Why and what are the penalties?
Penalties are imposed to encourage taxpayers to comply voluntarily with their tax obligations, such as paying the tax on time. Taxpayers are given 30 days from the date of the Notice of Assessment (NOA) to pay the tax. When no payment is received, a 5% penalty and subsequently a 1% additional penalty may be imposed on the outstanding tax.
A taxpayer whose GIRO instalment plan is cancelled will also have a 5% penalty imposed on the outstanding tax. The instalment plan may be cancelled due to insufficient funds in the bank account, or deduction amount is higher than the bank limit set by taxpayer, etc. In such instances, IRAS will send a letter to inform the taxpayer that the GIRO plan has been cancelled.
When the 5% penalty has been imposed, a Demand Note will be issued, showing the unpaid tax and penalty. Payment has to be made within 30 days.
Example:
Date of the Notice of Assessment is 31 May 2010 and the tax payable is $3,000.
The 5% penalty of $150 (i.e. 5% x $3,000) was imposed as the tax was not paid by 30 June 2010.
| Date of Notice of Assessment |
Notice of Assessment Due Date |
Tax Payable |
5% Penalty |
31 May 2010
|
30 Jun 2010
|
$3,000
|
$150
|
What should I do when I receive a Demand Note?
You should pay the tax and 5% penalty within 30 days from the Demand Note. Otherwise, further enforcement actions may be taken.
Why am I penalised for not paying the tax when I object to the tax?
Even if you object to the tax assessed, you still have to pay the tax as shown on the Notice of Assessment (NOA) by the payment due date.
In such instances, we would encourage you to pay by monthly GIRO instalments. If your objection is approved, the GIRO instalment amount would automatically be adjusted downwards. A new GIRO instalment plan would then be sent to you.
Please call (65) 6356 7012 or email enfiit@iras.gov.sg to inform us if you have signed up to pay your tax via GIRO only after receiving a Demand Note, so that we can withhold further enforcement actions.
What should I do when I have difficulties paying the tax and penalties?
You should call (65) 6356 7012 or email enfiit@iras.gov.sg before the payment due date for us to review your financial situation and discuss the best option for you to pay your tax. Documentary proof such as bank statements and payslips may be required to substantiate your claims.
My GIRO instalment plan was cancelled and penalty has been imposed. What should I do?
You have to pay the tax and penalty in full by the due date of the Demand Note or further enforcement actions may be taken.
If you wish to continue paying by GIRO instalments, you would have to call (65) 6356 7012 or email enfiit@iras.gov.sg to request. We will consider the following in reviewing your request:
- Whether you have paid on time in the past; and
- Your financial situation and ability to meet the monthly repayments.
Can I appeal to waive the penalties?
Generally, penalties will not be waived.
However, IRAS may be prepared to consider a partial or full waiver in the following situations:
- This is your first time paying tax or if you have been paying on time in the past; or
- You have valid reasons for paying late and you are able to substantiate these reasons with documentary evidence.
Please note that the following reasons are not acceptable:
- Too busy with work or business, so forgot about paying tax;
- Frequently travelling overseas, thus unable to check notices sent by IRAS; or
- Notices and bills are always missing and not received.
We wish to reiterate that it is the responsibility of every taxpayer to comply with their tax obligations, and to pay their taxes on time.
If you wish to appeal, please call (65) 6356 7012 or email enfiit@iras.gov.sg.
Subsequently, to confirm that the penalty has been waived, you may log in to myTaxPortal under “View Accounts Summary” to check.
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 bank, employer, tenant or lawyer as agent to pay the money to us;
Stopping you from leaving Singapore; and
Taking legal action.
What can I do to get my bank appointment released?
Your bank can be released as agent only after the outstanding tax and penalty are paid. Therefore, this can be either:
- After the bank pays the full amount to IRAS. The appointment of agent would be automatically released; or
- After you have arranged to pay the full amount to IRAS. If you do so, please call (65) 6356 7012 to inform us so that the appointment can be released as soon as possible.
Please note that banks do not process requests for release on Saturdays, Sundays and Public Holidays.
When will the 1% additional penalty be imposed?
The 1% additional penalty may be imposed 90 days from the date of the Demand Note if the tax is still not paid. The 1% penalty is imposed for each month that the tax remains unpaid. The total additional penalty will not exceed 12%.
Example:
Taxpayer has an outstanding tax of $3,000. As this was not settled, a Demand Note was issued on 31 May 2010. The 1% additional penalty of $30 (i.e. 1% x $3,000) was imposed on 30 Aug 2010 as the tax was still outstanding.
| Date of Demand Note |
Tax Payable |
5% Penalty |
1% Penalty |
Date Payment Received |
Total Amount Paid |
31 May 2010
|
$3,000
|
$150
|
$30
|
3 Sep 2010
|
$3,180
|
This penalty may be imposed up to a maximum of 12 months that the tax remains unpaid. Therefore, the maximum additional penalty that may be imposed will be $360 (i.e. $30 x 12 months).
How can I check my tax balance?
You may log in to myTaxPortal under “View Accounts Summary” to check your current balance.