On 2 November 2018, a new special voluntary disclosure programme (SVDP) was announced by the Minister of Finance during the 2019 budget, to encourage taxpayers to voluntarily disclose their previous undeclared income accurately and to settle tax arrears.
The programme was announced in view of Malaysia’s participation in the automatic exchange of information with foreign tax authorities, where the Inland Revenue Board (IRB) should have already received the first batch of information on the bank accounts in foreign countries held by Malaysian tax residents. As such, the SVDP provides taxpayers with an opportunity to report and pay Malaysian tax on undeclared income.
Under the SVDP, any taxpayer who makes a voluntary disclosure during the period from 3 November 2018 to 30 June 2019 will be offered reduced penalty rates. The IRB is expected to accept the voluntary disclosures in good faith, where a further review will not be made on the information disclosed by the taxpayer, unless additional information is received from third parties indicating otherwise.
Malaysia has in the past implemented several tax amnesty programmes, the last of which expired on 15 December 2016.
Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by emailing Danian Zhang at danian.zhang@bakermckenzie.com.
