Starting from 1 Jan 2018, the Inland Revenue Board Malaysia (IRBM) will impose a 100% penalty on the tax of individuals and companies dodging payment or filing incorrect income tax returns.
At present, the usual maximum penalty rate imposed on offenders is 45%.
It is expected that IRMB will be conducting extensive tax audit operations to enforce the requirements of the Income Tax Act 1967.
Generally, there are 2 types of tax audits:
Desk Audit – Desk audits and analysis are usually conducted at the IRBM’s office. The selected taxpayer will be notified in writing where certain documents and information such as accounts, audit reports, tax computations and tax returns are required to be submitted to the appointed officer. Upon completion, tax findings and adjustments would be communicated vide written correspondence to the taxpayer or tax agent.
Field Audit – Field audits are normally conducted at the taxpayer’s business premises. The field audit officers are authorised to request for relevant documents from the taxpayer, and these may include the full set of accounts, ledgers, journals, supporting documents such as invoices, claims, travel records, contracts, etc. Upon completion, tax findings and adjustments would be communicated vide written correspondence to the taxpayer or tax agent.
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Disclaimer: Every effort has been made to provide accurate information. However, the information and regulations contained in this article are subject to changes and amendments by the relevant authority at any time. As such, the information in this article may not be current.
And the information provided in this article is general commentary only and shall not be considered as advice or recommendation. As all tax situations are specific to their facts and will differ from the situations in this article - if you have specific tax questions you should consult a licensed tax agent.