Were you aware of the fact that the IRAS permits business owners to pay their taxes in installments if they pay via GIRO? IRAS (Inland Revenue Authority of Singapore) is built to accept corporate payments in all digital forms. Thus, most companies prefer paying their corporate income taxes through GIRO since paying via GIRO has its own set of benefits. In this article, we will discuss all the benefits of paying your corporate income tax and the method of applying for GIRO to pay your income tax. But before that, let’s take a look at what GIRO is.
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What is GIRO pay?
GIRO stands for General Interbank Recurring Order. It is an automatic cashless payment service that allows other businesses or customers to collect or make payments to your bank account directly. It aids with transferring recurring payments, such as your corporate income tax payments, between banks in Singapore. What GIRO does is it transfers money from your business bank account directly to the Inland Revenue Authority of Singapore (IRAS) via an automatic electronic payment system. A point to be noted here is that GIRO payment is not available to everyone; you have to apply for a GIRO payment for your business and then set up a tax payment system on GIRO.
What are the benefits of paying your corporate income taxes via GIRO?
There are multiple electronic payment methods for paying your taxes, but as a business owner, you need a method that will make your life easy. This is where GIRO comes in. GIRO is the epitome of convenience. Once you set up a GIRO payment, the tax payment will automatically be deducted from your business account and wired to the IRAS.
Another benefit of paying your corporate taxes with GIRO is that you don’t have to pay your entire bill all at once. As per the Singapore Budget 2020, companies that choose to pay their corporate income tax via GIRO can pay it in installments. All you have to ensure is that your business files its Estimated Chargeable Income (ECI) on time every month. The IRAS will then provide you with two additional months to pay the taxes in installments, interest-free.
Finally, setting up an automatic electronic GIRO payment won’t cost you anything. The entire tax payment system is free of charge. However, there is a chance that banks might ask you to pay a penalty in case of an unsuccessful payment. This often happens when you have insufficient funds in your account, so always check your business account before your corporate income tax payment is due.
How do you apply for GIRO to pay the corporate income tax?
The IRAS is the body permitted to process and approve your GIRO application for your business’s tax payment. When you visit the IRAS website, you will find the following forms available:
- An individual income tax GIRO form
- A Corporate Tax GIRO form
- A property tax GIRO form
- A GST GIRO form
- A Stamp duty GIRO form
- A master GIRO form
You will have to download the Corporate tax GIRO form and fill it out. You can also download the Master GIRO form if you wish to set up an all-inclusive GIRO arrangement for corporate tax, property tax, GST, and withholding tax. This saves you time since you are not applying for each type of tax individually.
The application process is as follows:
- Visit the IRAS website and download the corporate tax GIRO form.
- Fill out the form with your personal information, company details, and the company’s bank account particulars.
- Print the form and sign it.
- Mail the form to the IRAS and wait for their approval.
The IRAS takes about three weeks to review and process your company’s GIRO application.
So, to conclude, paying your corporate income taxes via GIRO offers a seamless, convenient, and cost-effective way to manage your corporate tax. With GIRO payment, you get the option to pay your taxes in installments, and the entire process is free of charge. Applying for GIRO payment is a simple process, with forms readily available on the IRAS website. This entire system can be set up within weeks. Embrace this hassle-free method to keep your business compliant and financially organized.
