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Chapter 1- part V - Coggle Diagram
Chapter 1- part V
Appeal
If a person is aggrieved by an assessment or notice of non-chargeability made in respect of him by the DGIR can appeal to the SC against that assessment
This can be done by giving a written notice of appeal in the prescribed form, stating grounds of appeal and such other particulars as may be required by the DGIR, within the stipulated time
In the case of advance assessment, the valid time is the first 3 months of the year of assessment following the year of assessment for which the assessment was made
The specified time is within 30 days of the service of the notice of assessment
Extension of time
Within 7 years after the end of the period, submit to the DGIR a written application in the prescribed form
Tax appeal against deemed assessment
The taxpayer can only make appeal at the time when the assessment is made
Deemed assessment/ deemed notice of non-chargeability on tax treatment of PR/any practice of the DGIR
Examples of rulings or practice
Private or advance rulings
Guidelines issued by the DGIR
Slide presentation given by officer of the IRB
Cases where decisions have been made by the courts and the SC
Any other written evidence
Tax appeal against assessment raised by the DGIR
Tax appeals on any ground of disagreement are still applicable to
Assessments, additional assessments, or advance assessments or notice of non-chargeability made by the DGIR as a result of the tax audit
Assessment made under section 90(3) based on the best judgment if a taxpayer failed to submit his tax return form
Tax appeal against an estimted assessment
It is allowed by submitting Form Q together with income tax return form within 30 days from the issuance of the said assessment
Section 107C
Every company is required to furnish an estimate of its tax payable not later than 30 days before the beginning of its basis period
The form is Form-eCP 204
If a company has just commenced operation and the basis period is not less than 6 months, the estimate of the tax payable will be furnished within 3 months from the date of the commencement of the operations
Companies are allowed to furnish estimates not less than 85% of estimates or revised estimates of last year
If payments by instalment, then the company is required to pay estimates of tax payable by the 15th day of every calendar month, equally, beginning from the second month of the basis period for which the estimate is furnished
If it is a new company other than SME, the instalment shall be made equally in every month on the 15th, starting from the 6th month of the basis period
The number of instalment will be determined based on the number of month in the basis period for a year of assessment of a company
The company may furnish revised estimate on the 6th or 9th month of the basis period for a year of assessment
Amendment of income tax return
It is only allowed once, in respect of the amounts or any additional income tax payable or the amount which has been or would have been wrongly repaid to him
Applies to any person who has furnished income tax return under section 77 or 77A
Must be made after the expiry of the end of the date which the income tax return is supposed to be sent to the DGIR, but within 6 months from this date
Let say a person submit his income tax return on 20 April, then he may start to amend starting on 1 May to 31 October
Amended tax return should specify
Amount or additional amount of chargeable income and therefore amount or additional tax payable
The amount of tax or tax payable on the tax which has or would have wrongly repaid to a person
Charge of 10% of the amount or additional amount of tax payable
Other particulars required by the DGIR
Where the DGIR has made assessment under section 91, no amendment will be allowed for income tax return furnished
Where a person has amended the income tax return furnished, then it is deemed to be an assessment under section 91A
Return of income by every company, LLP, trust body or co-operative society
For each year of assessment, furnish income return to the DGIR within 7 months from the end of accounting period
Where there is a change in the accounting period, the return shall be furnished and send to the DGIR within 7 months from the date following the close of the accounting period
The prescribed form is Form C
The financial statements must be made in accordance with The Companies Act 2016
Through electronic transmission that is e-filing
Tax collection
Payment of income tax
Upon the notice of assessment or composite assessment, pay the tax liability within 30 days from that date
The place the payment has to be made has been specified in the notice
Due dates of payment of balance of tax liability
Companies etc
Within 7 months after the accounting date
Individuals
30 April
Individuals with business
30 June
Penalty
10% of the balance tax unpaid
If payment by instalment, then if any one of the instalment fails, then the balance shall be payable on that date immediate, plus 10% of tax unpaid
The DGIR may remit the whole or part of the penalty and where the penalty that has been remitted was paid, the DGIR shall repay that amount to the taxpayer
Section 103(A)
Any tax or additional tax payable under an amended return shall be due and payable on the day the amended return is furnished
Whether or not that person appeals against the assessment or additional assessment
