Why You Should Never Mess with Taxation?

If you are the business owner, you should have basic knowledge of the tax and its vital parts for your financial system. A business without a proper financial operation especially come into handling the company tax affair, will causing a downfall for without your expectation. Therefore you should mess up with your company taxation. If you failing do so, here are some of the consequences that might happen to your business.

 

If You Miss the Tax Filing Deadline

If you know that you are going to miss the deadline, you can apply for an extension to the file in taxes via email.  In the email, you should include your full name, tax reference number, and the reason for the extension request and give them an estimate of your chargeable income.

In further if you just ignore filling your taxes completely, IRAS may take below action:

  1. Impose a late filing fee not exceeding $1,000;
  2. Issue an estimated Notice of Assessment (NOA); and
  • Summon us to Court.

For most of the cases, IRAS will impose a late filing fee instead of taking prosecution actions.  The late filing fee will depend on the past filing and payment record. If failure to pay the fee and ignore for the late notice will end up getting summoned to court.

 

Receiving a Notice of Assessment (NOA)

In the other way, IRAS may also send NOA to the person who has failed to file their income tax return. NOA is estimated base on the individual past years’ income or other information available to IRAS. Once, you received an estimated NOA, you must file your tax immediately and pay on the estimated tax within one month from the date of NOA.  Meanwhile, any excessed tax paid will be refunded and any shortage will be collected after.

Somehow, if failure to pay the estimated taxes on the due date, you will be informed of the 5% penalty via a late payment penalty letter. Subsequently, an additional 1% penalty will be imposed for every completed month (up to a maximum of 12% of the tax outstanding)

 

Further Enforcement Actions

To recover outstanding taxes, IRAS may seek further actions as below:

  1. Appoint agent like your banks, employers, tenants or lawyers to pay up. Agents will only be released from the appointment after the tax and penalties have been paid.
  2. Issue a Travel Restriction Order (TRO) and, you will not allow to leaving Singapore at the Immigration exit checkpoints. TRO can be withdrawn only full payment of the tax due have paid.
  • And of course, for some extreme cases will take further legal actions if you fail to pay our income tax for two or more years you will end up to be ordered to pay a penalty that is twice the tax amount you owe the IRAS for that year as well as a fine of up to $1,000. Failure to do so will result in imprisonment of up to six months.

 

Paying Taxes in Singapore

As we can tell, if you failing to file or pay taxes, fined and penalties can be stacked up. There really a bad idea for you to skip from taxes.  Instead of “run-away”, why not hire a tax professional to have proper tax planning to save your time, money, help your business grow and meanwhile avoid being late filling.

AG Singapore is one of the good respect among the taxation professional who has experience and credentials to help you with business taxes. If you have any queries on how corporate tax applies to your company, talk to our professional tax analysts, and we will help you!

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