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Tax administration

Q: When must taxpayers settle the tax after receiving the notice of assessment (NA)?

Taxpayers must settle the tax within 30 days after the date of the notice of assessment (NA). A late payment penalty of 10% is levied if tax is paid beyond the 30 days.

Q: What is the waiver for newly-commenced SMEs regarding tax estimates?

The requirement to provide an estimate of tax is waived in respect of the first year of assessment with a basis period and the immediately following year of assessment.

Q: What is the requirement for employment income tax for individuals?

For an individual, employment income is subject to monthly tax deduction (MTD) from monthly emoluments.

Q: What is the deadline for notifying DG of a change of address?

Notify DG within 3 months from the date of change of address.

Q: What are the liabilities of directors holding at least 20% of the ordinary share capital?

Directors are jointly and severally liable to pay any tax or debt liable to be paid by the company.

Q: What happens if business income tax installments are not paid within 30 days of the due date?

A penalty of 10% of the amount unpaid is levied.

Q: What are the consequences for willful evasion of tax by a company?

Fine of RM1,000 - RM20,000 or/and imprisonment ≤ 3 years. Special penalty of 3x tax undercharged .

26 important questions on Tax administration

What happens if the tax liability exceeds the tax estimate by more than 30%?

If exceeds the tax estimate or revised tax estimate by more than 30%, there will be a 10% penalty on the excess

When must taxpayers settle the tax after receiving the notice of assessment (NA)?

Taxpayers must settle the tax within 30 days after the date of the notice of assessment (NA).
A late payment penalty of 10% is levied if tax is paid beyond the 30 days.

What is the waiver for newly-commenced SMEs regarding tax estimates?

The requirement to provide an estimate of tax is waived in respect of the first year of assessment with a basis period and the immediately following year of assessment.

When should an individual notify DG about chargeability upon arrival in Malaysia?

An individual arriving in Malaysia who is chargeable to tax must notify within 2 months of their arrival.

What is the requirement for employment income tax for individuals?

For an individual, employment income is subject to monthly tax deduction (MTD) from monthly emoluments.

What are the powers of the DG regarding tax administration?

Call for a specific return and production of books.
Require full and free access to all lands, buildings, places, books, documents, and things.
Require any person to provide information within a specified time.
Prevent a person from leaving Malaysia.

What is the deadline for notifying DG of a change of address?

Notify DG within 3 months from the date of change of address.

What are the liabilities of directors holding at least 20% of the ordinary share capital?

Directors are jointly and severally liable to pay any tax or debt liable to be paid by the company.

What happens if business income tax installments are not paid within 30 days of the due date?

A penalty of 10% of the amount unpaid is levied.

What are the consequences for willful evasion of tax by a company?

Fine of RM1,000 - RM20,000 or/and imprisonment ≤ 3 years.
Special penalty of 3x tax undercharged.

What is the time frame for lodging an appeal if a taxpayer is aggrieved by an assessment?

An appeal can be lodged within 30 days after the service of the notice of assessment or any approved extended period. The appeal must be in writing through a prescribed form [Form Q].

What penalties apply to a person advising a company in tax return completion under S114(1A)?

Fine of RM2000-20,000 or/and 3 years imprisonment for not taking reasonable care in completing the return.

What is the deadline for filing Form B for individuals with business income?

Individuals with business income must furnish Form B by 30 June of the following year(6 months)

What is the penalty for incorrect return without prosecution under S113?

A penalty of 100% x tax undercharged.

What is the tax estimate requirement for existing companies, LLPs, and trusts?

Must furnish a tax estimate not later than 30 days before the beginning of the basis period (BoBP). The tax estimate not less than 85% of the previous YA’s tax estimates.

How long does the DG have to raise an additional assessment?

The DG is given 5 years from the end of the relevant YA to raise an additional assessment. Queries or a tax audit do not extend this 5-year period.
Fraud, wilful debt and negligence no time bar.

What details must be included in the appeal?

The appeal must set out in sufficient detail the grounds of appeal on the specific items of appeal. It is addressed to the Special Commissioners of Income Tax (SCIT for yr 2021, the TAT).

By when should individuals with non-business income file Form BE?

Individuals with non-business income must furnish Form BE by 30 April of the following year.(4 months)

When must companies, LLP, and trusts file their annual tax returns?

Companies, LLP, and trusts must furnish the annual tax return within 7 months of the close of the accounting period.

What are the penalties for incorrect return with prosecution under S113?

RM1,000-10,000 and/or 2 x tax undercharged.

How is the tax estimated payable for existing companies, LLPs, and trusts?

Payable on the 15th of every month, starting from the second month of the basis period. The tax estimate may be revised in the 6th, 9th, and 11th month of the basis period.

What is the requirement for a newly commenced company, LLP, or trust regarding tax estimates?

If first basis period is at least six months long = estimate of tax furnished within three months from the date of commencement of operations. Tax installment paid starts on the 15th of the 6th month.

If basis peiod less than six months = no estimates needed until next YA

What are the duties of employers regarding MTD and employee returns?

Deduct MTD from remuneration.
Furnish Form E by 31 March.
Prepare Form EA by end of February.
Notify DG one month before an employee leaves Malaysia for more than 3 months.
Notify DG within 30 days of an employee's death.
not later than 1 month of new employee commencement
not later than 1 month before cessation of staff

What is the taxpayer's obligation regarding tax payment amidst an appeal?

Amidst the appeal, payment on the NA still has to be paid. The taxpayer is obliged to settle the tax in full within 30 days of the date of the notice of assessment, notwithstanding that he has lodged an appeal.

How long must business records be kept for timely submission of returns?

Business records must be kept for 7 years after the end of the relevant year (e.g., until 31.12.20x14 for 30.6.20x7 return).

What is required if gross annual business takings exceed RM150,000?

Printed receipts must be issued serially numbered for every sum received from business activity.

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ATX

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