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 2016. The filing and payment due date is 15 Oct 2016 but the withholding tax payment of $1,000 was paid to IRAS on 20 Oct 2016. 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.

Examples on Imposition of Additional 1% Penalty

 Key Dates Penalty Period Penalty
Example 1 :

Tax Deducted: $7,000

Date of payment:

28 Jun 2016

Due Date:

15 Aug 2016

Date e-Filed and paid:

20 Mar 2017

 

 

Oct 16 – Mar 17 (6 completed months)

 

 

$770

($7,000 x 5% +6%)

Example 2 :

Tax Deducted: $10,000

Date of payment:

02 Jan 2015

Due Date:

15 Mar 2015

Date e-Filed and paid:

20 Jun 2016

 

 

May 15 – Jun 16 (14 completed months)

 

 

$1,900

($10,000 x 5% +14%)

 

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

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 Instruction will be withdrawn after you have paid the tax outstanding; or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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