Apply for GIRO Plan When You Owe And Can’t Pay Taxes Right Away

When IRAS notifies you to file your business’ tax return, you must file it even if it is a ‘NIL’ return. Many owners pay their tax dues with their returns. However, the problem arises when you can’t pay taxes right away.

Should you immediately apply for an extension period? Or, take the complete stock of your cash flow situation and then decide? You should take the first option if your situation is very temporary and you have an assured source of money which you can use to pay off your tax liability.

However, if your financial situation is critical and a few extra days are not going to improve your ability to pay the tax amount, then you must think of something else to resolve the issue. You have to be proactive in doing this.

Your staying idle will not cause the problem to go away. In fact, your inaction may aggravate it, as IRAS will levy a 5% late payment penalty on your overdue tax amount.

If you are having serious cash flow issues, asking for an extension of time to pay is not going to help you much. Rather, you should ask IRAS for an instalment plan or a suitable payment arrangement. Most importantly, you must reach out to the agency before your tax payment deadline expires.

Read on to learn what IRAS may be able to offer you when you can’t pay taxes right away.

Having Financial Difficulties and Can’t Pay Taxes Right Away

Coping with the ups and downs in finances is a part of running a business. However, a situation where you can’t pay your taxes is a serious situation. If you can’t deal with it on your own due to the severity of unexpected or extenuating circumstances, IRAS may be able to put together a viable payment arrangement for you.

Businesses Having Financial Difficulties

IRAS may offer you a longer-term instalment plan to take immediate financial pressure off you. It will give you a breathing and mental space to try and reconfigure your cash flow, operations, and plan.

Your financial issues may be due to:

• Slow collections
• Drastic reduction in income
• Increase in overheads
• Financial difficulty due to an ongoing lawsuit
• Business closure

Whatever the case, IRAS may ask you for supporting documents before approving a longer-term instalment plan for you.

Getting an Easy GIRO Payment Plan

IRAS grants you an instalment plan only if you agree to pay via GIRO. General Interbank Recurring Order (GIRO) is an electronic payment method that enables you to pay other entities or billing organisations through your corporate bank account.

To apply for a longer payment plan, you must log in to the mytax.iras.gov.sg web portal and go to Apply/Manage GIRO Plan.

At myTax portal, you can apply to IRAS for a new GIRO arrangement, provided you agree to pay your company or corporate tax, Goods and Services Tax (GST), Property Tax and Withholding Tax via eGIRO.

GIRO Plan and Arrangement

New eGIRO Arrangement

Apply for a new eGIRO arrangement to streamline your tax filing. It is readily available to you if you bank with DBS/POSB, OCBC, UOB, Bank of China and Maybank.

Re-activate Your GIRO Arrangement

You can re-activate your GIRO arrangement to get an easy payment plan. You will need to do it separately for your business’ corporate tax/GST/property tax.

You will must also choose the right GIRO Plan Option to simplify payment of Property Tax. Choose between ‘Monthly’ and ‘One-time Yearly’.

You can also hire an experienced tax agent or a corporate tax services Singapore and take their advice on your tax situation. They employ qualified accountants who can take care of these tasks easily. They can also help you in tax planning and streamlining your cash flow.

However, you should not forget that IRAS holds you, as a company director, responsible and liable for paying your company’s tax dues.

Using a GIRO Plan

If you are already paying using a GIRO plan, you may have to edit or update it or your bank account. To do so, in myTax portal, click on:

‘Account’ => ‘View GIRO Plan’ => ‘Proceed (For Property Tax Accounts)’ => ‘View’ => ‘GIRO Plan Option’ => ‘Edit’

To view the revised GRO plan, click on:
‘Account’ => ‘View GIRO Plan’

Do You Operate an Account With Other Bank?

If you have an account with a bank that is not mentioned above, you can still get a suitable payment plan. The steps are as follows.

• Fill and submit the hard copy of Corporate Tax GIRO or GST GIRO form to IRAS; and
• Send your proposal for payment online to IRAS on the same day

The agency will process your request, and you will get their decision within 15 working days. It may demand more information to grasp your situation fully.

To know whether the updating of your GIRO plan has gone smoothly or not, check the ‘Acknowledgement page’. This page should show you details of your new payment plan and application status as ‘Approved’.

Defaulting on GIRO Plan

You must be careful with this arrangement and keep enough balance in your bank account. If any of your GIRO deduction fails due to insufficient balance, IRAS may cancel this arrangement, and then you must pay unpaid taxes immediately.

If you fail to do so promptly, it may also penalise you for non-payment of unpaid taxes. In addition, the agency may not allow you such a payment arrangement if you repeatedly default on your plan.

Businesses face financial difficulties all the time. However, if it happens during tax season, they can’t pay taxes right away and need a payment plan that will ease their burden.

If you are facing such a short-term inability and can’t pay taxes right away, we can talk to IRAS on your behalf to see if the agency can provide you with a viable payment plan. We, as a reliable corporate service provider and a registered filing agent, can help you with this issue. Contact us at +65-6536 0036 or info@sbsgroup.com.sg for customized tax services.

Also Read: Why You Should Outsource Your Accounting Functions