What will happen if a tax return is filed late?

No matter whether it is sole proprietorship, individual businesses or corporations, taxpayers are required to complete and file the tax returns to the Inland Revenue Department (IRD) within 1 month from the date of issue of the profits tax returns.

If a taxpayer does not file his tax return on time, he may be required by the IRD to pay a penalty. It ranges from one to several thousands dollars. It can even be up to 2 or more times of the payable tax of that fiscal year (i.e., a total of 3 times the normal tax amount). A taxpayer may even be prosecuted if his tax return is filed too late.

If the taxpayer has a tax representative, he can have extended deadline of tax return submission. It depends on the situation and the type of the tax return.

For example, in financial year 2020/2021, if a taxpayer is a sole proprietor and he has a tax representative, the deadline of filing his tax return can be extended from within 1 month to until the end of October. The taxpayer will have four more months to handle his tax return.

Therefore, if a taxpayer is running a business or having rental income, it would be better for him to appoint a tax representative. He should contact the tax representative immediately once he receives any letters from the IRD. His tax representative can then handle the issue of the IRD letter on behalf of him and apply for deadline extension if needed. It can then avoid unnecessary penalties.