If you have failed to pay or paid late

• If you have failed to pay or paid late 
• Am I still responsible for my business' tax matters if I have appointed a tax agent 
• What should I do if I receive a Demand Note 
• When is the 5% penalty imposed 
• What should I do when I have difficulties paying 
• Can I appeal to waive the penalty  
• What may happen if the tax and penalty is not paid by the Demand Note due date 
• What should I do to get the bank appointment released 
• What should I do if I am stopped from leaving Singapore 
• When will a 2% additional penalty be imposed 
• How to check the business tax balance  
• How to pay 

If you have failed to pay or paid late

While the majority of taxpayers file their taxes on time, without any enforcement action, each year, a minority fails to do so. Those who have failed to comply with their filing obligation will be penalised.

GST-registered businesses are required to pay the GST one month after the end of the accounting period covered by the return. If the tax is not paid or is paid late, the following penalties will be imposed:

• 5% penalty
• 2% additional penalty

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Am I still responsible for my business' tax matters if I have appointed a tax agent

If you engage the services of a tax agent to deal with your business’ tax matters, you are still responsible and liable for the filing and payment issues in the event that the agent failed to fulfil his responsibilities.

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What should I do if I receive a Demand Note

You should pay the tax with the 5% penalty by the due date stated in the Demand Note. Otherwise, further penalties may be imposed and recovery actions will be taken.

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When is the 5% penalty imposed

• If you have e-Filed your business’ GST F5/F8 return late, the 5% penalty will be imposed on the tax declared.
• If you have NOT e-Filed your business’ GST F5/F8 Return by the due date, the 5% penalty will be imposed on the estimated tax in your Notice of Assessment. Subsequently, if the tax declared when you e-File is higher than the estimated tax, a further 5% penalty will be imposed on the additional GST declared.
• If you have submitted a GST F7 Return after 1 year from the original due date of the F5, and it resulted in additional tax payable, a 5% penalty will be imposed on the additional tax declared in the F7.

Example 1:

Business X has not submitted the GST F5/F8 Return and payment for the accounting period ending 30 Sep 12 by 31 Oct 12. Assuming that the estimated GST amount is $3,000, a late payment penalty of $150 (i.e. 5% x $3,000) is imposed.

On 10 Nov 12, Business X declared its actual GST liability of $1,300. The GST and the late payment penalty will be revised to $1,300 and $65 (5% penalty on $1,300) respectively.

Example 2:

Business Y has not submitted the GST F5/F8 Return and payment for the accounting period ending 30 Sep 12 by 31 Oct 12. Assuming that the estimated GST amount is $3,000, a late payment penalty of $150 (i.e. 5% x $3,000) is imposed.

On 10 Nov 12, Business Y declared its actual GST liability of $5,000. The GST and the late payment penalty will be revised to $5,000 and $250 (5% penalty on $5,000) respectively.

Example 3:

Business Z has not submitted the GST F5/F8 Return and payment for the accounting period ending 30 Sep 12 by 31 Oct 12. Assuming that the estimated GST amount is $3,000, a late payment penalty of $150 (i.e. 5% x $3,000) will be imposed.

On 10 Nov 12, Business Z declared its actual GST liability of $0. Both the GST and the late payment penalty will be revised to $0.

Example 4:

Business W submitted the GST F7 Return for the accounting period ending 31 Mar 10 on 31 Oct 12. Assuming that the additional GST payable is $3,000, a late payment penalty of $150 (i.e. 5% x $3,000) will be imposed as F7 is submitted after more than a year.

Payment has to be issued immediately after submitting F7 to avoid recovery actions.

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What should I do when I have difficulties paying

Businesses are granted the rights to charge and collect GST from the consumers on behalf of IRAS. Therefore, GST collected has to be paid in full. However, if your business cannot pay the GST in full you may call us on (65) 6356 7012 to request paying by instalments. We will review your business’ financial situation.

Please get ready the following documents to support your claims:

• Latest bank statements;
• List of debtors; and
• Any other documents to prove the company’s financial position.

