Corporate Income Tax: Voluntary disclosure of errors for reduced penalties

Key requirements

A qualifying disclosure must be accurate, complete, timely and self-initiated, followed by cooperation and payment or an honoured payment arrangement. For ordinary qualifying errors, disclosure within one year of the statutory filing deadline can receive no penalty. After that grace period, income tax generally uses 5% of undercharged tax for each year the error remained uncorrected after the grace period. GST and withholding tax use separate flat 5% reduced penalties, while stamp duty has a different daily-computed annual basis. These treatments are not interchangeable. Deliberate evasion has separate provisions and should not be treated as an ordinary error. Review the relevant tax and timing conditions before assuming a disclosure qualifies.