IRAS imposes heavy penalties if businesses fail to file their returns or pay their GST on time.
If you fail to file your returns, the IRAS issues a Notice of Assessment with a penalty of 5% on the estimated tax. A penalty of $200 is also imposed for late submission immediately after the due date and for every outstanding month up until a maximum of $10,000.
If you fail to pay your GST amount within the one month deadline, a 5% penalty is imposed and a demand note is issued. After the demand note is issued, an additional penalty of 2% is added on each outstanding month up to a maximum of 50% and a total of 55% for late payments.
If you’ve made an error in filing your tax returns, you can choose to submit an F8 form to voluntary disclose mistakes and appeal for a reduced or waiver of the penalty, depending on whether you’ve met the qualifying conditions stipulated by the IRAS.
Besides fines, business owners can also face imprisonment if found to be wilfully evading GST tax.
GST can be a complicated topic for start-ups and SMEs especially if you do not have staff or a department to handle it. SCS Accounting is an outsourced accounting services provider catered to helping SMEs navigate and get the most out of their tax filing. See our range of services for small businesses and drop us a message at: scs-cpa.com/services/