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-Resident | Filing and Payment Due Date | Date Payer e-Filed and Paid WHT | WHT Amount | 5% Penalty |
|---|
| 02-May-19 | 15-Jul-19 | 31-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-Resident | Filing and Payment Due Date | Date Payer e-Filed and Paid WHT | WHT Amount | 5% Penalty | Additional 1% Penalty |
|---|
| 28-Jun-18 | 15-Aug-18 | 10-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-Resident | Filing and Payment Due Date | Date Payer e-Filed and Paid WHT | WHT Amount | 5% Penalty | Additional 1% Penalty |
|---|
| 5-Jan-16 | 15-Mar-16 | 10-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.
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 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 :
- This is your first
appeal or you have filed and paid on time in the last two years; and
- You have paid the
overdue tax in full; and
- 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.