Clearance Directives
Upon tax clearance, you will receive either:
When to pay
You are required to pay the tax within 10 days from the date of the Clearance Directive.
What if the amount in directive is more than the monies withheld
You may email to taxclear@iras.gov.sg to explain the reasons for not withholding sufficient monies for tax clearance. Please provide the employee's Tax Reference No. to enable us to review your case. Notwithstanding any objection, the full amount of tax must still be paid to IRAS within 10 days from the date of the Clearance Directive.
How to pay
You may wish to explore the various payment options.
Penalties for paying late or not paying once a Directive To Pay is issued
I) 5% late payment penalty
You are given 10 days from the date of the Directive To Pay Tax to make full payment. If you do not pay by the due date, a 5% penalty will be imposed on the Directive amount and you will be notified through a Demand Note. The Directive amount and the penalty are to be paid within 30 days from the date of Demand Note.
Example:
Date of the Directive To Pay Tax is 2 Jan 2011 and the Directive amount is $5,000. If we do not receive any payment from you by 12 Jan 2011, a late payment penalty of $250 (i.e. 5% x $5,000) will be imposed.
| Date of Directive |
Due Date of Directive |
Demand Note Date |
Amount on Directive |
5% Late Payment Penalty |
Total Amount Payable |
Due Date of Demand Note |
| 2 Jan 2011 |
12 Jan 2011 |
13 Jan 2011 |
$5,000 |
$250 |
$5,250 |
13 Feb 2011 |
II) 1% additional penalty
A 1% additional penalty may be imposed 60 days from the due date of the Demand Note if the Directive amount is still not paid.
The 1% penalty may be imposed for each month that the Directive amount remains unpaid. The total additional penalty will not exceed 12%.
Example:
The Demand Note is due on 13 Feb 2011 and the Directive amount is $5,000.
The 1% additional penalty of $50 (i.e. 1% x $5,000) was imposed on 14 Apr 2011 as the Directive amount and penalty were still outstanding.
This penalty may be imposed up to a maximum of 12 months that the tax remains unpaid. Therefore, the maximum additional penalty that can be imposed is $600 (i.e. $50 x 12months).
| Due Date of Demand Notice |
Amount on Directive |
5% Late Payment Penalty |
1% Late Payment Penalty |
Total Amount Payable by 14 Apr 2011 |
| 13 Feb 2011 |
$5,000 |
$250 |
$50 |
$5,300 |
III) Other actions that can be taken to recover the outstanding directive amount and penalties:
We may, without prior notice, recover the outstanding directive amount and penalties by:
- Appointing your bank, tenant or any other third parties to pay the money to us; or
- Taking legal action
Claim refunds
You may wish to find out more on the
claim refunds you are entitled to.
FAQs
You are required to remit the money to us within the date mentioned in our Clearance Directive. Penalty will be imposed if you delay your payment. If you fail to withhold and do not give valid reasons for your failure, you may be held liable for the tax that is owed by your employee.
You should make payment as per the first Directive to avoid penalty being imposed.
If you have filed additional/amended Form IR21 and the letter is for the original Form IR21, please do not release the money until you receive another Clearance Directive telling you to Pay Tax or Release Monies to the employee.