Tax payable notwithstanding institution of proceeding under any other written law
If there is any institution of proceeding under any written law, that does not relieve any person for the payment of any tax, debt or other sum for which he is or may be liable to pay under the ITA
Finality of assessment
No valid notice of appeal against the assessment or notice of non-chargeability has been given within the stipulated time
An agreement has been arrived at with respect to an assessment being appealed under section 101(2)
An assessment has been determined on appeal and there is no right of further appeal
A valid notice of appeal against an assessment has been given, but the appellant dies before the hearing of appeal by Special Commissioners is commenced or completed and no personal representative of the estate of the deceased appellant applies to the SC within 2 years after the death to proceed with completing the hearing
Special commissioners
The DGIR may forward the appeal, including the appeal of notice of non-chargeability to the SC if it is not possible for the appeal to be dealt with between the appellant and the DGIR
It must be forwarded to the SC within 12 months of the date of receipt by the DGIR
If the review cannot be completed within 12 months, the DGIR may apply for an extension of 6 months from the MoF. It must be made 30 days before the expiry of the 12 months period
Tax appeal tribunal
The SC shall be merged with the Custom Appeal Tribunal known as the tax appeal tribunal
Any income tax appeal shall be submitted to the tax appeal tribunal from year 2021
Notice
For new employees
The employer is required to inform the DGIR in the prescribed form not later than 30 days from the date of commencement of employment, if that new employee is or likely to be chargeable to tax
To be given for termination
Two conditions
The employee will stop working
Not later than 30 days before the end of employment
The employee dies
Not later than 30 days after the notification of the death of that person
Where the DGIR is satisfied with the reasons given, the notice can be acceptable even on or after the cessation of employment or even after 30 days after the employee died
No notice given in the prescribed form on the cessation if
Income of that employee is subject to monthly tax deduction
Where total monthly remuneration of the employee is below the minimum amount that is subject to the monthly tax deduction, and
Where it is known to the employer that the employee is not retiring from any employment
Leaving the country for more than 3 months
If the person is about to leave or intends to leave Malaysia for a period exceeding 3 months, the employer, not later than 30 days before the expected date of departure give notice
The DGIR may waive the application of section 83(4) to that employee
Money payable to employee
The employer shall not pay the amount to the employee without the permission of the DGIR
Condition
The employee is about to leave Malaysia for more than 3 months and have no intention to return back
The amount which is or may be payable to employee who has ceased or is about to cease employment
However, the employer may pay the amount after 90 days of the date of notice of termination is received by the DGIR
The employer can either pay the money to the employee or the collector of IRB within 90 days period, as directed by the DGIR
Particulars of payment made to an agent
Given to its agents, dealers, or distributors, a copy of Form CP 58, containing particulars of name, address and payment, be it in cash or in kind, made to them
The form must be provided not later than 31 March of the following year
Company must keep the original copy in safe custody for inspection by the DGIR
Failure to prepare and render constitute an offence
SME
Def
Resident and incorporated in Malaysia with paid up capital of not more than RM2.5m at the beginning of the basis period for a year of assessment
Where the SME first commence operation in a year of assessment, the SME is not required to furnish an estimate of tax payable or make instalment payments for a period of 2 years
Provided that it does not control or is not controlled directly or indirectly by another company which has paid up capital of more than RM2.5m in respect of ordinary shares
Where it has no basis period for the first and second year of assessment, the company is not required to submit its tax estimates for the first 3 years of assessment
Tax return and the payments of tax payable should be made within 7 months after the end of the accounting period of the company
10% increase is due to
Tax is payable by that company
No estimate is furnished and no direction is given by the DGIR to make payment by instalment
No prosecution under section 120 has been instituted in relation to failure to furnish tax estimate
Where the person has paid the penalty, then he shall not be charged on the same offence under section 120
Using non-prescribed form
Incorrect particulars
Supplementary forms not submitted
Using another taxpayer’s form
Incorrect / Incomplete accounting period
Incorrect amount / computation
Incorrect / incomplete declaration
Mutual Agreement Procedure
Where a person makes an appeal under the same issue on tax appeal made under section 99 of Form Q, the appeal via the Form Q shall be suspended
A taxpayer may request to forward the Form Q through the DGIR, to the SC within 30 days of the determination of the MAP
