Withholding tax must be paid to the IRAS by the payer on the 15th of the second month from the date on which payment is made to the non-resident. For example, if the tax amount is withheld by the payer in the month of May, the deadline to pay the tax to IRAS will be the 15th of July. To comply with the deadline it is essential to understand the notion of “date of payment”.
To determine the exact date of payment, the payer should consider the earliest of the following:
- Where the payment is made according to an agreement or contract, the date as mentioned in the contract.
- In the absence of a contract of agreement, the date of the invoice.
- The actual date when the income was credited to the account of the non-resident.
- Date of actual payment.
Note that the payer must determine all of the above dates, and then chose the earliest of them as the date of payment. When calculating the date of payment in case of Director’s fee, the date will be the earlier of the following:
- The payment date or
- Date of approval of the payment by means of voting at the Annual General Meeting of the company.