The majority of payers file and pay their withholding tax on time. The filing and payment due date is 15th of the second month from the date of payment to the non-resident. You may face penalties and recovery actions for late or non-payment of taxes.
On this page:
Consequences for late payment or non-payment of taxes
IRAS may take the following actions if you fail to pay by the due date:
- Impose late payment penalties
- Appoint agents like your bank, tenant or lawyer (handling the sale of any of your property) to recover the overdue tax
- Take legal action
The above list is not exhaustive.
Late payment penalty
A 5% late payment penalty will be imposed if payment is not received by the due date.
Example: Penalty imposed for late payment
Date of payment to the non-resident for the gross royalty of $10,000 is on 7 Apr 2024. The tax payable is $1,000 (10% x $10,000). A 5% penalty of $50 (5% x $1,000) is imposed when tax is not paid by 15 Jun 2024.
| Date of payment to non-resident | Filing and payment due date | Date payer filed and paid tax | Tax payable | 5% Penalty imposed |
|---|---|---|---|---|
| 7 Apr 2024 | 15 Jun 2024 | 28 Jun 2024 | $1,000 | $50 |
If the tax remains unpaid 30 days after the payment due date, an additional penalty of 1% per month may be imposed for every completed month, up to a maximum of 15% of the unpaid tax, that the tax remains unpaid.
Example: Penalty imposed for continued late payment
Date of payment to the non-resident is on 26 May 2024, hence the tax payable of $7,000 is due on 15 Jul 2024. Payer did not pay the tax by the due date and received a late payment penalty notice with 5% penalty added to the overdue tax.
Payer eventually paid the tax and penalties on 25 Oct 2024.
As the tax was unpaid for 2 completed months (i.e. Sep 2024 to Oct 2024) after 30 days from the payment due date, 1% penalty is imposed for each completed month that the tax remained unpaid.
The total penalty imposed would be $490 [ (5% penalty x $7,000) + (1% additional penalty x $7,000 x 2 months)].
| Date of payment to non-resident | Filing and payment due date | Payment date | Tax payable | 5% Penalty Impose | Additional 1% penalty imposed |
|---|---|---|---|---|---|
| 26 May 2024 | 15 Jul 2024 | 25 Oct 2024 | $7,000 | $350 ($7,000 x 5%) | $140 ($7,000 x 1% x 2 months) |
Appealing for waiver of late payment penalty
Appeals must be made via Request for S45 WHT Penalty Waiver.
Appeals will only be considered if:
- You have paid the overdue tax in full; and
- No waiver has been granted in the past 2 calendar years up to date; and
- You undertake to pay your tax by the due date in future. This includes taking measures to ensure that late payment will not happen again, such as signing up for GIRO.
We will process your request within 15 working days.
Appointment of agents
If the tax remains unpaid, IRAS may appoint agents like your bank, tenant, lawyer or other 3rd parties with money due to you to recover the overdue tax owing.
When your bank is appointed as agent, you will experience inconvenience in using your bank accounts (e.g. being unable to access your bank accounts) until you have fully paid your tax.
Requests made for the release of your bank as the agent appointment after 12pm on weekdays will only be processed on the next working day while requests cannot be processed on Saturdays, Sundays and Public Holidays.
Agents will be released from the appointment only after the tax and penalties have been paid in full.
Making payment
You can make WHT payments through the various payment modes.
GIRO cancellation or termination
You are advised to maintain enough funds in your bank account. If the GIRO deduction is unsuccessful due to insufficient funds in the bank account, or incorrect limit set, etc., IRAS will cancel the GIRO plan. The balance of the unpaid taxes becomes due and payable immediately. You may be imposed a penalty if you do not settle the unpaid taxes promptly.