Penalties, Interest and Additional Tax
Interest: If the relevant tax installment payment is not paid by the end of the month from the date the payment is due, then there will be interest on the unpaid tax installment at 1.75% (for 2020) per annum which is calculated on a monthly basis.
Penalty – Monetary charge: If there is any delay in the payment of any of the aforementioned installments of provisional tax declaration, then there will be an additional 5% flat penalty (“monetary charge”) on the tax due that should have been paid with any of these installments. The 5% penalty charge does not carry any interest charges. The 5% monetary charge is imposed on the outstanding tax after the deduction of the temporary tax, after charging 10% additional tax but before the deduction of the self-assessment due on 1st August next year.
10% additional tax: If the total taxable income declared (and the corresponding temporary tax paid) is less than three quarters (3/4) of the taxable income (and total corporation tax) as finally determined, the taxpayer must pay, in addition to the normal tax, an amount equal to one-tenth (10%) of the difference between the final and the temporary tax.
5% additional tax: For all taxes outstanding on 1st October of the next year, there is an additional 5% monetary charge which does not affect the 5% monetary charge imposed on unpaid tax balances where the tax is not paid within a period of 30 days from the due date.