Late Payment Penalty
Clubs/Associations
have one month from the date of the Notice of Assessment (NOA) to
pay their tax.
A
club/association is required to pay the tax as shown in the NOA even if it has
filed an objection and is awaiting the outcome. If the assessment is
subsequently revised, any excess payment would be refunded to the
club/association.
If payment is not
received by the due date, a 5% late penalty and subsequently an additional 1%
penalty will be imposed for every completed month that the tax remains unpaid (up to a maximum of
12% of the tax unpaid).
Late Payment Penalty Notice
Clubs/associations will be informed of the
5% penalty via a late payment penalty notice. Payment must be made by the due
date stated on the letter to avoid further enforcement actions.
Example
1: Calculation of 5% Late Payment Penalty
A Club/Association received a
Notice of Assessment (NOA) dated 18 Oct 2019. The due date of the tax payable
of $10,000 is 18 Nov 2019 (one month from the date of NOA). As the Club/Association
did not pay the tax before 18 Nov 2019, a 5% penalty of $500 (i.e. 5% x
$10,000) was imposed.
| Date of NOA | Tax Due Date | Tax Payable | 5% Penalty Imposed |
|---|
| 18 Oct 2019 | 18 Nov 2019 | $10,000 | $500 |
Imposition of Additional Penalty
Additional penalties of 1% per month may be
imposed if the tax remains unpaid 60 days after the imposition of the 5%
penalty. The 1% penalty will be imposed for each completed month that the tax
remains unpaid, up to a maximum of 12% (excluding the 5% late payment penalty).
Example 2: 1% Additional Penalty
The Club/Association did not pay the tax payable
of $10,000 before the due date on the NOA, and received a late payment
penalty notice dated 8 Jun 2019 informing the Club/Association of the
overdue tax and the 5% late penalty. The due date for payment of tax and
penalty (i.e. $10,500) on the notice was 8 Jul 2019 (one month from the
date of the late payment penalty notice). The Club/Association eventually paid
the tax and penalties on 15 Sep 2019.
The payment
was overdue by more than two months after the late payment penalty notice due
date i.e. Aug and Sep. The total penalty imposed was $700 (i.e. 5% penalty x
$10,000 plus 1% additional penalty x $10,000 x 2 months).
Late Payment Penalty Notice Due Date
| Payment Date | 5% Penalty Imposed | Additional 1% Penalty Imposed |
|---|
|
8 Jul 2019 | 15 Sep 2019 | $500
($10,000 X 5%) |
$200
($10,000 X 1% X 2
months) |
Appeal for Late Payment Penalty Waiver
The
appeal will only be considered if the following conditions are met:
The
overdue tax has been paid in full, by the due date as stated in the late
payment penalty notice; and
No
late payment penalty waivers have been granted in the past 2 years.
Please call us at +65
6351 2775 or email us at enfmisctax@iras.gov.sg to appeal for waiver.
Further Enforcement Actions
If
the tax continues to be unpaid, other actions to recover the tax may
include:
In addition to the recovery actions, IRAS may concurrently impose an additional
1% penalty on the overdue tax for each completed month that the tax remains
unpaid, up to a maximum of 12% of the tax overdue.
Releasing Appointed Agents
Agents will only be released from the
appointment after the tax and penalties have been paid.
Note:
For banks appointed as agents, requests for release cannot be processed on
Saturdays, Sundays and Public Holidays. Any request for release of bank after
2pm on weekdays can only be processed on the next working day.