Corporate Income Tax Installment Plans for Singapore Companies in 2021

If your business in Singapore has been affected by COVID-19, you may find it difficult to pay your corporate income tax. However, you are not alone in this situation. Some businesses are struggling to pay their taxes this year due to the devastating effects of the pandemic.

The good news is that the Inland Revenue Authority of Singapore (IRAS) is on your side with a series of support measures to ease the cash flow woes of businesses and individuals through longer tax installment plans for Singapore companies.

What will happen if I delay or ignore my corporate income tax payment?

Your company may be subject to penalties if you fail to pay taxes on time. You are expected to pay your taxes before the due date stated by the IRAS. If you fail to pay before the due date, the following penalties may apply to your company:

• A 5% penalty can be imposed on the past-due tax.
• If the tax is still not paid 60 days after the 5% penalty is imposed, an additional 1% per month penalty will be imposed up to a maximum of 12% of the unpaid tax.

If the tax remains unpaid, IRAS might take the following actions:

• Appoint an agent such as the company’s lawyer, bank, or tenant to pay the unpaid amount to IRAS
• Take legal action

What should I do if I’m unable to pay my tax on time?

Business owners and individuals will still have to file returns to provide the correct information to the government. Ensure you don’t ignore your tax bills or payment demands even when certain circumstances affect your business. Instead, you should contact IRAS to arrange a payment method and period that is financially comfortable for you.

Justifiable circumstances for more extended tax installment plans

You can make convenient payment arrangements together with IRAS. Longer tax installment plans can be part of the payment arrangement if the predicament around you is justifiable.

The justifiable circumstances include:

High medical expenses

If you have a severe health issue that requires you to spend a lot of money for treatment, or if you have to pay medical bills for your family members that make it difficult for you to pay taxes on time, then you can reach out IRAS for a longer, feasible payment plan.

Loss of employment or substantial reduction in income

If you have lost your source of income due to the impact of the COVID-19 situation, you have a justifiable reason to file for a longer payment plan with IRAS.

Business under financial distress

Suppose the pandemic has adversely impacted your business to the point that you are struggling to pay your employees or even keep the company afloat. In that case, you can negotiate with IRAS for a more extended payment plan.

Read a related article:

What are Tax Exemptions for Singapore Companies Like?

How to arrange for a longer tax installment plan

Note that IRAS can only grant you a corporate income tax installment plan via GIRO. If you want to request a more extended payment plan, you need to access the e-Service on myTax Portal. From there, you’ll have to head over to the ‘Apply for Payment Plan’ section with your SingPass, IRAS Unique Account (IUA), or CorpPass.

For those with an existing GIRO account

If you already have a GIRO account, you can easily adjust your arrangement. Here’s how you can customize your existing GIRO account:

• cancel your current payment plan, and
• set up a new payment plan.

For those without an existing GIRO account (for individual income tax and property tax)

If you don’t have a GIRO account to pay your personal income tax and property tax, here’s how to customize the payment plan:

• apply for a GIRO payment (with DBS/POSB or OCBC) via myTax Portal, and
• set up a new payment plan.

For those without an existing GIRO account (for corporate income tax and goods and services tax)

If you do not have a GIRO account for corporate income tax and goods and services tax, here are the steps that must be taken:

• Fill in the Master GIRO hardcopy form, then send it to IRAS
• Submit your payment proposal on the same day you sent the completed GIRO form to IRAS

Note that IRAS does not accept soft copy forms with e-signatures.

After submission, your request will be reviewed by IRAS, and you will know the results within 15 working days. Depending on the case, IRAS may ask for more information to fully understand your situation.

If your payment plan is accepted, you must adhere to the payment plan schedule. Failure to do so could result in IRAS canceling your plans and even taking action to recoup the tax.

Do you need more assistance in accounting and tax?

Up until today, the effects of the COVID-19 pandemic are still there, and we don’t know how long this will last. If you need other forms of assistance, feel free to contact our certified consultants.

At Biz Atom, we provide more than just accounting and tax assistance. We will be more than happy to give you advice on grants and waivers that are eligible for your business. Book a free consultation today.

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