Late Payment or Non-Payment of Taxes
Most taxpayers are responsible and pay their tax 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% penalty and subsequently an additional 1%
penalty will be imposed for every completed month (up to a maximum of 12% of
the tax outstanding).
Penalties for Late Payment
IRAS takes action against taxpayers that do not pay their taxes on time or fail to pay altogether. The following penalties will be imposed:
- 5% late payment penalty
- Additional 1% penalty when duty remains unpaid 60 days from the date of the Demand Note.
Demand Note
When the 5% penalty has been imposed, a Demand Note will be issued showing the unpaid tax and penalty.
Payment must be made within 30 days from the date of Demand Note. If payment is not received, further enforcement actions may be taken.
Taxpayer received a Notice of Assessment (NOA) dated 23 Dec 2015. The due date for payment is 23 Jan 2016 (one month from the date of NOA).
As the tax payable is $10,000 and payment was only received on 31 Jan 2016, a 5% penalty of $500 is imposed.
| Notice of Assessment Date | 23 Dec 2015 |
|---|
| Notice of Assessment Due Date | 23 Jan 2016 |
|---|
| Payment Date | 31 Jan 2016 |
|---|
| Tax Amount | $10,000 |
|---|
| 5% Penalty | $500 |
|---|
Additional 1% Penalty
The 1% additional penalty may be imposed 60 days after the 5% penalty if the tax is still not paid. The 1% penalty is imposed for each month the tax remains unpaid. The total additional penalty will not exceed 12%.
Taxpayer received a Demand Note dated 4 Feb 2015. The due date for payment was on 4 Mar 2015 (one month from the date of Demand Note). The tax payable is $10,000 and the payment was only received on 15 Jun 2015.
In this instance, the payment was overdue by more than two completed months. Hence, there is a 5% penalty of $500 and a 1% additional penalty of $200. Therefore, the total penalty imposed is $700.
| Demand Note Date | 4 Feb 2015 |
|---|
| Demand Note Due Date | 4 Mar 2015 |
|---|
| Payment Date | 15 Jun 2016 |
|---|
| Tax Amount | $10,000 |
|---|
| 5% Penalty | $500 |
|---|
| 1% Additional Penalty | $200 |
|---|
Appeal for Late Payment Penalty
Appeals have to be made online via myTax Portal and will only be considered
if the following conditions are met:
- You have paid the overdue tax in full, by the due date as
stated in the late payment penalty letter; and
- a. This is your first appeal; or
b. You have filed and paid on time for the past two years.
Releasing Appointed Agents
Agents
will only be released from the appointment after the tax and penalties have
been paid, or when payment has been arranged with IRAS.
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.