Malaysia: Special Program For Voluntary Disclosure

In the effort to address tax leakages, reduce the existing tax gap and explore new sources of revenue to increase tax collection, the Government of Malaysia has established a Tax Reform Committee. Hence, a Special Program is offered to encourage taxpayers to make voluntary disclosure in reporting their income and paying tax within the stipulated period. 

The Inland Revenue Board (IRB) of Malaysia has implemented Special Program ForVoluntary Disclosure commencing from 3 November 2018 until 30 June 2019. The Voluntary Disclosure covers the following: 

a) Income not previously declared, expenses overclaimed / expenses not allowed and reliefs / deductions / rebates over claimed; 

b) Reporting of gains on disposal of assets (real properties and shares in real property companies); and 

c) Stamping of unstamped instruments. 

VoluntaryDisclosure can be made forincome and gains from disposal of asset for year of assessment 2017 and preceding years of assessment as well as instruments not stamped after 6 months from the stamping period. 

This program is open to all categories of taxpayers. 

i) Taxpayers who are not registered with the IRB 

- New taxpayers have to firstly register for an income tax number. The Income Tax Return Form (ITRF) / Petroleum Return Form (PRF) / Real Property Gains Tax Return Form (RPGTRF) must be submitted either via e-Filing / e-Lodgement or manually.

ii) Taxpayers who are registered with IRB but have not submitted ITRF / PRF / RPGTRF for any year of assessment 

- The ITRF / PRF / RPGTRF must be submitted either via e-Filing / e-Lodgement or manually. 

iii) Taxpayers who have submitted the ITRF / PRF / RPGTRF but have not reported the correct information of the income / gains on disposal of asset(s) for any year of assessment 

- Taxpayers are required to submit a written declaration either via letter or e-mail of the income / gains on disposal of assets not previously declared. 

iv) Persons who fail to stamp executed instruments 

- Instruments not stamped are to be submitted online or manually for stamping. 

The IRB will accept in good faith all voluntary disclosures made during the Special Program period. Further review may not be made on the reported information. Penalty rates applicable and due dates for the payment of tax are as follows: 

Effective from 1 July 2019, the penalty rates will range between 80% to 300% under the existing law.

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