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.For daily updates on weekdays and specially selected content for the weekend. Subscribe to
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