The DGIR shall within 3 months of receiving the request forward the appeal (Form Q) to the SC
Returns by employer
Form E, not later than 31 March in the year immediately following the relevant year
Contents
No of employees
No of employees subject to Monthly Tax Deductions scheme
No of new employees employed
No of employees resigned
No of employees resigned and left Malaysia
Such other details as may be required by the DGIR
Statement of remuneration to the employees (Form EA/EC)
By the end of Feb in the year immediately following the relevant year
Contents
Relevant particular of the employees
Full amount of gross employment income
Pension, annuity or periodical payments
Total amount of tax deductions made on employment income
EPF or any other approved fund or scheme
Details of payment of arrears for prior years' employment income
Exempt allowances perquisites, gifts, and benefits
Such other particulars as may be required by the DGIR
Relief for error or mistakes and other appeal
Where the assessment is excessive
Before the assessment become final and conclusive
Within 5 years after the end of the year of assessment within which the assessment made, apply to the DGIR for relief
A claim for error or mistake shall be made in the same manner as notice of appeal against an assessment
If the taxpayer is not satisfied with the rejection for claim, he may appeal to the SC and pursue his rights of appeal
Relief for appeal other than error or mistake
Deduction not allowed for withholding tax not due to be paid on the day a return is furnished. To appeal within 1 year after the end of the year the payment is made
An exemption, relief, remission, allowance or deduction is granted after the year of assessment in which the return is furnished. To appeal within 5 years after the end of the year the Gazette published
Approval for any exemption, relief, remission, allowance or deduction is granted after the year of assessment on which the return is furnished. To appeal within 5 years after the end of the year approval is granted
Tax appeal against the decision of the DGIR
If the taxpayer is aggrieved, he may within 6 months after being informed of the decision request the appeal to be forwarded to the SC.
The DGIR shall within 3 months after receiving the request forward the appeal to the SC
The DGIR may direct the instalment payments for the estimated tax, where the company
Fails to furnish the estimated tax payable within 30 days from the commencement of the new basis period
Furnished the estimated tax payable of less than 85% of the revised tax, or tax estimate if there is no revised estimate
Notifies a change in accounting period other than in the sixth or ninth month if the basis period and submits the revised estimate of tax payable for the year of assessment
Self assessment system
Where the DGIR is deemed to have made an assessment
The tax return shall be deemed to be a notice of assessment, and
The deemed notice of assessment shall be deemed to have been served on the person on the day on which the DG is deemed to have made the assessment
Step
Determine taxable income
Submit their income tax return
Compute and pay their income tax liabilities
Notice of non-chargeability
This may be issued by the DGIR, together with the computation, if
There is no adjusted income, statutory income, aggregate income or total income from any sources of income
Exemption is granted under ITA or the Promotion Of Investment Act 1986
There is no statutory income from a business source but an assessment has been made on income from other sources
With regard to the business source, the computation of the adjustments should be made if any
The person, if does not agree with the computation made by the DGIR, may appeal to the SC within 30 days of the date being notified
The notification is treated as a notice of assessment and the provision for tax appeal shall apply equally with modifications
Where the appeal is not valid, then it is deemed to be final and conclusive
Failure to submit income tax return
Penalty imposable without prosecution
Fail to submit return within the time limit or to give notice of his chargeability for a year of assessment
Estimated assessment is made in accordance with section 90(3), together with the penalty imposed
Penalty of three times the amount of tax payable for that year of assessment, where the DGIR decides not to prosecute
Where the payment is above the penalty or where the penalty is abated or remitted under section 124(3), so much of the penalty as has not been abated or remitted, he shall not be liable to be charged on the same facts with an offence under section 112(1)
The penalty imposed under section 112(3) is included in the notice of assessment and recoverable as tax
The penalty should be 3 times more than the total tax charged for the year of assessment
Additional penalty imposed
112(4)
In addition to section 112(3)
Fine imposable on conviction
200-20,000 or to imprisonment for a term not exceeding 6 months or both - section 112(1)
The accused person has to prove that the return has been made
Failure to submit for any 2 years of assessment or more
Not less than 1000 and not more than 20000 or to imprisonment for a term not exceeding 6 months or both, and
A special penalty equal to 300% the amount of tax determined on best judgment by the DGIR
Further powers by the court
112(2A)
To empower the court to further order a person convicted of an offence under 112(1) to comply with the relevant provision