You can pay your IRAS taxes in Singapore in different ways. The tax payment needs to be done any time after one month of getting your IRAS Notice of Assessment (NOA), also known as the Tax Bill. The NOA will tell you how much tax you owe the government for the given Year of Assessment (YA). Having a variety of options ensures that you have choices about the method of paying taxes. It also makes the process easy and convenient at the same time. The modes you can use to pay your taxes are listed below:
Here we will talk about tax payment in Singapore through GIRO transfers. GIRO transfers can be used to pay the following: income tax, corporate tax, property tax, GST, withholding tax and stamp duty.
Here are the advantages of using GIRO for your tax payments:
To sign up for GIRO transfers of your tax amount, you need to first get the application form and fill it up. There are different GIRO forms for each kind of tax. If you have more than one kind of tax to pay, you can use the Master GIRO application form.
You can get the GIRO application form in several ways, such as:
GIRO applications through internet banking and AXS stations are promptly approved by the banks. The banks will send the application form to IRAS and the tax authority will get back to you within 14 working days on the status of the application. To avoid late payments, always complete the GIRO application on time and make allowances for the processing time of 14 days.
If you’re downloading the GIRO form from IRAS, you need to send the completed form to them. The address to which you can send the form is: Inland Revenue Authority of Singapore 55 Newton Road, Revenue House, Singapore – 307987
You can call the IRAS hotline 1800 356 8300 for help with completing the GIRO form. All GIRO applications are processed within 14 days by the tax authority. The status of your GIRO application can be tracked using the IRAS myTax platform.
There are two tax payment options through GIRO:
There is no interest charge on these instalment payments. The minimum tax payment for the GIRO instalment plan is S$20 per month.
The instalment period generally is May of the ongoing month to April of the following year. For example, if you are paying tax of S$786 for the assessment year 2019, your payments will begin from May 2017 and end in April 2018, at the rate of S$65.5 per instalment (per month). If you apply for GIRO transfer after May, then the amount will be deducted in the month after your application is approved. The ending date would be April of the next year irrespective of when the payment starts. The amount deducted from your account for each instalment depends on the total amount of tax and the number of months left in the year.
Tax deductions are made under the instalment plan by the 6th of every month. If the 6th of the month is a public holiday or weekend, then the amount will be debited on the next business day. If the tax deduction is not made for any reason – such as insufficient balance in your bank account – then IRAS will try to deduct the amount again on the 20th of the same month. Suppose the second trial also fails, then IRAS will deduct the amount along with the next month’s payment. E.g., if you owe S$75 per month, and both the withdrawal attempts in July 2017 fail, then an amount of S$150 will be debited in August 2017.
If the payment fails to go through for two months in a row, then your GIRO arrangement will be terminated. If the GIRO plan is cancelled, the pending tax amount will have to be paid promptly. IRAS or the bank does not send reminders about failed transactions, so it is better to ensure that your account has the required balance to pay taxes every month.
Your bank statement will show the transaction with the code ‘ITX’. This will help you keep track of tax payments through your bank account as well.
Once you are added to the GIRO plan in the IRAS system, the instalments are renewed each year. Instalments for the next year are debited as per the tax assessment made for you in the previous year. This is known as Provisional Instalment Plan (PIP). This provisional amount is revised when your Tax Bill for the year is released. The instalments will be adjusted according to the new tax liability. The actual tax amount for the rest of the ongoing year will be revised after subtracting the amount that has already been taken from your bank account under PIP.
For example, let’s say your tax liability as per YA 2016 was S$786 and an instalment of S$65.5 was being deducted. Under PIP, the tax authority will continue to deduct S$65.5 in YA 2017 as per the previous assessment. Now, let’s say your new NOA for YA 2017 calculates the tax required to be paid by you as S$865. If your payments for May, June, July and August are made under PIP at the rate of S$65.5, then you’ve already paid S$262 as taxes to IRAS through GIRO-PIP. The remaining tax liability for YA 2017 is S$603, which will be divided equally for the remaining months of the year. So from September onwards, your GIRO deduction towards tax would be S$75.375.
