income tax undercharged or of the amount of cash payout/bonus exceeding entitlement obtained, for each year (after the grace period) the error was late in being rectified (refer to Examples 1 and 2 below for the computation of reduced penalty on errors voluntarily disclosed for Corporate Income Tax and Individual Income Tax).
Flat 5% of the GST undercharged
Flat 5% of the outstanding Withholding Tax

For late stamping or underpayment of Stamp Duty and the qualifying conditions are met

Reduced penalty of:

5% per annum computed on a daily basis on the Stamp Duty payable

No grace period for Stamp Duty

Example 1: Computation of reduced penalty on errors voluntarily disclosed by a company in its Corporate Income Tax Return within and after the grace period

Company A discovered an error in its YA 2022 Corporate Income Tax Return, after the statutory filing due date on 30 Nov 2022. The tax undercharged was $1,000. Company A voluntarily disclosed its errors and met all the qualifying conditions under the VDP.

The table below shows the reduced penalty amount (if applicable) depending on when Company A voluntarily disclosed its errors:

Date of voluntary disclosure of errors	Date of disclosure is within the 1 year grace period (i.e. anytime between 1 Dec 2022 and 30 Nov 2023)	Date of disclosure is 1 year after the grace period (i.e. anytime between 1 Dec 2023 and 30 Nov 2024)	Date of disclosure is 3 years after the grace period (i.e. anytime between 1 Dec 2025 and 30 Nov 2026)
Amount of reduced penalties imposed (if any)	No penalty will be imposed.	A reduced penalty of $50 (5% X $1,000) will be imposed.	A reduced penalty of $150 (5% X $1,000 X 3 years) will be imposed.
Explanation	Company A voluntarily disclosed its errors within the 1-year grace period from the statutory filing deadline of 30 Nov 2022 and met all the qualifying conditions under the VDP. Hence, no penalty is imposed on the error.	Company A voluntarily disclosed its errors 1 year after the grace period ended on 30 Nov 2023. Hence, a reduced penalty of 5% of the tax undercharged was imposed on the company.	Company A voluntarily disclosed its errors 3 years after the grace period ended on 30 Nov 2023. Hence, a reduced penalty of 15% of the tax undercharged (i.e. 5% penalty for each year that the errors were late in being rectified) was imposed on the company.

Example 2: Computation of reduced penalty on errors voluntarily disclosed by an individual in his Individual Income Tax Return within and after the grace period

Mr Andrew discovered that he had omitted to declare an income of $30,000 in his Individual Income Tax Return for the Year of Assessment (YA) 2023, after the filing due date on 18 Apr 2023. The tax undercharged was $6,600. Mr Andrew made a voluntary disclosure and met all the qualifying conditions under the VDP.

The table below shows the reduced penalty amount (if applicable) depending on when Mr Andrew voluntarily disclosed the errors:

Date of voluntary disclosure of errors	Date of disclosure is within the 1 year grace period (i.e. anytime between 19 Apr 2023 and 18 Apr 2024)	Date of disclosure is 1 year after the grace period (i.e. anytime between 19 Apr 2024 and 18 Apr 2025)	Date of disclosure is 3 years after the grace period (i.e. anytime between 19 Apr 2026 and 18 Apr 2027)
Amount of reduced penalties imposed (if any)	No penalty will be imposed.	A reduced penalty of $330 (5% X $6,600) will be imposed.	A reduced penalty of $990 (5% X $6,600 X 3 years) will be imposed.
Explanation	Mr Andrew voluntarily disclosed the errors within the 1-year grace period from the statutory filing deadline of 18 Apr 2023 and met all the qualifying conditions under the VDP. Hence, no penalty is imposed on error.	Mr Andrew voluntarily disclosed the errors 1 year after the grace period ended on 18 Apr 2024. Hence, a reduced penalty of 5% of the tax undercharged was imposed.	Mr Andrew voluntarily disclosed the errors 3 years after the grace period ended on 18 Apr 2024. Hence, a reduced penalty of 15% of the tax undercharged (i.e. 5% penalty for each year that the errors were late in being rectified) was imposed.

Extension of grace period for voluntary disclosure to the extended filing/submission deadlines announced by IRAS in year 2020

To support taxpayers that want to rectify past errors, but experience difficulties putting together the information during this COVID-19 period, IRAS had provided a one-time extension of timelines for determining whether an error was disclosed within the grace period.

This one-time extension is in line with the measures to manage the COVID-19 situation where IRAS had extended the filing deadlines for (i) YA 2020 Individual Income Tax returns, (ii) GST returns for accounting period ending Mar 2020, (iii) YA 2020 Income Tax returns for trusts, clubs and associations, (iv) S45 withholding tax forms due in Apr 2020 and (v) tax clearances.

The one-time extension only applies to errors that relate to:

YA 2019 Individual Income Tax returns
GST returns for accounting period ended Mar 2019
YA 2019 Income Tax returns for trusts, clubs and associations
S45 withholding tax forms due in Apr 2019

For voluntary disclosure of errors pertaining to tax returns relating to other taxable periods, the grace period will be determined as 1 year from the statutory filing deadline of the relevant tax returns.

