Being selected for an Inland Revenue Authority of Singapore (IRAS) audit can be stressful, but understanding the process and preparing well can help you avoid unnecessary penalties. This comprehensive guide explains the types of IRAS audits, the selection process, common triggers, required documentation, and best practices for 2025.
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📌 What is an IRAS Audit?
An IRAS audit is a review conducted by the Inland Revenue Authority of Singapore to ensure that your tax filings are accurate and comply with Singapore’s tax laws. Audits may cover corporate income tax, GST, personal income tax, or other tax obligations.
🔍 Why You Might Be Selected
Common reasons for IRAS audit selection include:
- Large fluctuations in reported income or expenses
- Unusually high claims for tax deductions or reliefs
- Discrepancies between reported figures and third-party data
- Random selection as part of compliance checks
- Late or incomplete tax filings
📋 Types of IRAS Audits
| Audit Type | Focus Area | Examples |
|---|---|---|
| Desk Audit | Basic review of submitted tax returns | Requests for supporting documents for deductions |
| Field Audit | On-site inspection of records and accounts | Reviewing company accounts at office premises |
| GST Audit | Ensuring GST collection and reporting accuracy | Checking GST invoices and input claims |
📄 Documents You May Need to Provide
- Tax computation and supporting schedules
- Invoices, receipts, and payment vouchers
- Bank statements and financial records
- Payroll records and CPF contribution statements
- Contracts, agreements, and other legal documents
📅 The IRAS Audit Process – Step-by-Step
- Notification: IRAS sends an audit letter explaining the scope and timeline.
- Information Request: You provide the requested records and documents.
- Review & Analysis: IRAS reviews your documents for discrepancies.
- Clarifications: IRAS may request explanations or additional data.
- Audit Conclusion: You receive a final report and tax adjustments if required.
✅ How to Prepare for an IRAS Audit
- Maintain accurate and complete records for at least 5 years.
- Respond promptly and professionally to IRAS requests.
- Ensure your tax agent or accountant is informed.
- Double-check past filings for errors or missing data.
- Be transparent – hiding information may lead to heavier penalties.
⚠️ Penalties for Non-Compliance
If IRAS finds that you have under-reported taxes, you may face:
- Additional tax assessments
- Penalties of up to 200% of the tax underpaid
- Prosecution for serious tax evasion cases
📌 Final Takeaway
An IRAS audit does not always mean wrongdoing, but it is a signal to review your tax practices. By staying compliant, keeping proper records, and cooperating fully, you can navigate the audit process with minimal disruption.
