IRAS warns on false employment expense tax claims
SINGAPORE – More than 3,000 taxpayers have made false claims for employment expenses, said the Inland Revenue Authority of Singapore (IRAS), adding it is aware that misleading messages on how to reduce income tax have been circulating.
In a statement on Oct 21, IRAS said it had identified the taxpayers through ongoing compliance reviews.
In the messages that were being circulated, taxpayers were encouraged to make false claims for employment expenses that were not incurred or incorrect claims for expenses that are not allowable as tax deductions.
Employment expenses are those that are incurred in the course of carrying out one’s work. Some of these expenses may be deducted from employment income, which reduces the amount that is subject to tax.
The authority advised taxpayers not to rely on misleading information.
Instead, they should ensure that the claims made in their tax returns are valid, accurate and properly substantiated, it said.
Those whose claims require further review will be contacted to verify the accuracy of their claims and to provide supporting documentation, IRAS said, adding that unsupported claims will not be allowed.
Taxpayers with valid, accurate and verifiable claims do not need to worry that their claims will be rejected, it added.
In its statement, IRAS reminded taxpayers that only qualifying employment expenses are tax-deductible.
These expenses must be incurred while carrying out official duties, must not be reimbursed by the employer and must be supported by proper records.
Employment expenses that are not tax-deductible include:
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Personal meals, housing rent, subscription fees and phone bills;
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Public transport expenses between work and home;
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Private car expenses, even if the car is used for work purposes; and
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Buying electronic devices, such as mobile phones and computers, for work purposes.
Taxpayers should also keep relevant supporting documents, such as receipts and invoices, to substantiate their claims, IRAS said.
Claims based on estimates are not acceptable, it added.
The authority said that those who have made incorrect or unsupported employment expense claims should amend or withdraw their claims through the Amend Tax Bill digital service.
If they are unable to do so, they can submit a request to withdraw the claims through an online form or contact IRAS through live chat.
Anyone found to have made false, incorrect or unsupported claims could face additional tax and penalties of up to three times the tax undercharged.
Those charged in court could also be jailed for up to three years, fined up to $10,000, or both.
IRAS urged taxpayers not to rely on unverified tax advice circulating online or from unofficial sources.
Members of the public are also advised not to create, circulate or act on information that encourages false claims, the authority said.
