Benefits Of Paying Your Corporate Income Tax Via GIRO
Did you know that IRAS allows you, a business owner, to pay your corporate taxes in installments if you pay it via GIRO? Yes, although the IRAS (Inland Authority of Singapore) is built to accept corporate payments in all digital forms of payment, most companies in Singapore prefer paying their corporate income tax through GIRO because paying your corporate income tax via GIRO comes with its own set of benefits. In this article we have covered the benefits of paying your corporate income tax and the method to apply for GIRO to pay your income tax.
What is GIRO pay?
GIRO stands for General Interbank Recurring Order. It is a cashless payment automatic payment service that allows other businesses or customers to directly collect or make payments to your bank account. 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 that you can choose from to pay your taxes but as a business owner you need a method which will make your life easy. This is where GIRO comes in. GIRO is the epitome of convenience. Once you have a set up GIRO payment, the tax payment will automatically be deducted from your business account and will be wired to the IRAS.
Another benefit of paying your corporate taxes with GIRO is you don’t have to 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 company files its Estimated Chargeable Income (ECI) on time. The IRAS will then give you 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. Although 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 mandated to process and approve your GIRO application for 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 up. 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 will save you the hassle of 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 the form with your personal information, company details and 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 the 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 and this entire system can be set up within weeks. Embrace this hassle-free method to keep your business compliant and financially organized.