of The Voluntary Declaration Programme (SVDP) by the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department (RMCD) is an amnesty programme that allows taxpayers to declare undeclared or underdeclared income without any additional penalties.
The program ends Friday (May 31). Time is very short for taxpayers who were not in the program but realize they may have shortfalls on past returns.
SVDP for the purposes of income tax, real estate capital gains tax and stamp duty can be made for all years up to assessment year 2021. SVDP for RMCD is permitted only for sales tax and service tax (both pre-2015 and post-2018) and goods and services tax (2015-2018). SVDP for Customs is available for sales tax and service tax assessment periods up to February 2023. Customs duty and excise duty are not included.
What should you do?
All taxpayers are welcome to participate. For individuals, this is a great opportunity to review any claims for tax deductions or exemptions that you have applied for in past years and see if you can support these claims with relevant documentation. Individuals should also review their tax situation to recall miscellaneous income, such as fees or charges received for services rendered, income received from occasional speaking engagements or events, etc. If you do not have the supporting documentation or have not declared these incomes, For this If you have miscellaneous income, now is the time to declare this income.
Other taxpayers, especially corporate taxpayers, should immediately check their accounts if they have under-declared income or over-declared expenses, or if they have taken a controversial position. This is an opportunity to use the SVDP to declare under-declarations and avoid lengthy audits in the future.
If you have been indulging in practices of under-reporting your income such as inflating stocks at the end of the year, buying fictitious invoices, claiming non-existent expenses or deducting bribe payments, now is your chance to come out in the open and pay the extra tax without penalty and reap the benefits of deferred tax.
It is common for directors and officers working for a company to inadvertently forget to declare benefits and perks they receive from the company. Correcting this situation during the SVDP can be helpful.
Under the SVDP of RMCD, returns need to be filed based on the tax period return of sales tax, service tax and GST. The types of under-declaration here include non-declaration of import service tax, misuse of exemption, non-compliance with exemption conditions, misclaiming of exemption, inter-company or group exemption, etc.
Please declare the correct amount
It is important that your return is complete and supported by proper procedures and documentation. If the tax authorities want to know the amount of your return, you must be able to explain it. The tax authorities have stated that they will accept returns in good faith, so they are unlikely to dispute your return. However, if your return is fraudulent, the IRB or RMCD may open a case for a thorough investigation.
However, an IRB or RMCD must have solid evidence to reopen an SVDP case. It is extremely rare for an IRB or RMCD to reopen an SVDP case. This is evidenced by the 2019 IRB SVDP.
Four days is a very short time to enroll in the SVDP, but it is possible.
This article was contributed by SM Thanneermalai, managing director of Thannees Tax Consulting Services Sdn Bhd (www.thannees.com).
