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Why Voluntary Disclosures to IRAS Fail: Seven Mistakes That Cost the Reduced Penalty

Colleagues discussing documents in a meeting

A voluntary disclosure to IRAS only earns the reduced penalty if it meets every condition: it must be timely, self-initiated, accurate and complete, the business must cooperate fully, and the tax and any penalty must be paid or a payment plan honoured. IRAS’s own examples show disclosures failing because documents were not supplied by the agreed deadline, follow-up questions went unanswered, a related party was already under investigation, or an instalment plan was broken. When that happens, the errors can attract penalties of up to 200% of the tax instead of 0% or 5%. Most failures are avoidable with preparation.

This may be your last chance to deal with it before an audit, an investigation or prosecution. If past declarations were deliberately wrong, IRAS treats it as tax evasion, which is a criminal offence. IRAS says a voluntary disclosure that meets all its conditions may be settled by compounding at a reduced penalty instead of prosecution. Once IRAS starts an audit or investigation into the matter, that route closes for it. Ignoring the letter, missing the deadline or making a partial disclosure throws the opportunity away. It has to be handled properly: completely, on time and with professional advice. No adviser can guarantee the outcome, but acting now is the best position you can be in.

Colleagues discussing documents in a meeting while preparing a tax disclosure

Why it matters

Outcome GST penalty (IRAS published treatment)
Qualifying disclosure within 1 year of the return’s filing deadline No penalty
Qualifying disclosure after that Flat 5% of the GST undercharged
Disclosure that fails, or errors found by IRAS Up to 200% of the tax undercharged

Income tax is similar, with 5% for each year an error was late in being corrected after the grace period. Figures are from IRAS’s Voluntary Disclosure Programme e-Tax Guide (13th edition, 30 January 2026). See our guide to the programme for the basics.

Seven ways a disclosure fails

1. It comes too late

A disclosure is self-initiated only if it is made before IRAS sends a query on the matter, or notifies an audit or investigation of it. After that, errors directly related to the scope of the query, audit or investigation do not qualify. The exception is IRAS’s own outreach programmes: a disclosure made within the time frame in a mass mailer, such as a Voluntary Disclosure Opportunity letter, can still qualify.

2. A related party is already under investigation

IRAS gives the example of a partner who made an accurate and complete disclosure of omitted partnership income. It did not qualify, because his business partner was already under investigation for the same partnership. Family businesses and groups of related companies should therefore coordinate and disclose together, not one at a time.

3. It is incomplete

A disclosure is complete only when all the required information has been submitted. IRAS’s example is a taxpayer who came forward after reading about IRAS’s compliance focus but did not provide a complete set of documents by the agreed deadline. Even though he later cooperated and paid, the disclosure did not qualify.

4. Extra time was not agreed, or the agreed date was missed

If you need more time to assemble documents, IRAS’s guide says to tell it how much time you need and why. The extra time should not be more than three months from the disclosure, and if everything is not submitted by the agreed date, the application is invalid. Never let the agreed date pass silently.

5. IRAS’s follow-up questions go unanswered

IRAS’s third example is a business that filed a GST F7 to disclose input tax errors, then ignored IRAS’s questions about the actual amount even after reminders. It failed for lack of cooperation, even though it later paid.

6. The payment plan is broken

In IRAS’s fourth example, the disclosure was accurate and complete and the business cooperated, but it did not keep to its payment arrangement. It lost the reduced penalty.

7. The paperwork is not signed off properly

For a company, the disclosure should be made by the managing director or chief executive, or an officer they authorise with a letter of authority, and it must be signed and dated. It must also explain how the errors were discovered and the controls put in place to prevent them recurring, and confirm that the disclosure is complete, that the business will cooperate and that the tax will be paid. For GST, remember that a GST F7 must be filed within 14 days of requesting it in myTax Portal, or the request lapses.

A checklist before you disclose

Frequently asked questions

We found more errors after we disclosed. What now?

Tell IRAS promptly and supplement the disclosure. IRAS’s examples turn on whether the disclosure was complete and whether the taxpayer cooperated, so new findings should be raised, not held back.

Does correcting our accounting software fix the problem?

No. Returns already filed must be corrected separately. See how to correct past GST errors.

More on the tax and GST hub.

Planning a voluntary disclosure to IRAS?

If your company has found past tax or GST errors and wants to disclose them properly, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133 or +65 9018 0072. We will review the periods involved, quantify the errors, prepare a complete disclosure and handle IRAS’s follow-up questions and payment arrangements. Where any of it may have been deliberate, we will refer you to a firm on our panel of Singapore law firms that regularly handles tax investigations and voluntary disclosures. Raffles Corporate Services is a corporate services provider, not a law firm, and this article is general information, not tax or legal advice.

Kevin Yeo, Raffles Corporate Services

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