What are the penalties
The company is required to pay the Corporate tax by the due dates. If the tax is not paid or is paid late, the following penalties will be imposed:
- 5% penalty
- 1% additional penalty
5% penalty
The company is given 1 month from the date of the Notice of Assessment (NOA) to pay the tax or make arrangements to pay. If the tax is not paid by the due date, a 5% penalty will be imposed on the tax outstanding. Subsequently, a Demand Note will be issued to the company to recover the unpaid tax and penalty.
The company is advised to pay the tax and penalty by the due date stated in the Demand Note. Otherwise, further enforcement action(s) will be taken.
Example:
The company received an NOA dated 23 Mar 09. The due date for payment was 23 Apr 09 (1 month from the date of NOA). As the tax payable is $10,000 and payment was only received on 27 Apr 09, a 5% penalty of $500 was imposed.
| Notice of Assessment Date |
Notice of Assessment Due Date |
Payment Date |
Tax amount |
5% Penalty |
| 23 Mar 09 |
23 Apr 09 |
27 Apr 09 |
$10,000 |
$500
|
1% additional penalty
The additional 1% penalty will be imposed if the company does not pay in full or make arrangements to pay within 60 days from the imposition of the 5% penalty. It will be imposed on the amount of tax outstanding for each completed month that the tax remains unpaid. The total additional penalty shall not exceed 12% of the tax outstanding.
Example:
The company received a Demand Note dated 4 May 09. The due date for payment was on 4 Jun 09 (1 month from the date of Demand Note ). The tax payable is $10,000 and payment was only received on 15 Sep 09.
In this instance, the payment was overdue by more than 2 completed months. Hence, there was a 5% penalty of $500 and a 2% additional penalty of $200 imposed. Therefore, the total penalty imposed was $700.
| Demand Note Date |
Demand Note Due Date |
Payment Date |
Tax amount |
5% Penalty |
1% Additional Penalty |
| 4 May 09 |
4 Jun 09 |
15 Sep 09 |
$10,000 |
$500 |
$200 |
Actions that can be taken to recover the tax outstanding from your bank, tenant and other third parties…
If the tax/penalty is not paid on time, we will take the following recovery actions:
- Instruct your company’s bank, tenant or any third parties to pay to the Comptroller if they hold money for the company, or due to the company. This includes the Ministries and the Statutory Boards, whom you have contracted to supply goods and/or services, when you are entitled to receive government payouts and grants, or whom you have deposits with under any scheme. Instruction will be withdrawn after the company has paid or made arrangements to pay the tax outstanding; or
- Bring the company to court for the tax outstanding.
How to avoid late payment penalty
- Make arrangements to pay the corporate tax before the NOA due date even though you object to the assessment.
- Ensure there are sufficient funds in your bank before the GIRO deduction date.
- Ensure all cheques sent to us are good for payment.
FAQs
You can appeal for waiver of penalty via the following mode:
You are required to state the grounds of appeal and furnish us with supporting document to substantiate your appeal. You have to pay the tax outstanding and penalties to avoid enforcement actions while your appeal is under review.
We may waive all or part of the penalty if the appeal is successful.
You can call us on +65 6356 7012 for a payment arrangement such as instalment plan for current year of assessment before the NOA due date.