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.
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:
If the tax remains unpaid, IRAS might take the following actions:
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.
You can make convenient payment arrangements together with IRAS. Longer installment plans can be part of the payment arrangement if the predicament around you is justifiable.
The justifiable circumstances include:
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.
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.
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.
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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.
If you already have a GIRO account, you can easily adjust your arrangement. Here’s how you can customize your existing GIRO account:
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:
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:
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.
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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