How to apply for installment payments? What else should I pay attention to?

Does the economic downturn put taxpayers under tax pressure? Late payment of tax may be fined by the Inland Revenue Department. To avoid the above situation, the government has announced the instalment payment measures, which can exempt related surcharges, whether it is profits tax, salaries tax or personal assessment tax. This article will discuss what to look out for when applying for tax instalments.

Apply for tax instalments?

According to the guidance of the Inland Revenue Department, if there are taxpayers (whether individuals or corporate legal persons) who are unable to pay their taxes on time due to financial difficulties, they can contact the Collection Enforcement Section of the Inland Revenue Department. And apply for instalment tax payment.

Before the Inland Revenue Department officially approves the instalment application, the taxpayer can temporarily make the payment according to the instalment proposal submitted by him. Generally, only in exceptional circumstances, instalment payment is not approved.

The surcharge will be waived for payment on time

From the date of the tax payment deadline, the unpaid tax of the taxpayer will be subject to an additional 5% surcharge; once the tax payment deadline, the total amount of tax including the 5% surcharge cannot be paid within six months, the taxpayer will be subject to an additional 10% surcharge.

However, once the application for tax instalment is approved and the instalments can be paid in full, the above surcharge will be waived. The waiver is applicable to salaries tax, profits tax and personal income for the year of assessment 2020-21 Tax bills, the exemption period is limited to one year from the tax payment period date.

Inland Revenue Department may file a tax claim in court

It should be reminded that even if the application for tax payment by instalments is approved, the Inland Revenue Department has the right to file a lawsuit with the court over the tax arrears. The tax defaulter may be required to pay the relevant court fees from the commencement date of the lawsuit until the debts are fully paid. Fees and Interest.

How to apply for an instalment payment?

Taxpayers who want to apply for instalment payment can apply in the following ways:

1) Submit the electronic application form

Those in need can download the relevant forms from the “Smart Convenience” website and submit them to the authorities:

• Individuals, sole proprietors – Form IR1360;

• Partnership – Form IR1360A;

• Incorporation – Form IR1360B;

2) Go to the tax office to apply in person

Those in need can also go to the 6/F (individuals) or 7/F (corporate, partnership and departure cases) of the Tax Tower in person to handle the relevant applications at the “Tax Collection Unit”.

3) Submit the application in writing.

Taxpayers who wish to apply for instalment payment must submit the following documents and information in writing to the authorities:

• daytime contact numbers;

• Specific tax instalment advice;

• supporting documents (an income and expenditure statement) showing the financial situation for the last 3 months;

• Bank passbooks, monthly statements, credit information of banks or financial institutions in the last 3 months;

• Accounts (Profit and Loss Statement and Balance Sheet) for the last 3 months of business operations.

The above information is for reference only. If you have any questions about instalment payment and taxation, we welcome your inquiries.