Once a new tax bill is generated for you, it will contain the new GIRO instalment plan details. In case your tax has been revised downwards, the excess amount will be refunded to you at the end of the year. You don’t have to make any claims to get this refund.
If you have already successfully estimated your new year’s tax payable, you can raise a request with IRAS to change the PIP amount as per your calculations. In case your income falls to below the taxable limit, then you can also request to cancel the PIP. The requests can be made either through the IRAS hotline or by emailing the tax authority.
Companies registered in Singapore can pay their corporate tax through GIRO arrangement. They cannot, however, pay their previous years’ taxes using instalment plan. The minimum tax amount allowed per instalment is S$50. The tax amount is debited from the company’s account through GIRO on the 6th of every month, and a second attempt is made on the 20th, just as in the case of income tax GIRO deductions. The first couple of instalments can be paid in one go if the filing is done a few days later than the deduction date. However, with corporate tax, you don’t get an extra month’s grace period. If both withdrawal attempts in a given month fail, then the GIRO plan is terminated.
Companies need to file their Estimated Chargeable Income (ECI) form after their GIRO application is approved, in order to take advantage of the IRAS instalment plan. The number of instalments allowed to the company depends on how quickly the ECI is filed, which is as listed below:
As you can see, e-filing your ECI will give you more number of instalments. When the final assessment of your corporate tax is made by the tax authority, your instalment amount will be revised accordingly. If the plan is already over, and you still have tax liability as per fresh assessment, then IRAS will make one GIRO deduction for the entire pending amount. If the instalment plan is still in force, the plan will be restructured and the amount due deducted in revised instalment amounts.
You need to pay property tax by 31 January every year. The process of property tax GIRO payments are quite similar to the income tax plan. The differences are given below:
You need to pay goods and services tax within 30 days of the end of the GST accounting period. GIRO payments for GST are a one-time lump sum payment and cannot be converted into instalments. The GIRO debit will be done only after the GIRO application is approved, so if the application is delayed during the current accounting period, you need to pay the GST through other means. The GIRO application will be approved and the deduction made for the next accounting period if the current one is missed.
GST is debited through GIRO on the 15th of every month. The transaction code for this deduction will be ‘GST’. If the GIRO transaction is rejected the first time, there will be no second trial and the GIRO process will be cancelled immediately. Make sure your GIRO form is submitted 14 days before the due date for paying the tax amount.
Before you start a GIRO plan for Withholding Tax, you should file your return through the S45 e-Services. If Withholding Tax is filed before the 15th of a month, GIRO debit will be done on the 25th of the month. If the filing is late, the amount will be debited through GIRO in the following month instead of in the same month. There will be a penalty on late filing as well.
The transaction code for this kind of tax is ‘WHT’. Withholding Tax also does not have a second trial for deduction, so the GIRO plan will be cancelled if the first attempt to deduct taxes does not go through.
Stamp Duty can be paid through GIRO only if you have subscribed to the e-Stamping system. This system takes away the need to send documents to IRAS for manual stamping. Stamp Duty is deducted on the third working day after e-Stamping of documents is completed. The e-Stamping will be approved only if the GIRO deduction is made in the first attempt itself.
The GIRO plans can be amended by calling the IRAS hotline. You can also use the IRAS eServices to view and manage your GIRO payments and tax balance. Log in to the IRAS myTax portal using your SingPass id, password and two-step verification.
You can see your payment plan on IRAS myTax by selecting “Account” and then “View Payment Plan”. You can see your tax balance by selecting “Account” and “View Account Summary”. GIRO payments are reflected in your tax account in 3 business days after the amount is deducted from your bank account.
To change the bank account linked to your GIRO transfers, you need to fill and send a separate GIRO application form. Tax payments can be made through the new bank account once the GIRO form is accepted by IRAS.
You can cancel or end your GIRO arrangement by calling the IRAS hotline or sending them an email through the myTax portal. Before you terminate an existing GIRO transfer arrangement, you need to pay off all overdue taxes.