Corporate income tax is due one month from the date of the Notice of Assessment. If it is not paid in full by then, IRAS imposes a 5% late payment penalty on the unpaid tax. If the tax is still unpaid 60 days after that, a further 1% can be added for each completed month, up to a maximum of 12% of the unpaid tax. IRAS can also appoint the company’s bank or tenants as agents and take legal action. If your company cannot pay, apply for a GIRO payment plan before the due date, not after the penalty notice arrives.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
When is company tax actually due?
IRAS’s page on late payment or non-payment of corporate income tax says payment is due one month from the date of the Notice of Assessment, which IRAS also calls the tax bill. The date that matters is the date printed on the notice, not the date someone in the company opened it.
This applies to every type of assessment, including an estimated assessment raised because the company did not file. It also applies while an objection is pending. IRAS says that if you have objected and are waiting for the outcome, you must still pay the tax shown on the notice, and any excess is refunded if the assessment is revised. Our guide to a Notice of Assessment that looks wrong explains the 2-month objection window.
How do the penalties build up?
The charges are set out in the Income Tax Act 1947 and described on IRAS’s page. The statute also allows the Comptroller to remit a penalty in whole or in part for good cause, which is the basis of the waiver process described below.
| Stage | What happens | Cost to the company |
|---|---|---|
| Notice of Assessment issued | Tax payable within one month of the notice date | The assessed tax |
| Due date passes without full payment | IRAS issues a late payment penalty notice | 5% of the unpaid tax |
| Still unpaid 60 days after the 5% penalty | Additional penalty begins | 1% of the unpaid tax for each completed month |
| Long-term non-payment | Additional penalty stops increasing at the cap | Total additional penalty up to 12% of the unpaid tax |
| At any point while tax is overdue | IRAS may appoint agents or take legal action | Bank funds diverted to IRAS; legal costs |
IRAS gives a worked example. A late payment penalty notice dated 1 July 2025 required S$10,500 (S$10,000 tax plus S$500 penalty) by 1 August 2025. The company did not pay, a 1% additional penalty was imposed on 1 October 2025, and payment was made on 15 November 2025. The total penalty was S$700: the 5% penalty of S$500 plus S$200 for two months at 1%.
What else can IRAS do to collect?
IRAS says it may appoint agents, such as the company’s bank, tenant or lawyer, to pay money they hold for or owe the company directly to IRAS, and it may take legal action. IRAS notes that this list is not exhaustive. Agents are released only after the tax and penalties are paid in full.
For most companies the first serious consequence is the bank appointment, because the account becomes difficult to use until the tax is cleared. If that has already happened, read our guide on IRAS appointing your bank as its agent, which covers getting the account released.
IRAS also reminds directors that they remain responsible for the company’s filing and payment even where a tax agent has been appointed and fails to act. Delegating the work does not delegate the obligation.
The company cannot pay in full: what are the options?
Your options depend on timing. They are much better before the due date than after it.
Option 1: the standard GIRO instalments
If the company is on GIRO and e-files its first Estimated Chargeable Income (ECI) early, IRAS gives interest-free monthly instalments: 10 if the ECI is filed within one month of the financial year end, 8 within two months, 6 within three months, and none after that. IRAS’s GIRO for corporate income tax page says no instalment arrangement is granted for back year taxes, and that companies without GIRO should sign up at least three weeks before filing the ECI. This is a planning tool for next year, not a rescue for an overdue bill. Our GIRO guide covers deduction dates and failed deductions.
Option 2: a longer payment plan for financial difficulty
IRAS’s page on experiencing difficulties in paying your tax says a company may ask for a longer instalment plan if it cannot pay because of unexpected or extenuating circumstances. The business reasons it lists include slow collections from debtors, reduced sales, increased overheads, and financial distress such as creditor lawsuits or business closure. Key points:
- Reach out before the payment due date where possible.
- Apply through the Apply/Manage GIRO Plan service on myTax Portal. Plans are only available on GIRO.
- Documentary evidence may be required, and IRAS may ask for more information.
- IRAS says it will reply within 15 working days.