Please provide us with the necessary information and documents within the timeframe given. Otherwise, further enforcement recovery actions will be taken.

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Can I appeal to waive the penalty

Generally, penalties will not be waived. 

However, IRAS may consider your appeal if your business fulfils the following conditions:

• F5/F8 has been submitted;
• The full outstanding tax has been paid;
• Your business has filed and paid on time for the past two years, and
• Measures are taken to ensure that non/late payment will not happen again, such as signing up for GIRO. Businesses which sign up for GIRO for future payments will be considered more favourably in their appeals. 

In addition to the above, we recognize that there may be events beyond your business’s control which resulted in late payment. If documentary proof is provided, we may be prepared to waive the penalty, such as in the following circumstances:

You may call us on 6356 7012 to appeal for waiver.

You may log in to myTaxPortal under “View Accounts Summary” to check if penalty has been waived.

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What may happen if the tax and penalty is not paid by the Demand Note due date

We may, without prior notice, recover the outstanding tax by:

• Appointing your business’ bank, tenant, lawyer, etc. as agent to pay us;
• Stopping you, the business owner (of a sole-proprietorship/partnership), from leaving Singapore;
• Imposing an additional penalty of 2% on the outstanding tax for each completed month that the tax remains unpaid; and
• Taking legal action.

Please note that appointment of your business’ bank, tenant, lawyer, etc. as agent will happen before additional 2% penalty is imposed.

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What should I do to get the bank appointment released

The bank can be released as agent only after the outstanding tax and penalty are paid. Therefore, this can be either:

• After the bank remits the outstanding amount to IRAS. The release may take a few days to process, therefore, to expedite the release, please call (65) 6356 7012; or
• After your business has arranged to pay the tax and penalty directly to IRAS. Please call us at (65) 6356 7012 to inform, so that the appointment can be released

Please note that banks do not process requests for release on Saturdays, Sundays and Public Holidays.

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What should I do if I am stopped from leaving Singapore

You have to pay your business’ outstanding tax and penalties before travelling. You can only pay in the form of cash/cashier's order if you are already at the Customs checkpoint. You will not be allowed to leave Singapore until payment is received.

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When will a 2% additional penalty be imposed

An additional 2% penalty may be imposed 60 days from the date of the demand note if the tax is still not paid.

The 2% penalty is calculated immediately after the due date of each accounting period and is imposed for each completed month that the tax remains outstanding. The total additional penalty will not exceed 50% of tax outstanding.

Example:

Business K filed a F5 on 31 Jul 12 and declared a tax payable of $10,000. Business received a Demand Note dated 5 Aug 12. The payment is only received on 15 Dec 12.

In this instance, the payment was overdue by more than 4 completed months i.e. Aug, Sep, Oct and Nov. Hence, the total penalty imposed is $1,300 (5% penalty of $500 and additional 2% penalties of $800).

Please note that appointment of agents would have happened before 2% additional penalty is imposed.

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How to check the business tax balance

You may log in to myTaxPortal under “View Accounts Summary” to check your current balance.

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How to pay

Pay by GIRO to enjoy the following benefit:

• Extra 15 days’ cash flow as the deduction date is 15 days after the filing due date. e.g. for accounting period ending 30 Sep 2012, the deduction will be made on 15 Nov 2012.
• Avoid the cost and inconvenience associated with payment by cheque and cash.
• Faster refunds as they will be credited directly to the same GIRO account, which is faster compared to cheque. However, if you are using another party’s bank account for GIRO matters, refunds will be made through cheques.

• Cash / NETS / Cheque at any Singapore Post outlet (with the payment voucher) 
• NETS / acceptable cards at AXS Machines and S.A.M. Please enter the payment voucher number
• Internet Banking. Please enter the payment voucher number as the tax reference number
• Singapore cheque crossed and made payable to the "Comptroller of Goods and Service Tax ", with the business’ name and registration number written on the reverse side of the cheque. Please send in with the payment voucher
• Telegraphic Transfer. This is not encouraged as the receipting of payment may take up to 21 days.

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