What is 2-tier Penalty Framework?
ACRA announced on 30 December 2020 that revised penalty framework for filing of annual returns and annual declarations, to take effect from 30 April 2021.
The revised penalty simplifies the penalty framework to a 2-tier system for all entity types:
- If within 3 months – a $300 late fee
- If more than 3 months — a $600 late fee
Deferment of 2-tier Penalty Framework
In the latest update from ACRA, to allow more time for transition, the implementation of the 2-tier penalty framework has been put on hold, until further notice.
With the deferment, the current penalty framework will continue to apply for filing of annual lodgments. All Singapore incorporated companies and VCCs will continue to incur a flat penalty tier of $300.
Foreign companies and LLPs will continue to be levied with late lodgment penalties ranging from $50 to $350. The amount payable will be reflected and imposed at the point of lodgment via BizFile+ portal.
Refer to the table below for the current penalty framework.
|Entity Type||Late Lodgment Penalty|
|Local Companies and Variable Capital Companies (VCC)||Fixed rate of $300 regardless of lateness|
|Foreign Companies and Limited Liability Partnerships (LLP)||Tiered penalty ranging from $50 - $350 (8 different tiers)|
How does this affect me?
Essentially, this delays the upcoming revised penalty framework where the late filing penalty would be increased.
So, until ACRA has another update, the current penalty will remain.
Nonetheless, in order to avoid incurring late lodgement penalties, ACRA had urged all entities to comply with the statutory timelines and file the annual lodgement on time.
Should you have existing late lodgement penalties, it is recommended to file the entity’s annual lodgement before the implementation of the 2-tier penalty framework. You may also submit an appeal for waiver of the late penalty, together with a representation form, to ACRA.