The Inland Revenue Authority of Singapore (IRAS) has announced that it will provide rewards of up to $100,000 to informants who report private property buyers using the "99-to-1" loophole or similar arrangements to evade or reduce the Additional Buyer's Stamp Duty (ABSD) on their purchases.
The reward will be equivalent to 15% of the recovered tax, capped at $100,000 for each case. IRAS has previously offered rewards for information on tax avoidance or evasion.
Senior Minister of State for Finance Chee Hong Tat recently revealed that about 0.5% of private residential properties transacted between 2018 and 2021 involved the 99-to-1 arrangement or similar purchase schemes, where owners sold a partial interest in the property to another buyer within a short period.
The loophole enables property owners to avoid paying ABSD while still becoming a co-owner of the additional property and co-applicant for a loan to finance the purchase. IRAS recently sent letters to some first-time buyers asking them to explain why they sold only 1% of the property to a relative within a short period after exercising the purchase option.
IRAS said that it is unable to disclose the number of 99-to-1 transactions it has identified, buyers penalised, or the number of promoters/facilitators referred to regulatory agencies. The audit will be conducted in phases, with investigations into transactions after 2021. IRAS has not yet specified if decoupling arrangements will be investigated.
Informants can report tax avoidance or tax evasion arrangements to IRAS at estamp@iras.gov.sg, and rewards will be at the discretion of the tax regulator.
The identities of informants and information/documents will be kept confidential. Taxpayers who voluntarily disclose and pay any underpayment of taxes will be looked at more favorably. In cases of tax avoidance, the Commissioner of Stamp Duties will disregard or vary the arrangement, recover the rightful amount of stamp duty, and impose a 50% surcharge on the additional duty payable.
Penalties of up to four times the outstanding amount may also be imposed if the stamp duty and surcharge are not paid by the deadline.
Have a story? Send to us here sgtelltale@outlook.com
Commentaires