The Inland Revenue Authority of Singapore (IRAS) imposes penalties on individuals and companies who do not pay their taxes or delay paying their taxes (i.e. pay their taxes late). Taxes should be paid one month from the Notice of Assessment (NOA) before the due date.
For companies
The penalties that can be levied on companies for late payment are:
- a 5 per cent penalty on the overdue tax
- An additional 1 per cent penalty per month on the tax that remains unpaid after the first 5 per cent penalty. This is capped at a maximum of 12 per cent.
If taxes continue to be unpaid, IRAS may appoint agents to recover the unpaid taxes. These agents may be the company’s bank, any tenants or lawyers. IRAS can instruct the bank to pay the unpaid taxes with the monies in the company’s bank account. It may also contact the tenants if the company is leasing any property to tenants and get them to pay the unpaid taxes with the rent which they would otherwise have paid the company. IRAS may also engage a lawyer to help with the recovery. They may take legal action against the company.
The corporate tax filing deadline is on the 15th of December.
For individuals
The penalties that can be levied on individuals is similar to companies. If there is an objection to the tax assessment, you can file an objection. You will still need to make the payment on the tax while waiting for the outcome of the objection. If the assessment is revised, the excess tax will be refunded to you.
The penalties that can be levied on individuals for late payment are:
- a 5 per cent penalty on the overdue tax
- An additional 1 per cent penalty per month on the tax that remains unpaid after the first 5 per cent penalty. This is capped at a maximum of 12 per cent.
If taxes are unpaid, IRAS may appoint agents to recover the unpaid taxes. These agents may be your bank, employer, tenant or lawyer. IRAS can instruct the bank to pay unpaid taxes with the monies in your personal bank account. It may also contact your employer to inform your employer to recover the unpaid taxes from your salary. It may also contact the tenants if you are leasing any property to tenants and get them to pay the unpaid taxes with the rent which they would otherwise have paid you. IRAS may also engage a lawyer to help with the recovery. They may take legal action against you. IRAS may also issue a Travel Restriction Order (TRO) to stop you from leaving Singapore.
If you are unsure of tax matters, you may contact us at [email protected].
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The editorial team at Singapore Secretary Services
For more useful articles and videos, visit the Singapore Secretary Services resource page.
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