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DPM Lawrence Wong noted that of the 166 tax avoidance cases, about 10 with evidence of potential involvement by property agents are currently under review by the CEA. PHOTO: ST FILE
SINGAPORE – The Inland Revenue Authority of Singapore (Iras) has uncovered 166 cases of private home purchases that involved the use of the so-called “99-to-1” or similar arrangements to dodge ABSD
and will claw back about $60 million in ABSD and surcharges.
As of April 2024, Iras has completed the review of 187 “99-to-1” cases, of which 166 cases were found to have involved tax avoidance, said Deputy Prime Minister and Finance Minister Lawrence Wong in a written parliamentary reply on May 7.
Responding to Ms He Ting Ru (Sengkang GRC), Mr Wong said that the “99-to-1” arrangement is a tax avoidance arrangement used by some property buyers to reduce the rightful ABSD payable on the purchase of a residential property.
“When such property purchase arrangements are made to reduce the tax payable, the Commissioner of Stamp Duties is empowered under Section 33A of the Stamp Duties Act to disregard the individual transactions and assess them as a single joint purchase, and to recover the rightful amount of ABSD due, along with a 50 per cent surcharge,” he said.
In relation to the investigations, Ms He asked DPM Wong how many referrals Iras has made to the Council for Estate Agencies (CEA) and the Law Society and if the Government will look into assisting individuals who have been misadvised by estate agents and lawyers to obtain compensation.
Mr Wong noted that of the 166 tax avoidance cases, about 10 with evidence of potential involvement by property agents are currently under review by the CEA.
In April 2023, The Straits Times reported that Iras has offered a reward of up to $100,000 to whistle-blowers who call out private property buyers who use the “99-to-1” or similar arrangements to evade or reduce the ABSD on their purchase.
A reward based on 15 per cent of the tax recovered for each case – capped at $100,000 – will be given to informants if the information and/or documents provided lead to tax recovery, the tax regulator had told ST.
ST also reported that Iras sent letters to some first-time buyers asking them to explain why they sold just 1 per cent of the property to a relative within a short period after exercising the purchase option.
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08-May 2024 Wednesday
1:43 PM (12 days ago)
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