Things You Should Know About Corporate Tax Refund

Corporate tax refunds, like most tax refunds, are usually done automatically without a need for the taxpayer individuals to make claims. However, in some cases or circumstances, the refunds may not be automatic. On average, tax credits that are at least $15 are usually refunded automatically within a period of 30 days after they arise without a need of a claim. In usual situations more than 90% of tax credits are refunded within a week.

As many corporate tax training courses in Singapore have touched on, IRAS has an obligation to pay interest if there are late refunds that extend beyond 30 days. But there will be certain situations in which IRAS will not be able to duly refund tax credits, and therefore will not be required to pay interests.

Some of these circumstances include:

Penalties/Outstanding Tax

Businesses with outstanding taxes or have incurred penalties will not receive automatic refunds. In this case, the tax credit is usually used to offset their outstanding liabilities instead.

Tax Credit Limit

Tax credit values that are less than $15 would usually be used as a means to offset the corporation’s future tax liabilities instead as a means of convenience. However, if business owners wish for their tax credit to be refunded instead, they can do so by emailing their requests to IRAS, who will then process it within 30 days.

Most corporate tax training professionals have added on that requests should contain the necessary information to facilitate the process: The refund request, the name of the corporation, the name of the business owner, the property address, tax reference numbers, credit balance amount that is due, email addresses, and contact numbers. Failure to provide the details requested by IRAS for refunds will result in an inability to perform the refunds.

GIRO Deductions

Tax credits that are resulted from GIRO deductions from the provisional installment plan will also not be automatically refunded. This is especially so when the tax assessment has not yet been finalized for the year of assessment at that particular time frame.

Dissolved Company

In the event that the corporation has been successfully dissolved, any credit under the corporation’s account will actually be transferred over to the IPTO (Insolvency and Public Trustee’s Office). Shareholders of the corporation that is now defunct can approach IPTO to claim the credit back. However, understand that charges will be incurred for processing the claim.

If you wish to check the tax credits and unclaimed monies, you will have to access the tax portal with the PIN you were given or rely on your SingPass. After which, select the view account summary option under the menu on the left so that you will be able to check the account balance. Alternatively, you can also refer to the statement of account that is included in tandem with income tax notice of assessment.

Here are just some of the things you should know about corporate tax refunds in Singapore. For those interested to learn more, it is highly recommended to sign up for corporate tax training courses in Singapore.