SPVD has been extend to 30th September 2019.

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On 7th April 2019, our government has announced that the ‘Special Program for Voluntary Disclosure’ (SPVD) has been extend to 30th September 2019. The Inland Revenue Board of Malaysia (IBRM) has issued its own guidelines for this special program under ‘Operational Guidelines No.1/2019‘ issued on 24th April 2019 which supersede the earlier guideline which is Operational Guideline No. 1/2018.  This is due to overwhelming response from tax payer to make voluntary disclosure in which the 10% penalty will be extend to 30 June 2019 and 15% will be on the period of 01 July 2019 to 30 September 2019.

Here we summarised the important points that the tax payer should know when electing for SPVD based on the Operational Guideline No.1/2019 issued by them.

This program is eligible to all tax payers whom :-

i. Haven’t register as a tax payer at IBRM branches.

ii. Registered as a tax payer but haven’t report their income. (Haven’t submit the income tax return form)

iii. Income Tax Return has been submitted but was wrongly submitted.

iv. Instruments has not been stamped.

This Special Program covers voluntary disclosure and payment within the stipulated period on:-

 i.  Income not previously declared / under declared, expenses over claimed / not allowed and reliefs / deductions / rebates over claimed for YA 2017 and preceding years;

ii.  Gains on disposal of assets (real properties and shares in real property companies); and

iii.  Stamping of instruments not previously stamped after 6 months from the stamping period.

iv. Cases under tax audit or tax investigation on which SPVD are subject to audit findings.

v. Declaration of income from 31 January 2018 to 31 March 2018 which applies to above qualification.

Stipulated period :-

Voluntary disclosure can be made at any time commencing from 03rd November 2018 until 30 September 2019.

The updated reduced rate of penalty are as follow :-

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The payment has to be made in the followings manner :-

i. Tax payer must settle their tax as follows :

Period of Voluntary Disclosure	Payment to be Made On or Before
03/11/2018 – 30/06/2019	01/07/2019
01/07/2019 – 30/09/2019	01/10/2019

ii. If the taxpayer fails to settle the tax in full at the end of the stipulated period on 01/06/2019 or 01/10/2019, an increase in tax will be imposed based on the prevailing provisions of the law. If tax arrears are still unpaid, legal action will be taken accordingly.

Other important notes to be taken :-

i. Inland Revenue Board Malaysia(IBRM) will accepts all SPVD in good faith. However, the tax computation will be checked to ensure accuracy.

ii. Tax Payer must disclose all taxable income under this program.

iii. All voluntary disclosures of income for year of assessment 2017 and preceding years of assessment will be assessed based on the year in which the income is received / receivable.

iv. Where the year to which the income relates cannot be verified, the reporting of the income in the year of assessment 2017 may be allowed. The ITRF / PTRF for preceding years of assessment still has to be submitted by entering the amount zero (“0”) in the income column.

v. All voluntary disclosures for companies with accounting year ending on 31 January 2018, 28 February 2018 and 31 March 2018 is to be assessed based on the year in which the income is received / receivable.

vi. Audit / investigation will not be carried out on the years of assessment where voluntary disclosure has been made.

vii. The implementation period of this Special Program also applies to transfer pricing issues, however penalty will be assessed according to their own standard and regulations.

viii. This Special Program does not apply to voluntary disclosures made involving non-taxable cases, reduced assessment or repayment or cases where criminal investigation has commenced or prosecution proceedings as a result of criminal investigation has been instituted in courts pursuant to the provisions of the act.

Penalty Rate After The Special Program Period  :-

i. Failure to comply will be subjects to penalties up to 45%.

ii. The surrendering company that gives incorrect information may be required under paragraph 44A(9)(b) of the ITA 1967 to pay a penalty of 100%, which is equal to the amount of tax undercharged.

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