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Failure to File Tax Returns: Potential Consequences

Failure to file your Corporate Income Tax Returns, financial statements, and tax computations by the due date is a serious offense. IRAS may take the following actions:

• Estimated Assessment: IRAS may issue an estimated Notice of Assessment, requiring immediate payment within one month.
• Compounding Offer: You may be offered the option to compound the offense.
• Director’s Notice: A Section 65B(3) notice may be issued to your company director, demanding the submission of required information.
• Legal Action: IRAS may issue a Notice to Attend Court or Summons to the company or its responsible individuals, including directors.

Note: Even dormant companies must e-File the Form for Dormant Company unless granted a waiver

Estimated Notice of Assessment

IRAS may issue an estimated Notice of Assessment based on your company’s past income or available information. This assessment may involve assumptions about increased income.

If you receive an estimated Notice of Assessment, you must:

1. Pay the estimated tax: Pay the estimated tax within one month of the Notice of Assessment date, even if you plan to object. Late payment penalties apply.
2. File an objection: If you disagree with the assessment, file an objection within two months of the Notice of Assessment date.
3. Submit required documents: When filing the objection, submit your Corporate Income Tax Returns, financial statements, and tax computation. Failure to do so will prevent a review of the estimated assessment.

If you submit all required documents, IRAS will review your objection and refund any excess tax paid.

Offer of Composition

IRAS may offer your company a chance to settle a late filing offense by paying a composition amount. This amount typically doesn’t exceed $5,000 and depends on your company’s past compliance record. You’ll receive a notice with the specific amount.

To settle the offense:

• Pay the composition amount: Make a payment within the due date using the preferred payment modes (excluding GIRO) and quote the reference number provided in the notice.
• File the overdue tax return and documents: Submit all required documents alongside your tax return to avoid further legal action. The paid amount will be used to settle any outstanding tax.

Appealing the Composition Amount

You can appeal the composition amount online via the Appeal Penalty Waiver digital service on http://mytax.iras.gov.sg . However, appeals are only considered if:

• You’ve already submitted the overdue tax return and documents by the deadline mentioned in the offer.
• Your company has filed tax returns on time for the past two years (including accounts, tax computations, and additional information, if applicable).

 Section 65B(3) of the Income Tax Act

IRAS may issue a Section 65B(3) notice to your company’s director, requesting specific information. The director must provide the requested information by the deadline to avoid potential legal action, such as being summoned to court.

Notice to Attend Court/Summons

If IRAS does not receive the required tax returns, documents, or composition amount by the deadline, your company and/or its directors may be issued a Notice to Attend Court/Summons.

To avoid court appearance:

• File the outstanding tax return and/or documents.
• Pay the composition amount (quote the payment slip number).

Postponing a Court Hearing:

If you need more time, your company’s authorized representative must attend court with a Letter of Authorization to request a postponement.

Consequences of Non-Compliance:

• Failure to attend court: May result in further legal action, including a warrant of arrest for the company director.
• Conviction: May lead to fines for the company and/or its directors.
• Outstanding tax returns: Must still be filed to avoid further legal action.

Failure to File for Two or More Years

If your company fails to file tax returns for two or more years, it may face a court summons. Upon conviction, the company may be ordered to pay:

• A penalty of twice the assessed tax amount.
• A fine of up to $5,000 per offense.

Filing Outstanding Tax Returns:

Before you begin: You’ll need to be authorized via Corppass to access IRAS digital services.

To file your outstanding returns:

1. Register for Corppass (if not already done) by following the step-by-step guides available on the IRAS website.
2. Once registered, log in to http://mytax.iras.gov.sg using your Corppass credentials.
3. E-File your outstanding Corporate Income Tax Returns.

If your company needs help filing taxes for the year 2024, or requires assistance with Singapore incorporation, economy, banking, etc., feel free to call/WhatsApp us at +65 90612851 or email us at aceglobalacct@gmail.com. Alternatively, you may leave us a reply using our contact form below.

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