Late Payment or Non-Payment of Taxes

Penalties are imposed on employers that fail to pay the the tax stated in the Directive To Pay Tax Clearance Directive on time.

5% Late Payment Penalty

Employers 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.

To make payment, see Payment Options.

Date of the Directive To Pay Tax is 2 Jan 2014 and the Directive amount is $5,000. If we do not receive any payment from you by 12 Jan 2014, a late payment penalty of $250 (i.e. 5% x $5,000) will be imposed.

Date of Directive2-Jan-14
Due Date of Directive12-Jan-14
Demand Note Date13-Jan-14
Amount on Directive$5,000
5% Late Payment Penalty$250
Total Amount Payable$5,250
Due Date of Demand Note13 Feb 2014

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%.

To make payment, see Payment Options .

The Demand Note is due on 13 Feb 2014 and the Directive amount is $5,000.

The 1% additional penalty of $50 (i.e. 1% x $5,000) was imposed on 14 Apr 2014 as the Directive amount and penalty were still unpaid.

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 Notice13-Feb-14

 

Amount on Directive$5,000

 

5% Late Payment Penalty$250

 

1% Late Payment Penalty$50

 

Total Amount Payable by 14 Apr 2014$5,300

 

Other Actions to Recover Unpaid Taxes

IRAS may, without prior notice, recover the unpaid amount in the directive and penalties by:

  1. Appointing the employer's bank, tenant or any other third parties to pay the money to IRAS; or
  2. Taking legal action.
  • When do I need to pay the amount as stated in your directive? Is there a grace period given?

    You are required to pay within the date mentioned in our Clearance Directive. A penalty will be imposed on late payments.

    If you fail to withhold and do not give valid reasons for your failure to withhold, you may be held liable for the tax that is owed by your employee.

  • I have filed both original and amended/additional IR21. I have received Directive To Pay Tax for the original IR21. Should I proceed to pay first or wait for the second directive?

    You should make payment as per the first Directive to avoid penalty being imposed.

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