Consequences for late payment or non-payment of taxes
IRAS may take the following actions if you fail to pay by the due date:
- Impose late payment penalties
- Appoint agents like your bank, tenant or lawyer (handling the sale of any of your property) to recover the amount owed
- For sole proprietors or partners, we can issue a Travel Restriction Order (TRO) to stop you from leaving Singapore
- Take legal action
Late payment penalty
A 5% late payment penalty will be imposed if payment is not received by the due date.
If you have filed an objection and are awaiting the outcome, you still must pay the tax assessed as shown in the Directive by the payment due date. Excess payment will be refunded to you/your employee if the Directive is revised.
Example 1: Penalty imposed for late payment
Date of the Directive To Pay Tax was 4 Jan 2021 and the Directive amount was $5,000. 5% penalty of $250 (i.e. 5% x $5,000) was added when the tax is not paid by 14 Jan 2021.
|Date of Directive||Directive Due Date||Tax Payable||5% Penalty Imposed|
|4 Jan 2021||14 Jan 2021||$5,000||$250|
Additional penalties of 1% per month may be imposed if the tax remains unpaid 1 month after the Directive date. The 1% additional penalty will be imposed for each completed month that the tax remains unpaid, up to a maximum of 12% of the unpaid tax.
Example 2: Penalty imposed for continued late payment
An employer sought tax clearance and received a Directive dated 5 Feb 2021 to pay the tax amount of $5,000 but did not make payment by the due date of 15 Feb 2021. Subsequently, he received a late payment penalty notice with 5% penalty added to the overdue tax.
The employer eventually made payment on 20 Apr 2021. However, as the payment was overdue by more than 1 month from the Directive date, 1% additional penalty was imposed on the first completed month thereafter.
The total penalty imposed was $300 (5% penalty x $5,000 + 1% additional penalty x $5,000).
|Directive date||Payment due date||Payment date||5% penalty imposed||Additional 1% penalty imposed|
|5 Feb 2021||15 Feb 2021||20 Apr 2021|
($5,000 x 5%)
($5,000 x 1% x 1 month)
Appealing for waiver of late payment penalty
You can appeal for a waiver on the late payment penalty via mytax.iras.gov.sg > myTax mail.
Appeals will only be considered if:
- You have paid the overdue amount in full, by the due date as stated in the late payment penalty notice; and
- No waiver has been granted in the past 2 calendar years or you have paid on time for the past 2 years.
Appointment of agents
If the tax remains unpaid, IRAS may appoint agents like your bank, tenant, lawyer or other 3rd parties with money due to you to recover the taxes owing.
When your bank is appointed as agent, you will experience inconvenience in using your bank accounts (e.g. being unable to access your bank accounts) until you have fully paid the tax.
Requests made for release of your bank as agent after 12pm on weekdays will only be processed on the next working day while requests cannot be processed on Saturdays, Sundays and Public Holidays.
Agents will be released from the appointment only after the tax and penalties have been paid in full.
If a Travel Restriction Order (TRO) is issued, you cannot travel out of Singapore until you pay the tax in full.
View and retrieve the Notification for Release of TRO via mytax.iras.gov.sg 2 working days after your payment has been received to facilitate your travel at the immigration checkpoints when you leave Singapore. The notification will also be mailed to you within 10 days.
For non-NRIC holders, please note that it is your responsibility to ensure that you have a valid pass to remain in Singapore. Please approach the Immigration & Checkpoints Authority (ICA) to extend your stay in Singapore if you require more time to resolve your tax matters with IRAS. It is an offence to overstay in Singapore.
Please quote the 14-digit payment slip number (enclosed with the Directive) when making payment for the Directive using the preferred payment modes. GIRO payment mode is not applicable for payment of the Directive amount.
When do I need to pay the amount as stated in your directive? Is there a grace period given?
Payment must be made by the due date stated in the Directive. If payment is not received by the due date, a 5% late payment penalty will be imposed. Chat with us if you would like to request an extension of time to pay.
I did not withhold monies due to my employee. Why did I still receive a Directive to Pay tax holding me liable for my employee’s tax?
Employers of non-Singapore Citizen employees are required to withhold all monies due to the employee for tax clearance, when the employee ceases employment or plans to leave Singapore for more than 3 months. Please refer to Tax Clearance for Foreign & SPR Employees (IR21) for more information.
If you did not withhold monies due to your employee and do not have valid reasons for your failure to withhold monies, you may be held liable for the tax that is owed by your employee.
I have filed both original and amended/additional Form IR21. I have received Directive To Pay Tax for the original Form IR21. Should I proceed to pay first or wait for the second directive?
You should make payment as per the first Directive to avoid any late payment penalty.