Late Penalty Fees

When payment is not received by the due date, a 5% penalty and subsequently, an additional 1% penalty can be imposed on the unpaid tax.

Penalties are imposed to discourage late payment.

5% Penalty

If the withholding tax payment is not submitted and paid by the due date, a Demand Note will be issued to inform you of the 5% penalty.

You are advised to pay the withholding tax and penalty by the due date stated in the demand note. If not, enforcements action(s) will be taken to recover the tax and penalties.

Payer X made royalty payment of $10,000 (Gross) to Non-resident A on 02 Aug 2017. The filing and payment due date is 15 Oct 2017 but the withholding tax payment of $1,000 was paid to IRAS on 21 Oct 2017. A 5% penalty of $50 will be imposed.

1% Additional Penalty

If we do not receive the withholding tax payment within 30 days from the due date, an additional penalty of 1% will be imposed on the withholding tax for each completed month (subject to maximum of 15 months i.e. 15 %) that the tax remains outstanding.

Example 1 : Imposition of Additional 1% Penalty for Less Than 15 Completed Months

Date of Payment to Non-ResidentFiling and Payment Due DateDate Payer e-Filed and Paid WHTWHT Amount5% PenaltyAdditional 1% Penalty
 28-Jun-17 15-Aug-1721-Mar-18 $7,000 $350

$350  

($7,000 x 1% x 5 completed months

 

Example 2 : Imposition of Additional 1% Penalty for More Than 15 Completed Months

Date of Payment to Non-ResidentFiling and Payment Due DateDate Payer e-Filed and Paid WHTWHT Amount5% Penalty Additional 1% Penalty
 5-Jan-15 15-Mar-15 20-Feb-18    $2,000 $100

$300

($2,000 x 1% x 15 completed months*)

 *Capped at max 15 months

Informing IRAS Voluntarily

The IRAS Voluntary Disclosure Programme (VDP) aims to encourage taxpayers that have made errors in their withholding tax submission to voluntarily come forward to correct their errors. IRAS is prepared to reduce penalties for voluntary disclosures which meet the qualifying conditions.

To know the qualifying conditions for IRAS’ VDP, please refer to the e-Tax Guide IRAS Voluntary Disclosure Program

Appeal for Waiver of Late Payment Penalty

Generally, penalties will not be waived unless there are exceptional circumstances.

IRAS may consider your appeal for a waiver of the late payment penalty if :

  1. This is your first appeal or you have filed and paid on time in the last two years; and
  2. You have paid the overdue tax in full; and
  3. You undertake to pay your tax by the due date in future. This includes taking measures to ensure that late payment will not happen again, such as signing up for GIRO.

Please complete and email the Penalty Waiver Request Form with the supporting documents to enfs45@iras.gov.sg.

We will process your request within 14 working days.

Actions that Can be Taken To Recover Tax Outstanding from Your Bank, Tenant & Any Other Third Parties

If the withholding tax/penalty is not paid on time, we will take the following recovery action(s):

  1. Instruct your bank, tenant or any third parties to pay to the Comptroller if they hold money for you, or due to you. Instruction will be withdrawn after you have paid the tax outstanding; or
  2. Legal actions will be taken for the tax outstanding.

Avoiding Late Payment Penalty

  1. e-File the withholding tax and pay the withholding tax amount to IRAS before the due date
      
  • How do I appeal for the waiver of penalty?

    Write to us stating the grounds of appeal and furnish with supporting documents to substantiate your appeal.

    Pay all outstanding tax and penalties to avoid enforcement actions while your appeal is under review.

  • What if I did not withhold tax?

    Withholding tax is your responsibility. We are empowered to recover the tax from you by:

    1. Appointing agents such as banks, tenants, among others
    2. Initiating legal actions
  • What if I fail to inform IRAS of the tax withheld?

    If tax had been withheld but not paid to IRAS, an offence would have been committed.

    On conviction, you will have to pay:

    1. A penalty equals to three times the amount of withholding tax; and
    2. A fine not exceeding $10,000; or
    3. Imprisonment for a term not exceeding three years; or
    4. Both

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