- Once approved, the schedule must be followed. A failed GIRO deduction cancels the plan and makes the balance immediately payable, and repeated defaults may lead IRAS to reject future requests.
IRAS does not publish a maximum plan length for companies. Ask for a schedule the company can genuinely meet from its forecast cash flow, rather than the shortest one that might be approved.
Option 3: check whether the assessment is right
If the bill is an estimated assessment because Form C-S or Form C was never filed, the real tax may be lower. File the return with the accounts and tax computation and object within two months. You must still pay the estimate meanwhile, or agree a plan, because the objection does not suspend payment.
Steps to take this week
- Find every notice. Log in to myTax Portal through Corppass and list each Notice of Assessment and penalty notice, with its YA, amount and due date.
- Check the type of assessment. An estimated assessment usually means a return is outstanding. Fix the filing as well as the payment.
- Prepare a 13-week cash forecast. Show receipts, payroll, CPF, GST, rent and the tax, so you know what monthly amount the company can afford.
- Set up or reactivate GIRO. IRAS says reactivation takes one working day, new online applications three working days, and hardcopy forms three weeks.
- Submit the payment plan request with supporting documents, before the due date if it has not passed.
- Fund the account before each deduction date and check the bank’s GIRO limit is high enough.
- Consider the penalty waiver once the conditions below are met.
Can the late payment penalty be waived?
IRAS considers appeals only through the Appeal Penalty Waiver digital service on myTax Portal. For corporate income tax late payment penalties, it says appeals are considered only if the overdue tax was paid in full by the due date on the late payment penalty notice, and no waiver was granted in the past two calendar years. If the company cannot pay in full by that date, a waiver is unlikely, and the priority becomes the payment plan. Our article on IRAS penalty waiver appeals sets out the conditions for each type of penalty.
Example: a contractor waiting for a client to pay
Example: A small renovation company receives a Notice of Assessment for S$40,000 of tax. One month later, the due date arrives while a S$120,000 progress payment from a developer is overdue. The directors do nothing, and a 5% penalty of S$2,000 is imposed. Two months on, the bank tells them IRAS has appointed it as agent.
Had the directors applied for a GIRO plan before the due date, with the overdue invoice, the debtor correspondence and a cash forecast, the company would have had a case that fits IRAS’s listed reason of slow collections from debtors, and could have avoided both the penalty and the bank appointment if the plan was approved. Once the penalty is imposed, the company can still apply for a plan, but the penalty waiver depends on paying the overdue tax in full by the date on the penalty notice.
Documents checklist for a payment plan request
- The Notice of Assessment and any penalty notices
- Latest management accounts and bank statements
- Aged debtors listing, with evidence of overdue invoices and chasing
- A monthly cash flow forecast covering the proposed plan period
- Evidence of the specific difficulty, such as a lost contract or creditor claim
- Bank details and approver access for eGIRO
Frequently asked questions
If we object to the assessment, can we wait before paying?
No. IRAS says the tax shown on the notice must be paid even while an objection is pending. Any excess is refunded if the assessment is revised.
Is the 5% penalty charged again every month?
No. The 5% penalty is imposed once. If the tax remains unpaid 60 days after it, an additional 1% can be charged for each completed month, with the additional penalty capped at 12% of the unpaid tax.
Does an approved payment plan stop the penalty?
IRAS’s guidance focuses on agreeing a plan before the due date to avoid penalties. Ask IRAS to confirm the penalty position when your plan is approved, and keep to every deduction date.
Our tax agent missed the payment. Is the company still liable?
Yes. IRAS states that directors remain responsible for filing and payment even if an appointed tax agent fails to act.
How long does it take for a payment to show?
IRAS says payments take up to 3 working days to process. Pay early rather than on the due date.
Late filing is a separate problem from late payment; see what to do if you have missed the Form C-S deadline.
Need help with an overdue company tax bill?
If your company has missed, or expects to miss, a corporate tax payment, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133. We can review the notices in myTax Portal, prepare any outstanding Form C-S or Form C with the tax computation, build the cash forecast and supporting pack for a payment plan request, and file the penalty waiver appeal once the conditions are met. This article is general information, not tax advice.
Kevin Yeo, Raffles Corporate Services