If IRAS has raised an estimated assessment on your company, for example using bank deposits, third-party data or industry benchmarks, you can object, but you must do it in time and you must usually pay the tax while the objection is decided. For corporate income tax, the objection is filed through myTax Portal within 2 months of the Notice of Assessment. For GST, it must be in writing within 30 days. The objection needs evidence: a reconciliation showing which deposits are not taxable income, and records supporting the real figures. If IRAS rejects the objection, there is a further appeal to the Board of Review.
Why IRAS estimates
IRAS raises estimated assessments in two broad situations. The first is routine: a company has not filed its estimated chargeable income or Form C-S/C, or its return is still under review. The second is enforcement: an audit finds that declared sales are incomplete, or records are inadequate, and IRAS works out the tax another way. IRAS’s recent outreach letters to businesses say plainly that in an audit it may estimate the tax owed, by the business or by the individual, using bank records, third-party data and industry benchmarks, and that tax assessed must be paid pending any objection or appeal.
An estimate built from bank deposits tends to overstate income, because it starts from every credit in the account. That is where a good objection does its work.
Deadlines at a glance
| Step | Corporate income tax | GST |
|---|---|---|
| Pay the tax | Within 1 month of the Notice of Assessment, even if you object | By the due date on the notice |
| Object | Within 2 months of the Notice of Assessment, through Revise/Object to Assessment on myTax Portal. Otherwise the assessment is treated as final | In writing to the Comptroller of GST, with detailed reasons, signed and dated, within 30 days of the Notice of Assessment |
| Appeal if the objection fails | To the Income Tax Board of Review, within the period stated in IRAS’s decision | Notice of appeal to the GST Board of Review within 30 days of the decision, then a petition of appeal within a further 30 days |
Sources: IRAS pages on objecting to a corporate tax assessment and objecting to a GST audit assessment. On appeal, the burden is on the taxpayer to show the Comptroller’s decision is wrong.
What if you cannot pay while objecting?
Unpaid tax attracts a 5% late payment penalty. For corporate income tax, a further 1% a month may follow after 60 days, up to 12%. For GST, the further penalty is 2% a month, up to 50% of the unpaid tax. IRAS may also appoint the company’s bank as its agent to collect the tax. If the assessment is later reduced, IRAS revises the penalty and refunds the overpayment, so paying first does not lose you anything if the objection succeeds.
If paying in full is not possible, ask for a payment plan through myTax Portal (the GIRO plan service) before penalties and recovery action start.
Building an objection to a bank-deposit estimate
- List every credit. Export the statements for every account IRAS used, including personal accounts if they were included.
- Classify each deposit. Separate sales from items that are not income: transfers between your own accounts, loans and loan drawdowns, capital injected by shareholders, refunds and reversals, deposits held for customers, sale of assets, and personal money such as salary or family transfers.
- Prove each exclusion. Loan agreements and bank letters, share allotment records, transfer records showing both ends, refund documentation. Unsupported explanations rarely succeed.
- Rebuild the real figures. Reconcile sales, expenses and GST for each period, and show how they tie to the bank.
- Write the objection. State the grounds, the figures you say are correct and how you reached them, and attach the schedules and evidence.
- Answer IRAS’s follow-up questions. Respond fully and by the dates given. Keep a copy of everything submitted.
Be careful about consistency. If the reconstruction shows income that was never declared, the objection and any disclosure must reflect it. An objection that understates income can make matters worse.
Example
Example only, not a client case. IRAS reviews a trading company whose declared sales are S$700,000. Its bank account shows credits of S$1.3 million, and IRAS issues an additional assessment treating the difference as undeclared sales. The company pays the tax under protest and objects within two months. Its schedules show S$350,000 of the credits were a director’s loan and shareholder capital, supported by a loan agreement and allotment records, and S$120,000 were transfers from its own fixed deposit. The remaining S$130,000 are customer receipts missed from the ledger, which the company accepts. IRAS revises the assessment to tax only the S$130,000 and refunds the excess.
When you need a lawyer
An appeal to the Board of Review is a formal legal proceeding, and estimates arising from suspected evasion may be accompanied by penalties or investigation. In those cases a lawyer should be involved. We continue to prepare the financial reconstruction that supports the case.
Not every Notice of Assessment needs an objection. See which IRAS notices to object to, and the deadlines.
Frequently asked questions
We missed the objection deadline. Is there anything we can do?
For corporate tax, IRAS says the assessment is treated as final if no objection is received in time. Contact IRAS at once, explain what happened, and get advice on what options remain before taking any other step.
Does filing the missing return cancel an estimated assessment?
Where the estimate was raised because a return was not filed, filing the actual return or declaring the actual GST usually leads IRAS to revise the assessment and the related penalty. IRAS’s GST examples show the estimate and penalty being revised to the declared figure.
Can IRAS assess an individual on company income found in their account?
IRAS’s outreach letters say it may estimate tax owed by the business or by the individual. See our guide to business income paid into a personal bank account.
More on the tax and GST hub.
Need help objecting to an IRAS assessment?
If your company, or you as a director or shareholder, has received an estimated or additional assessment you disagree with, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133 or +65 9018 0072. We will help you understand the documents and deadlines, reconcile the bank records and prepare the objection. Where your matter needs a lawyer, we will refer you to a firm on our panel of Singapore law firms that regularly handles tax disputes and Board of Review appeals. Raffles Corporate Services is a corporate services provider, not a law firm, and this article is general information, not legal advice.
Kevin Yeo, Raffles Corporate Services