Late Payment or Non-Payment of Taxes

Most clubs/associations pay taxes on time. There are penalties if tax is not paid on time.

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 ImposedAdditional 1% Penalty Imposed 
      8 Jul 201915 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:  

    1. The overdue tax has been paid in full, by the due date as stated in the late payment penalty notice; and 

    2. 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:   

    • Appointing agents like the taxpayer’s bank, tenant or lawyer to pay the moneys to IRAS; and/or

    • Taking legal action.

    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.