Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

April 12, 2019
2019-5526

Malaysia updates the Special Voluntary Disclosure Program

Executive summary

Malaysia’s Ministry of Finance (the MOF) and Inland Revenue Board (the IRB) issued several media releases on the Special Voluntary Disclosure Program (the Special Program) introduced in the 2019 Budget.1 The Special Program offers reduced penalty rates for taxpayers to voluntarily disclose any unreported income, including income maintained in offshore accounts, for income tax, petroleum income tax and real property gains tax purposes. The reduced penalty rates apply to stamp duty as well. The Special Program was initially meant to run from 3 November 2018 to 30 June 2019.

This Alert summarizes the key aspects of the media releases.

Detailed discussion

Extension of the Special Program

Due to the overwhelming responses from taxpayers, the voluntary disclosure under the Special Program will be extended by three months. The current disclosure periods and corresponding penalty rates are as follows:

  • For disclosures made between 1 November 2018 to 30 June 2019: 10%
  • For disclosures made between 1 July 2019 to 30 September 2019: 15%

Update on penalty rates after the Special Program

It was previously announced that penalties for disclosures made after the Special Program expires would be 80% to 100%/300%.2 In the media releases, both the MOF and IRB have now stated that the minimum penalty rate for disclosures made after 30 September 2019 is 45%.

Others

  • Information received under the Special Program will be accepted in good faith and no further review or investigation will be undertaken.
  • Companies with financial year ended on 31 January 2018, 28 February 2018 or 31 March 2018 are eligible to participate in and enjoy the lower penalty rates offered under the Special Program if they had submitted their tax returns for the year of assessment 2018 (YA 2018)3 before the Special Program was announced or if they have yet to submit their tax returns for YA 2018. In addition, companies with these year-ends which have had their previous applications under the Special Program rejected, are encouraged to resubmit their applications.

Endnotes

1. See EY Global Tax Alert, Malaysia releases 2019 Budget, dated 4 December 2018.

2. Where no prosecution has been instituted, the maximum penalty rate of 300% applies to taxpayers who fail to submit their tax returns; whereas the penalty rate of 100% applies to taxpayers who fail to report the correct income.

3. This generally refers to an accounting period ending in 2018.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Tax Consultants Sdn Bhd, Kuala Lumpur
  • Amarjeet Singh | amarjeet.singh@my.ey.com
  • Anil Kumar Puri | anil-kumar.puri@my.ey.com
  • Asaithamby Perumal | asaithamby.perumal@my.ey.com
Ernst & Young LLP, Malaysia Tax Desk, New York
  • Meng Hui Chua | meng.hui.chua1@ey.com
Ernst & Young LLP, Asia Pacific Business Group, New York
  • Chris Finnerty | chris.finnerty1@ey.com
  • Kaz Parsch | kazuyo.parsch@ey.com
  • Bee Khun Yap | bee-khun.yap@ey.com

ATTACHMENTS

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more