The Deputy Prime Minister and Minister for Finance, Mr Heng Swee Keat, unveiled additional support measures to ease cash flow for taxpayers in the Resilience Budget announced on 26 March 2020. One of the measures is the automatic deferment of income tax payments as explained below.
Businesses
For companies, the Corporate Income Tax (CIT) payments that are due in the months of April, May, and June 2020 will be deferred for three months and collected in July, August, and September 2020 respectively. It is crucial to note that the automatic deferment of CIT payments will complement the automatic extension of additional two months interest-free instalments on ECI as announced in the Unity Budget 2020 on 18 February 2020. An example to illustrate the deferment of CIT payments is provided below:
Example
Company A’s financial year-end is in December and had e-filed its Estimated Chargeable Income (ECI) for the Year of Assessment (YA) 2020 on 15 January 2020 with a CIT payable of S$9,000. Accordingly, the number of instalment plans availed to Company A for its ECI is twelve and the revised instalment plan for Company A’s ECI tax payable for YA 2020 is as follows:
|
|
Feb 2020 |
Mar 2020 |
Apr 2020 |
May 2020 |
Jun 2020 |
Jul 2020 |
Aug 2020 |
Sep 2020 |
Oct 2020 |
Nov 2020 |
Dec 2020 |
Jan 2021 |
Feb 2021 |
Mar 2021 |
Apr 2021 |
|
CIT payments prior to Resilience Budget Announcement |
S$1,200 |
S$1,200 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
|
|
|
|
Deferred CIT payments after Resilience Budget Announcement |
S$1,200 |
S$1,200 |
|
|
|
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
S$660 |
Note: The example illustrated above has taken into account the two relief measures (i.e. automatic extension of interest-free instalment of 2 months for payment of CIT on ECI and CIT rebate of 25% of the CIT payable (capped at S$15,000) for YA 2020) as announced in the Unity Budget on 18 February 2020.
By examining the figures in the table above, it is evident that Company A’s CIT payable on its ECI is deferred for three months to ease the cash flow needs for April, May and June 2020 as a relief measure to help Company A tide through the challenges brought by the COVID-19 outbreak in these months.
Companies can expect to receive a letter from the IRAS by 15 April 2020 on the deferred CIT payments. Companies who are on the GIRO will be able to view their revised instalment plans at IRAS’ myTax Portal from 1 May 2020.
Self-Employed Persons (SEPs)
The tax filing deadline for SEPs to e-file their Personal Income Tax (PIT) returns via the IRAS tax portal for YA 2020 is by 18 April 2020. Accordingly, the PIT payments for SEPs that are due in the months of May, June, and July 2020 will be deferred for three months and collected in August, September, and October 2020 respectively. An example to illustrate the deferment of PIT payments for SEPs is provided below:
Example
SEP B files his PIT returns for YA2020 by 18 April 2020 with a PIT payable of S$1,200. SEP B has an existing GIRO instalment arrangement with the IRAS and his PIT is payable in 12 months of equal instalments. The revised instalment plan for SEP’s PIT payable for his YA 2020 tax assessment is as follows:
|
|
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
Jan |
Feb |
Mar 2021 |
Apr |
May |
Jun |
Jul |
|
PIT payments prior to Resilience Budget Announcement |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
|
|
|
|
Deferred PIT payments after Resilience Budget Announcement |
|
|
|
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
S$100 |
Individual Taxpayers (Employees)
Individual taxpayers can opt to defer their income tax payments due in May, June and July 2020 by signing up for the deferment option by 31 July 2020. The application can be made online here: https://form.gov.sg/5d5ce149c0a8230012d27118.
This deferment does not apply to non-Singapore citizen employees who have sought tax clearance and employees of foreign employers.
Once the request to defer the payment is approved, the new arrangement shall supersede any due date indicated on the Notice of Assessment.
If the taxpayer is paying his or her income tax by GIRO, there will be no GIRO deduction in May, June and July 2020. The income tax deduction will resume in August, September or October 2020 and the end-date of the instalment plan will be extended by 3 months.
For taxpayers settling their income tax liabilities in one lump sum payment, the payment will be deferred by three months.