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:

  1. 5% late payment penalty
  2. 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:

  1. You have paid the overdue tax in full, by the due date as stated in the late payment penalty letter; and
  2. 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.

 

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