If a Singapore company fails to file its corporate taxes on time, it may face a range of penalties imposed by the Inland Revenue Authority of Singapore (IRAS), including:

  1. Late Filing Fees:
    • IRAS may impose a late filing fee for failing to file corporate tax returns by the due date (usually November 30 each year).
  2. Composition Fines:
    • If the company continues to delay filing even after the late fees are imposed, it may face composition fines. These fines typically start at S$300 and can increase depending on the severity and frequency of non-compliance.
  3. Summons to Court:
    • If a company still fails to file its taxes despite fines, IRAS may issue a summons to court. This can result in additional penalties, including court-imposed fines or legal action. The fine imposed by the court can be up to S$5,000 per charge.
  4. Imprisonment:
    • In extreme cases of non-compliance or repeated failure to file corporate taxes, directors or company officers responsible for the company’s tax filings may face imprisonment of up to 6 months.
  5. Increased Tax Assessments:
    • If a company does not file its corporate taxes, IRAS may issue an estimated tax assessment. This can result in a higher tax assessment than if the company had filed its taxes accurately.
  6. Late Payment Penalties:
    • If taxes are not paid on time after the Notice of Assessment (NOA) is issued, a 5% penalty on the tax owed will be imposed. Additional penalties of 1% per month (up to 12% total) can be added if the tax remains unpaid.
  7. Legal Action to Recover Unpaid Taxes:
    • IRAS can take legal action to recover any outstanding taxes. This could involve garnishing bank accounts, seizing assets, or other enforcement measures to recover the unpaid amount.

Businesses need to meet their tax obligations on time to avoid these penalties and legal consequences. If you have any corporate tax filing queries, you can contact the Raffles Corporate Services tax advisory team at [email protected].

 

Yours sincerely,

The editorial team at Raffles Corporate Services