LAMC Productions Pte Ltd (“LAMC”), a local promoter for concerts and entertainment-related events, was ordered by the Court to pay a penalty of $256,212 for failing to declare and pay tax of $85,404, which the company had withheld from the fees paid to non-resident public entertainers.

The penalty is three times the tax amount. LAMC was also fined $25,000 by the Court. This is the first case where a company was prosecuted and convicted for such an offence. 

LAMC Productions Withheld Tax But Failed to Declare and Pay IRAS

IRAS’ investigation revealed that LAMC engaged internationally renowned artistes such as Stereophonics, Pussycat Dolls, Lady Gaga, Keanne and Dionne Warwick to perform in Singapore in 2008 and 2009. After making payments to the non-resident public entertainers’ management companies and withholding tax of $85,404 on these payments, LAMC failed to declare and pay the withholding tax to IRAS.

IRAS Warns Against Tax Evasion

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.

Disclosure of Past Mistakes or Reporting of Malpractices

Businesses or individuals are encouraged to disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose their past mistakes, reveal tax evaded, or report malpractices that might indicate tax evasion may write to:

Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987
Email: [email protected]

 
Inland Revenue Authority of Singapore

About Withholding Tax 

Employer/Company that Engages Services of Non-Residents are Responsible for Withholding Tax Obligations

When a person makes payment of a specified nature (e.g. royalty, management fee, professional or other service fees, etc.) to a non-resident company or individual, he or she is required to withhold a percentage of that payment and pay the amount withheld to IRAS. The amount withheld is commonly known as “withholding tax”.

For income tax purposes, a non-resident refers to an individual who has stayed or worked in Singapore for less than 183 days, or a company where the control and management of its businesses are exercised outside Singapore.

Key Dates for Declaring and Paying Withholding Tax

Where withholding tax is applicable, a person who makes payment to the non-resident must declare and pay the tax withheld to IRAS by the 15th of the second month from the date of payment to the non-resident. For example, if a company made a payment to the non-resident on 26 Jun 2014, the company must declare and pay the withholding tax to IRAS by 15 Aug 2014.

The following penalties will be imposed for late payment:

•  5% penalty on the withholding tax;
• 1% additional penalty on the withholding tax for each completed month the tax remains unpaid up to a maximum of 15%.

Those who need to declare withholding tax can do so online at myTax.iras.gov.sg, and make payment via GIRO arrangement.

It is an offence to withhold tax but not declare and pay the withholding tax to IRAS within the stipulated time. Upon conviction, a Court has power to sentence the accused to:

• A fine not exceeding $10,000; or
• Imprisonment for a term not exceeding three years, or both; AND
• A penalty equal to three times the amount of tax withheld.