Example of How the Extension of Grace Period for Voluntary Disclosure is Applied for the Above Errors

Scenario	Prior to extension	After one-time extension
An individual taxpayer discloses an error in his YA 2019 return on 1 May 2020.	The error would attract penalty, as the disclosure is made more than 1 year after the statutory filing deadline of 15 Apr 2019, i.e. after the grace period.	The disclosure of the error will be treated as falling within the grace period and will not attract penalty. This is because it is made before the extended YA 2020 Individual Income Tax filing deadline of 31 May 2020.
A GST taxpayer discloses an error in his return for the accounting period ending Mar 2019 that was due on 30 Apr 2019 on 1 May 2020.	The error would attract penalty, as the disclosure is made more than 1 year after the statutory filing deadline of 30 Apr 2019, i.e. after the grace period.	The disclosure of the error will be treated as falling within the grace period and will not attract penalty. This is because it is made before the extended filing deadline of 11 May 2020.
A taxpayer discloses an error in the YA 2019 return for his trust/club/association that was due on 15 Apr 2019 on 1 May 2020.	The error would attract penalty, as the disclosure is made more than 1 year after the statutory filing deadline of 15 Apr 2019, i.e. after the grace period.	The disclosure of the error will be treated as falling within the grace period and will not attract penalty. This is because it is made before the extended filing deadline of 30 June 2020.
A taxpayer discloses his failure to e-file and pay the S45 Withholding Tax due on Apr 2019 on 1 May 2020	The error would attract penalty, as the disclosure and payment is made more than 1 year after the deadline of 15 Apr 2019, i.e. after the grace period.	The disclosure of the error will be treated as falling within the grace period and will not attract penalty. This is because it is made before the extended deadline of 15 May 2020.

Voluntary disclosure of past actions involving wilful intent to evade taxes or obtain excessive cash payout/bonus

Taxpayers who commit offences involving wilful intent to evade taxes or obtain excessive cash payouts/bonus, including persons who assisted in such acts, may face prosecution, and the consequent punishment of being jailed up to 7 years and/or fined up to $50,000, and penalised up to 400% of tax undercharged/unpaid.

When you come forward and voluntarily disclose past actions involving a wilful intent to evade taxes or obtain excessive cash payouts/bonus, your offences may be treated with a compounded penalty rate of 200% in lieu of prosecution. This treatment applies to Income Tax, Withholding Tax and GST.

However, if you do not meet the qualifying conditions for IRAS' VDP, you may be charged in court for your tax evasion offences.

For guidelines to differentiate cases involving wilful intent to evade taxes or obtain excessive cash payout/bonus, please refer to Annex E of the e-Tax Guide on IRAS' Voluntary Disclosure Programme (PDF, 529KB).

Making a voluntary disclosure

a) For voluntary disclosure of errors relating to tax returns, you can inform us in the following ways:

Tax Type	How to Inform IRAS
Individual Income Tax	For Self-employed and Partnerships Self-employed persons, precedent partners of partnership or tax agents making a voluntary disclosure to correct the errors made on their own past tax filings or on behalf of their clients may make the voluntary disclosure by completing this form. The required information and supporting documentation are detailed in Annex F of e-Tax Guide. For all individuals excluding self-employed persons and partners of partnerships Email the required information and supporting documentation (detailed in Annex F of e-Tax Guide) by logging in to myTax Portal: Under “Email Us (myTax Mail), select “Compose Mail” Under “Category”, select “Individuals” and your most relevant profile Under “Subject”, select “Voluntary Disclosure of Errors” Under “Message”, provide the details of errors made Tax agents / employers making a voluntary disclosure of errors for their clients / employees may disclose the errors by completing this form.
Corporate Tax	Make the voluntary disclosure via the "Revise/Object to Assessment" e-Service at mytax.iras.gov.sg (recommended) and receive an instant acknowledgement. You may also receive the revised Notice of Assessment earlier. Email required information and supporting documentation (detailed in Annex F of e-Tax Guide (PDF, 529KB)) to [email protected]
GST	Send an electronic request to IRAS for GST F7 (Disclosure of Errors on GST Return) and e-File the GST F7 at any time, up to 14 days from the date of request for the GST F7 For GST late registrants, register for GST online at myTax Portal For unauthorised GST collections or disclosure of input tax claimed on any supply that was a part of a Missing Trader Fraud arrangement ^New, email [email protected]
Withholding Tax	Submit S45 VDP application
Stamp Duty	Stamp document via the e-Stamping system

b) For voluntary disclosures of past actions involving a wilful intent to evade taxes or obtain excessive cash payout/ bonus, you can either:

Email IRAS at [email protected]; or
Write in to:
Inland Revenue Authority of Singapore
Revenue House
55 Newton Road
Singapore 307987