Singapore proposes automatic 50 per cent penalty for tax avoidance
The proposal, in the draft Income Tax (Amendment) Bill 2020, accompanies a rewrite and extension of the current general anti-avoidance provision, through a repeal and re-enactment of s.33-33A of the Stamp Duties Act.
The avoidance surcharge will take effect when the Comptroller of Income Tax (CIT) imposes a tax liability on a person under s.33, or recomputes any gain, profit, loss, capital allowances or deductions for donations made by a person, with effect from the 2023 tax year. The surcharge, equal to half the amount of tax imposed on the person, will then be recoverable by the CIT as a debt, and must be paid within one month after a written notice is served on the taxpayer, irrespective of any objection or appeal. Similar powers are being proposed in respect of the stamp duty anti-avoidance provisions.
The consultation is open until 7 August 2020. The government will set its policy by the end of September.
Separately, the Monetary Authority of Singapore is proposing to expand its anti-money laundering supervisory powers to cover Singapore-based providers of digital token services to overseas clients.
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