TAX UPDATES

Companies with financial year ending 31 January 2018, 28 February 2018 and 31 March 2018, which failed to file the Income Tax Return Form (ITRF) for the Year of Assessment (YA) 2018 may participate in SVDP.
These companies will gain reduction in the penalty rate from 300% to either 10% or 15%, depending on the phase the declaration is made. (The deadline to avail of the 10% penalty rate has expired on 31 March 2019, therefore any declaration made between and 30 June, the penalty rate will be reduced to 15%)
Upon declaring, any tax payable due must be paid before the end of the SVDP programme on 30 June 2019.

Companies with financial year ending 31 January 2018, 28 February 2018 and 31 March 2018 which have filed the Income Tax Return Form (ITRF) for the Year of Assessment (YA) 2018 prior to the announcement of SVDP made during 2019 Budget may participate in SVDP for YA 2018 and previous YA.
Taxpayers whose previous SVDP application was declined, may re-apply to join the programme.
A penalty rate of 45% will be imposed upon the end of the SVDP programme. This is based on the existing audit framework.

Failure in updating personal information and bank accounts may result in the failure to complete the tax refund process.
Taxpayers are advised to update their latest personal banking information in the annual Income Tax Return Form (ITRF). This information can also be updated via the e-Kemaskini system or the Feedback Form which can be accessed online at any time through www.hasil.com.gov.my
Starting 01 January 2020, income tax refunds will be fully made using e-payment.

Income received from employment exercised in Singapore is not liable to tax in Malaysia because that income is not derived from employment in Malaysia.
For an individual residing in Malaysia for a period exceeding 183 days, the individual is deemed to be a resident for tax purposes in Malaysia under the ITA 1967.
However, if the said individual does not receive any income deriving from Malaysia and only receives employment income derived from Singapore, then the individual is still not liable for tax in Malaysia.
The resident status of an individual in Malaysia will not automatically result in the income received by the individual to be subjected to Malaysian tax laws.

Special Voluntary Disclosure Programme (SVDP) is a new initiative launched by the government to offer tax solutions to those who have bank accounts overseas from income generated from within Malaysia but the income has yet to be reported to the IRBM.
SVDP offers a reduction in the penalty rate if a declaration is made between these two phases: -

i) 03 November 2018 until 31 March 2019 – a reduction from 300% to 10% (EXPIRED)

ii) 01 April 2019 until 30 June 2019 – a reduction from 300% to 15%

Malaysia, together with more than 100 countries, have signed an agreement to partake in the Automatic Exchange of Information (AEOI) initiative under the Organisation for Economic Co-operation and Development (OECD) on financial information, particularly bank account ownership and has begun receiving this information from September 2018.
Letters and e-mails to taxpayers with bank accounts overseas are also in the process of being issued by IRBM. Therefore, the government calls on taxpayers with overseas bank accounts who receive these notifications from IRBM to immediately come forward to any IRBM branch to provide clarification and subsequently partake in the SVDP if necessary.
However, at the same time, the government welcomes voluntary disclosures (if any) from taxpayers who do not have overseas bank account but still have income derived from Malaysia yet to be reported to IRBM. Taxpayers in this category are still eligible for the reduced penalty rate of 10% or 15%, should they join the SVDP.
To those who have made voluntary disclosures through this programme for Year of Assessment 2017 and prior Years of Assessment, IRBM will accept the declaration made in good faith and no audit or investigation will be carried out in the future for the period in which the declaration was made.