Penalties and charges

INDIVIDUALS

What are the late filing penalties and charges?

If the taxpayer does not file his/her income tax return by 15 April (for paper returns) or 18 April (for e-filing), IRAS may take the following actions:

  • Issue an estimated Notice of Assessment (NOA) requiring the taxpayer to pay IRAS’ estimated tax amount within one month.
  • Issue an “Offer of Composition for Failure to File Return” requiring the taxpayer to file the outstanding documents immediately and pay the composition fee by the due date stated in the letter.
  • Summon the taxpayer to Court. Upon conviction, a fine of up to S$1,000 may be imposed and the taxpayer will still be required to file the outstanding documents to avoid further prosecution actions. If the taxpayer files the outstanding documents and pay the composition fee at least one week before the Court date, he/she will not be required to attend court on the assigned date.
  • Issue a Warrant of Arrest.
  • Take legal actions if the taxpayer does not file a tax return for two years or more. Upon conviction in Court, the taxpayer will have to pay a penalty equal to double the amount of tax that the IRAS may assess for that year of assessment, and a fine not exceeding S$1,000. If he/she cannot pay the penalty or fine to Court, he/she may be imprisoned for up to six months.

What are the late payment penalties and charges?

Taxpayers are given one month from the date of the Notice of Assessment (NOA) to pay the tax. Even if the taxpayer object to the tax assessed, the tax as shown on the NOA must still be paid by the payment due date. When no payment is received, a 5% penalty and subsequently a 1% additional penalty may be imposed on the outstanding tax.

A taxpayer whose GIRO instalment plan is cancelled will also have a 5% penalty imposed on the outstanding tax. The instalment plan may be cancelled due to insufficient funds in the bank account, or deduction amount is higher than the bank limit set by taxpayer, etc. In such instances, IRAS will send a letter to inform the taxpayer that the GIRO plan has been cancelled.

When the 5% penalty has been imposed, a Demand Note will be issued, showing the unpaid tax and penalty. Payment has to be made within one month to avoid further enforcement actions such as:

  • Appointing the taxpayer’s bank, employer, tenant or lawyer as agent to pay the outstanding money to IRAS;
  • Stop the taxpayer from leaving Singapore; and
  • Take legal action.

CORPORATES

What are the late filing penalties and charges?

If the income tax return and audited/unaudited accounts are not filed by 30 November (15 December for e-filing of Form C-S), IRAS may take the following actions:

  • Issue an estimated Notice of Assessment (NOA) requiring the company to pay IRAS’ estimated tax amount within one month.
  • Issue an “Offer of Composition for Failure to File Form C and/or Certified/Audited accounts and/or Corporate Tax Computation” to the company. Upon receipt of the Offer of Composition, the company is required to file the outstanding documents immediately and pay the composition fee of between S$100 and S$400 by the due date stated in the letter.
  • Issue a “Notice Pursuant to Section 65B(3) of the Income Tax Act” to the director of the company requiring the director to furnish the outstanding documents within 35 days from the date of the Notice.
  • Summon the company/director to Court. Upon receipt of the Summons notice, the company director/representative of the company is required to attend court on a date fixed by the court. Upon conviction, a fine of up to S$1,000 may be imposed and the company director/representative will still be required to file the outstanding documents to avoid further prosecution actions. If the company files the outstanding documents and pay the summons fee at least one week before the Court date, the company director/representative will not be required to attend court on the assigned date.
  • Take legal actions if the company fails to file a tax return for two years or more. Upon conviction in Court, it will have to pay a penalty equal to double the amount of tax that the IRAS may assess for that year of assessment, and a fine not exceeding S$1,000.

What are the late payment penalties and charges?

If the tax charged in an assessment is not settled within one month after the service of the NOA, or within such time as is allowed by the Comptroller of Income Tax, a penalty of 5% is added to the tax payable. An additional penalty is payable if after 60 days the tax remains unpaid. The additional penalty is imposed at the rate of 1% per month on the balance of the amount of tax outstanding. The maximum additional penalty imposed cannot exceed 12%.

When the 5% penalty has been imposed, a Demand Note will be issued, showing the unpaid tax and penalty. Payment has to be made by the due date stated in the Demand Note to avoid further penalties and recovery actions such as:

  • Appointing the company’s bank, tenant or lawyer as agent to pay the outstanding money to IRAS;
  • Impose an additional penalty of 1% on the outstanding tax for each completed month that the tax remains unpaid; and
  • Take legal action.

PROPERTY TAX

Annual property tax bills are payable by 31 January each year, while ad-hoc bills due to new assessments or re-assessments are payable within 30 days from the date of the bill. When no payment is received on annual property tax bills, or when the taxpayer’s GIRO plan is cancelled, a Notice of Pay will be issued. The Notice will show the unpaid tax and 5% penalty imposed on the outstanding tax. Payment thereafter has to be made within 14 days.

STAMP DUTY

Documents signed in Singapore are required to be stamped within 14 days from the date of execution, while documents signed overseas are to be stamped within 30 days of its receipt in Singapore. A penalty of up to 400% of the unpaid stamp duty may be imposed if the documents are not duly stamped, stamped after the stipulated time limit or insufficiently stamped.

A reduced penalty of 5% per annum calculated on a daily basis on the stamp duty payable may be imposed instead if the taxpayer voluntarily discloses an earlier omission or underpayment before IRAS starts any audit. The reduced penalty is also subject to the folllowing:

  • A minimum penalty of S$10 imposed on a document that is stamped within three months from the due date;
  • A minimum penalty of S$25 imposed on a document that is stamped after three months from the due date.

WITHHOLDING TAX

With effect from 1 July 2012, the completed Form IR37/IR37A/IR37B/IR37C/IR37D has to be submitted together with the payment by the 15th of the second month following the date of payment or deemed payment to the non-resident. A Demand Note will be issued and a penalty of 5% will be imposed if payment is not submitted by the due date. If the withholding tax payment is not settled within 30 days from the due date, an additional penalty of 1% will be imposed on the withholding tax for each completed month that the tax remains outstanding. The maximum additional penalty imposed cannot exceed 15%.