Business in Singapore: Late Payment or Non-Payment of Taxes

In Singapore, most taxpayers pay their taxes on time. However, to ensure that all businesses are in compliance with paying taxes, there are penalties for the businesses if their taxes amount is not paid on time.

Late Payment Penalty

You have one month from the date of receiving the Notice of Assessment (NOA) to pay your taxes.

You are still required to pay the tax assessed as shown on the NOA by the payment due date even if you have filed an objection and are awaiting the outcome. If the assessment is subsequently revised, any excess payment will be refunded.

If payment is not received by the due date, a 5% penalty and subsequently an additional 1% penalty will be imposed for every completed month (up to a maximum of 12% of the tax outstanding).

Late Payment Penalty Letter

In case you are not pay taxes on time, you will receive a letter that informed you of the 5% penalty. Payment must be made by the due date stated on the letter to avoid further enforcement actions from IRAS.

GIRO Cancellation or Termination

If the deduction through GIRO is unsuccessful due to reasons such as insufficient funds in the bank account, or the deduction amount is higher than the limit set, etc., IRAS will cancel the GIRO plan.

A late payment penalty letter and a GIRO cancellation letter will be issued to inform you that the GIRO plan has been cancelled.

Imposition of Additional Penalty

If the tax remain unpaid 60 days after the imposition of the 5% penalty, you will get additional penalties of 1% per month. The 1% penalty will be imposed for each completed month that the tax remains unpaid, up to a maximum of 12% of the tax outstanding (inclusive of the 5% late payment penalty).

Further Enforcement Actions

If the tax continues to remain unpaid, other actions to recover the taxes may include:

  • Appointing agents like your bank, employer, tenant or lawyer to pay the moneys to IRAS;
  • Issuing a Travel Restriction Order (TRO) to stop you from leaving Singapore; and/or
  • Taking legal action.

In addition to the recovery actions, IRAS may concurrently impose an additional 1% penalty on the overdue tax for each completed month that the tax remains unpaid, up to a maximum of 12% of the tax outstanding.

Releasing Appointed Agents

Agents will only be released from the appointment after the tax and penalties have been paid, or when payment has been arranged with IRAS.

Note:
For banks appointed as agents, requests for release cannot be processed on Saturdays, Sundays and Public Holidays. Any request for release of bank after 2pm on weekdays can only be processed on the next working day.

Travel Restrictions

If a Travel Restriction Order (TRO) is issued, you will be stopped from leaving Singapore at the Immigration exit checkpoints.

The TRO will be withdrawn upon full payment of the tax due. To do so, you are required to produce the proof of payment to the Immigration & Checkpoints Authority (ICA) officer. It is your responsibility to ensure that you have a valid pass to remain in Singapore. If extension of time is required to resolve your tax matters with IRAS, please approach the ICA to extend your stay in Singapore.

Please note that IRAS is unable to withdraw the TRO on weekends and Public Holidays.

Checking Tax Balance and Making Payment

Please log in to myTax Portal and select “View Account Summary” to check your current balance.

Please refer to Income Tax Payments for the various payment modes available.

Appeal for Late Payment Penalty Waiver

Appeals have to be made online via myTax Portal and will only be considered if the following conditions are met:

  1. You have paid the overdue tax in full, by the due date as stated in the late payment penalty letter;and
  2. This is your first appeal; or  
    b. You have paid on time for the past two years.

Source: Inland Revenue Authority of Singapore

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