If you have failed to pay or paid late

• If you have failed to pay or paid late 
• I have a tax agent. Am I still responsible 
• Demand Note – What should I do 
• 5% penalty – When is it imposed 
• Business cannot pay – What should I do 
• Penalty – How to appeal 
• Demand Note’s due date is over – What will happen 
• Bank is appointed – What should I do 
• I am stopped from leaving Singapore - What should I do 
• 2% penalty – When is it imposed 
• I did not provide Security Deposit – What will happen 
• Accounts Summary – How to check 
• How to pay 

If you have failed to pay or paid late

While the majority of taxpayers pay their taxes on time, each year, a minority fails to do so. To be fair to the majority who comply without any enforcement action, we have to penalise those who repeatedly fail to comply with their payment obligations.

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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I have a tax agent. Am I still responsible

You will be liable for the business’ filing and payment matters if your tax agent fails to fulfil his responsibilities.

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Demand Note - What should I do

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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5% Penalty – When is it imposed

• If you have e-Filed your business’ GST F5/F8 return, 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 31 Dec 10 by 31 Jan 11. 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 Feb 11, 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 31 Dec 10 by 31 Jan 11. 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 Feb 11, 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 31 Dec 10 by 31 Jan 11. 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 Feb 11, Business Z declared its actual GST liability of $0. Both the GST and the late payment penalty will be revised to $0.

Business W submitted the GST F7 Return for the accounting period ending 31 Mar 09 on 31 Oct 10. 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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Business cannot pay - What should I do

Businesses are granted the rights to charge and collect GST from the consumers on behalf of IRAS. Therefore, generally we do not allow businesses to pay GST by instalments. However, if your business cannot pay the GST in full for various reasons, you may call us on 6356 7012 or email to enfgst@iras.gov.sg to request for assistance and 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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Penalty – How to appeal

Generally, penalties will not be waived. 

However, IRAS may be prepared to consider your business’ 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 factors 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 or email us at enfgst@iras.gov.sg 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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Demand Note’s due date is over – What will happen

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, from leaving Singapore;
• Imposing an additional penalty of 2% on the outstanding tax for each completed month that the tax remains unpaid;
• Imposing a Security Deposit; 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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Bank is appointed – What should I do

The 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. We will release the bank as agent, which may take a few days to process. To expedite the release, please call us at 6356 7012; or
• After your business has arranged to pay the tax and penalty directly to IRAS. Please call us at 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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I am stopped from leaving Singapore – What should I do

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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2% Penalty – When is it imposed

An additional 2% penalty may be imposed:

• 60 days from the date of the Demand Note, and
• Calculated immediately after the due date of each accounting period, and
• For every completed month that the tax remains outstanding, and
• Total additional penalty shall not exceed 50% of tax outstanding.

Example:
You filed a F5 on 31 Aug 10 and declared a tax payable of $10,000. You received a Demand Note dated 4 Sep 10. The payment was only received on 15 Jan 11.

In this instance, the payment was overdue by more than 4 completed months i.e. Sep, Oct, Nov and Dec. Hence, there was a 5% penalty of $500 and a 2% additional penalty of $800 imposed. Therefore, the total penalty imposed was $1,300.

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

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I did not provide Security Deposit as requested – What will happen

It is an offence if you do not provide security deposit if the Comptroller of GST requires it. On conviction, you will be liable to a fine not exceeding $5,000.

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Accounts summary – How to check

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

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How to pay

Please pay the tax and penalties via one of the following modes:

• By cash / NETS at any Singapore Post outlet (with the payment voucher or payment voucher number seen on acknowledgement page after filing)
• By NETS / acceptable cards at AXS Machines and S.A.M. (with the payment voucher or payment voucher number seen on acknowledgement page after filing.
• By Internet Banking (payment voucher number is the reference number)
• By Singapore cheque (crossed and made payable to the "Comptroller of Goods & Services Tax", with your business’ full name, payment voucher number and Tax Reference No written on the reverse side of the cheque

You may want to consider paying your business’ GST by GIRO to benefit from the following:

• Funds stay in your business’ account longer. The deduction date is 15 days after the filing due date. e.g. for accounting period ending 31 Mar 2010, the deduction will be made on 15 May 2010.
• Your business avoids the cost and inconvenience associated with payment by cheque and cash.
• Any refund 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.
• It is secured as authorization of bank account owner is required before the bank account can be used for payment of taxes.