Late Payment Penalty

Payer must e-file and pay the withholding tax to IRAS by the 15th of the second month from the date of payment to the non-resident.

If the withholding tax payment is not received by the due date, a 5% penalty and subsequently, an additional 1% penalty (not exceeding 15% of the tax outstanding) can will be imposed for each completed month that the tax remains unpaid.

 

Late Payment Penalty Letter

Payer will be informed of the 5% penalty via a late payment penalty letter. Payment must be made by the due date stated on the late payment penalty letter to avoid further enforcement actions.

Example on Royalty Payment Due and Payable to Non-Resident

Payer X made royalty payment of $10,000 (Gross) to Non-resident A on 02 May 2019. However, the withholding tax payment of $1,000 was only made to IRAS on 31 Jul 2019. Hence, the late payment penalty is computed below. 

 

Date of Payment to Non-ResidentFiling and Payment Due DateDate Payer e-Filed and Paid WHTWHT Amount5% Penalty
02-May-1915-Jul-1931-Jul-19$ 1,000$ 50

  

GIRO Cancellation or Termination

 If the deduction through GIRO is unsuccessful due to reasons such as insufficient funds in the bank account, or the deduction amount is higher than the limit set, etc., IRAS will cancel the GIRO plan.

A late payment penalty letter and a GIRO cancellation letter will be issued to inform Payer that the GIRO plan has been cancelled.

Imposition of 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 for each completed month (subject to maximum of 15 months i.e. 15 %) that the tax remains unpaid.

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

Date of Payment to Non-ResidentFiling and Payment Due Date

Date Payer e-Filed and Paid WHT 

WHT Amount5% PenaltyAdditional 1% Penalty
28-Jun-1815-Aug-1810-Mar-19 $ 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-1615-Mar-1610-Mar-19 $ 7,000 $ 350

$ 1,050 

($ 7,000 x 1% x 15 completed months*)

 *Capped at max 15 months

Further Enforcement Actions

If the tax continues to remain unpaid, other actions to recover the taxes may include:

  • Appointing agents like your bank, employer, tenant or lawyer to pay the moneys to IRAS;
  • Issuing a travel restriction order (TRO) to stop you (applicable to sole-proprietors and/or partners) from leaving Singapore; 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 month that the tax remains unpaid.

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.

Travel Restrictions

If a Travel Restriction Order (TRO) is issued on an individual, he will be stopped from leaving Singapore at the Immigration exit checkpoints.

The TRO will be withdrawn upon full payment of the tax due. To do so, the individual is required to produce the proof of payment to the Immigration & Checkpoints Authority (ICA) officer.

Please note that IRAS is unable to withdraw the TRO on weekends and Public Holidays.

Appeal for Late Payment Penalty Waiver

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.

All applications for waiver of late payment penalty are to be submitted online via Request for S45 Withholding Tax Penalty Waiver

We will process your request within 15 working days.

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