Requirement to seek tax clearance
Employers are required to seek Tax Clearance by filing Form IR21 or notifying IRAS at least 1 month before the non-citizen employee ceases employment in Singapore or plans to leave Singapore for more than 3 months.
Consequences for late or non-filing of tax return
Failure by the employer to file Form IR21 by the due date is an offence.
IRAS may take the following enforcement actions if employers fail to file Form IR21 by the due date:
- Offer to compound the offence
- Summon the employer (including the sole-proprietor, partner and director) to Court.
Offer of composition
Instead of taking prosecution actions, IRAS may allow the employer to avoid prosecution by paying a composition amount.
A composition amount not exceeding $5,000 may be offered depending on the employer's past compliance records. A notice will be sent to inform the employer of the composition amount.
The employer must pay the composition amount and file Form IR21 to avoid prosecution. IRAS will prosecute the employer if the employer does not accept the offer to compound the offence.
Paying the composition amount
Quote the payment slip number when paying the composition amount using the preferred payment modes. GIRO payment is not allowed.
The payment will be processed after 3 working days.
Appealing for waiver of composition amount
Chat with us if you would like to appeal for a waiver of the composition amount.
Appeals will only be considered if:
- It is your first request; and/or
- Tax clearance is not required for the employee e.g. employee’s physical presence in Singapore is less than 60 days; and/or
- You have filed tax clearance under another company in the same Group for the same employment period of the employee
A summons may be issued to the employer to attend Court on a specified date if IRAS does not receive:
- Form IR21
- Payment of the composition amount before the due date
If the employer does not wish to attend Court, the employer must do all of the following actions at least 1 week before the Court date:
- File Form IR21
- Pay the composition amount
Postponement of Court hearing
If the employer needs more time to file and/or pay the composition amount, the employer should attend Court on the Court date to appeal for a postponement.
Failure to attend Court will result in further legal actions being taken against the employer (for example, a warrant of arrest may be issued).
In Court, if convicted of the offence, the employer may face a fine not exceeding $5,000.
The employer must still file the outstanding documents. Otherwise, further legal actions may be taken.
Filing Form IR21
Employers may choose to: