In case you are unable to file taxes due to bankruptcy, you must first declare the same. You can voluntarily file in case you are unable to repay any debt of $15,000. However, your creditors can also file on your behalf if they do not receive your monthly installments.
Situation: I owed a few dollars to the tax department, but later on, I failed to make the payment due to bankruptcy. Now the tax department is threatening me in these circumstances. I need help.
In charge of handling your assets.
Singapore law provides an Official Assignee(OA) as an officer responsible for handling your assets and distributing them to the creditors once you are bankrupt.
Private accountants or lawyers can also take control if a private trustee backs them.
Filing for bankruptcy is feasible if your finances do not allow repayment soon. Creditors cannot add any further interest to the amount owed.
The OA reviews your conditions and draws a revised monthly repayment scheme.
Moreover, creditors cannot harass you for payments once you incur bankruptcy. The law safeguards you from lawsuits any of the creditors may file.
Filing for bankruptcy also protects the best interests of your dependents.
Given the financial situation in bankruptcy, you also receive renewed tax payment benefits.
According to the Notice of Assessment, you are still liable to fulfill your tax duties.
However, you can opt for an objection if you are unable to pay before the due date.
Exceeding the due date invites a 5% late payment penalty followed by additional penalties of 1% per month.
If you cannot pay taxes in the stipulated time, you can avail up to twelve months interest-free installments using GIRO.
In case you join the scheme after May, it commences from the month following your application and ends in April the following year.
However, if you fail to comply with the plan, they can take legal actions against you.
You can apply for a penalty waiver if you pay the amount before the due date and the notice delayed.
Also, you are eligible for the waiver only if you didn’t receive any waiver in the preceding two years.
If you cannot fulfill payments in due time, the IRAS appoints banks or lawyers to complete the pending amount.
You also receive a travel restriction order to keep you in Singapore.
Tax authorities cannot harass you.
In the case of financial difficulties arising from bankruptcy, tax authorities cannot harass you or publicly shame on any occasion.
If they attempt to collect a false claim or threaten you in any form, you can file for legal action against them and even receive compensation.
For more information regarding tax filing and bankruptcy, fill-up the form on our website and get in touch with expert lawyers and legal advisors.