Receiving a letter from the Inland Revenue Authority of Singapore (IRAS) can be unsettling, even for businesses that keep careful records. Knowing how to respond to an IRAS query or review letter professionally is one of the most practical compliance skills a director or finance manager can have. A clear, timely and well-supported reply often resolves the matter quickly, while a late or vague one tends to invite further questions.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This article explains what these letters usually mean, how to prepare a response, and where companies commonly go wrong. It is general information only and does not replace advice on your own facts.
Who this applies to
An IRAS query or review letter can reach any entity that files with IRAS. That includes private limited companies, sole proprietorships, partnerships, and GST-registered businesses, as well as employers who submit employee income data. It is not a sign of wrongdoing in itself. IRAS selects cases for many reasons, including routine risk-based checks, mismatches between data from different sources, unusual claims, or simple clarification of a filing.
In practice, the people who deal with these letters are directors, finance staff, and the corporate secretary or tax agent who handles the company’s filings. If your company outsources its accounting or tax work, the letter should be shared with the provider as soon as it arrives.
Key rules and requirements in Singapore
IRAS has the power to request information and documents from taxpayers to verify the accuracy of returns. Companies are expected to keep proper accounting records under the Companies Act, and IRAS generally expects tax-related records to be retained for at least five years. These records must be able to support the figures reported in Form C-S or Form C, the GST returns, and any other filing.
Read the letter for its exact request
Each letter states what IRAS wants, the year or period involved, and a deadline. Letters are commonly delivered through the myTax Portal, so check your Corppass-linked mailbox as well as postal mail. The deadline matters. If you cannot meet it, you should ask for an extension before it passes, not after.
Answer what is asked
The reply should address the questions raised and provide the documents requested. Volunteering large amounts of unrelated material can open new lines of enquiry and slow the review down.
Step-by-step process
- Log the date the letter was received and the reply deadline, and brief the director responsible.
- Read the letter twice and list each question or document requested as a separate item.
- Identify the financial year, the filing and the figures concerned, and pull the relevant ledger entries, invoices, contracts and bank statements.
- Establish the facts internally first. Speak to whoever handled the transaction so that you understand what happened before you describe it to IRAS.
- Check whether any error was made. If the original filing was wrong, consider correcting it and disclosing the error rather than defending it.
- Draft a reply that answers each item in the same order as the letter, with a short explanation and a reference to the supporting document.
- Have a second person review the draft for consistency with the filed return and the accounts.
- Submit through the channel IRAS specified, keep a copy of everything sent, and note the submission date.
- Follow up if you hear nothing within a reasonable time, and respond promptly to any further questions.
Common mistakes to avoid
The most frequent problem is simply delay. Letters are left on a desk or in an inbox while the deadline runs out. A second common mistake is replying from memory, without checking the books, which leads to statements that do not match the records. Others include sending incomplete documents, giving inconsistent explanations in different letters, and treating the query as a debate rather than a request for evidence.
Another error is assuming that a small mistake does not need correcting. If a review shows that income was understated or an expense was wrongly claimed, voluntary disclosure of the error is usually viewed more favourably than waiting for IRAS to identify it. The tone of the reply also matters. A courteous, factual and concise letter reflects well on the company, while an emotional or defensive one does not.
Practical examples
Example 1: A query on an expense claim
A company claims SGD 18,000 in consultancy fees, and IRAS asks for the agreement and invoices. The prepared reply includes the signed engagement letter, the invoices, proof of payment, and a short note on the nature of the services and why they relate to producing the company’s income. Because each document is referenced, the reviewer can confirm the claim without a second round of questions.
Example 2: A GST mismatch
A GST-registered business receives a letter noting a difference between its reported sales and its accounting data. After reconciling, the finance team finds that a batch of zero-rated export sales was entered in the wrong box. The business prepares a reconciliation, explains the cause, and submits a correction. The clear audit trail shows that the error was unintentional and has been fixed.
Example 3: An extension request
A company is told to submit supporting documents within the stated period, but its bookkeeper is overseas and the files are incomplete. The director writes to IRAS before the deadline, explains the reason, and proposes a specific new date. Asking early, with a concrete date, is far better than missing the deadline silently.
How a corporate secretary can help
A corporate secretary in Singapore is often the first person to see correspondence from the authorities, and can make sure that letters are logged, escalated and answered on time. At Raffles Corporate Services, our team supports clients with accounting, tax and GST filings, payroll support, and ACRA compliance, and can review a draft reply for completeness and consistency with your filed returns. We can also help to prepare the supporting schedules, coordinate with your directors, and keep the response file organised for future reference.
Where a matter involves a dispute over tax treatment or potential penalties, we can work with your tax adviser or a lawyer so that the response is handled by the right professional.
Frequently Asked Questions
Does an IRAS query mean my company is being audited?
Not necessarily. Many queries are simple requests for clarification. Some lead to a fuller review, but the letter itself will normally say what type of check is being carried out.
What if I cannot meet the deadline?
Contact IRAS before the deadline, explain the reason, and propose a realistic date. Do not wait until the deadline has passed.
Should I correct a mistake I find while preparing my reply?
Generally, yes. Informing IRAS of a genuine error promptly is usually better than leaving it for IRAS to find. Your adviser can explain the options and likely consequences for your situation.
How long should I keep records?
IRAS generally expects tax records to be kept for at least five years, and the Companies Act also requires proper accounting records. Keep them in a form that can be produced quickly.
Can my corporate secretary or tax agent reply for me?
In many cases, yes, provided the appropriate authorisation is in place. The company’s directors remain responsible for the accuracy of what is filed and said on its behalf.
Key takeaways
- An IRAS letter is a request for information, not an accusation, but it must be taken seriously.
- Note the deadline on day one and ask for an extension early if you need one.
- Establish the facts from your own records before you reply.
- Answer each question in order, with supporting documents and a clear, courteous tone.
- Correct genuine errors promptly rather than defending them.
- Keep complete records and a copy of every reply.
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.