You are here

Investment firm gets S$25,000 fine, S$955,580 penalty for incorrect declaration in tax returns: Iras

THE Inland Revenue Authority of Singapore (Iras) on Monday said Hwa Luck Investments and its controlling director Tan Hwa Luck were convicted for incorrect declaration of directors' fees in the company's corporate income tax returns.

The court has ordered for Tan to pay a fine of S$25,000 and a penalty of S$955,580, twice the amount of tax undercharged. This is for the five proceeded charges of giving incorrect information without any reasonable excuse in the corporate income tax returns.

The remaining eight charges were being taken into consideration for the purposes of sentencing.

The court also sentenced the investment company to a fine of S$25,000 and a penalty of S$955,580, twice the amount of tax undercharged.

Hwa Luck Investments declared in its corporate income tax returns that directors' fees amounting to a total of S$3,386,000 were incurred as expenditures between the 1995 and 2007 years of assessment.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

Tan claimed that the directors' fees were paid out to four directors and that the fees were paid in two lump-sum payments in fiscal 2006 and 2009. To substantiate his claims, Tan presented cheques, payment vouchers and bank statements to Iras.

However, investigations found that the four directors did not receive any lump-sum payment of directors' fees and the payee of the lump-sum directors' fees was Tan. The monies were eventually routed back into Hwa Luck Investments' corporate bank account.

As Hwa Luck Investments and Tan gave incorrect information in the company's corporate income tax returns, there was total tax undercharged of S$763,285 from the 1995 to 2007 years of assessment.

Iras said businesses or individuals are encouraged to immediately disclose any past tax mistakes. It will treat such disclosures as mitigating factors when considering action to be taken.

"Any business that gives incorrect information in its Income Tax Returns without reasonable excuse may be liable to a penalty that is twice the amount of tax undercharged. A fine and/or a jail term may also be imposed," Iras said.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes