Late Payment or Non-Payment of Taxes

Most taxpayers pay taxes on time. There are penalties if tax is not paid on time.

Late Payment Penalty

Legal Personal Representatives (Administrator/Executor) of an estate of a deceased or Trustees have one month from the date of the Notice of Assessment (NOA) to pay their tax.

A Legal Personal Representative (Administrator/Executor) or a Trustee 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 will be refunded to the Legal Personal Representative (Administrator/Executor), Trustee or Estate.

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 unpaid).

Late Payment Penalty Notice

Legal Personal Representatives (Administrator/Executor) or Trustees 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

Trustee/LPR received a Notice of Assessment (NOA) dated 18 Oct 2019. The due date of the tax payable of $10,000 was 18 Nov 2019 (one month from the date of NOA). As the Trustee/LPR did not pay the tax before 18 Nov 2019, a 5% penalty of $500 (i.e. 5% of $10,000) was imposed.  

Date of NOATax Due DateTax Payable5% Penalty Imposed
18 0ct 201918 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

Trustee/LPR 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 Trustee/LPR 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). Trustee/LPR 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: 

  1. You have paid the overdue tax 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 on +65 6351 2833 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 taxes 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.