catatan bengkel non-technical operational & … of... · dan kesalahan berulang yang dilakukan...

of 99

CATATAN BENGKEL NON-TECHNICAL OPERATIONAL &

COMPLIANCE ISSUES LHDNM BERSAMA PERSATUAN

AKAUNTAN DAN PENGAMAL PERCUKAIAN- BIL. 2/2016

Tarikh : 28 Julai 2016 (Khamis)

Masa : 9:30 pagi

Tempat : Bilik Mesyuarat Laksamana 1, Aras 1, Menara Hasil, Cyberjaya.

Kehadiran:

1. WAKIL LHNDM

1. YBhg. Datuk Sabin Bin Samitah Timbalan Ketua Pengarah (Operasi Percukaian) Pengerusi

2. En. Mahmood Bin Daud Pengarah Jab. Operasi Cukai (JOC)

3. En. Abdul Manap Bin Dim Pengarah Jab. Pematuhan Cukai (JPC)

4. En. Mohd Jaafar Bin Embong Pengarah Jab. Pungutan Hasil (JPH)

5. En Mohammed Noor Ahmad Pengarah Jab. Percukaian Antarabangsa (JPCA)

6. En. Roszamman Bin Md. Nawi Pengarah Jabatan Siasatan (JS)

7. En. Abu Tariq Jamaluddin Pengarah Jab. Resolusi & Pertikaian (JRP)

8. Pn. Hazlina Hussain Pengarah Jab. Sekretariat Lembaga dan Advisori Perundangan (JSLAP)

9. En. Sohaimi Sabri Pengarah Bhgn.Operasi Dasar (BOD JOC)

10. YM Raja Kamarul Zaman bin Raja Musa

Wakil Pengarah Jab. Sivil & Pendakwaan (JSP)

11. Pn. Umi Kalsom Harun Pengarah Bhgn. Dasar Pungutan (BDP JPH)

12. En. Muhammad Mustafa Said Wakil Pengarah Jab. Khidmat Korporat (JKK)

13. Pn. Julie Yeap Wakil Jabatan Dasar Percukaian.

of 99

14. Pn. Haifa Amanatul Penolong Pengarah, JPS

15. En. Mohamad Nizar Mokhtar Urus setia Mesyuarat

16. Pn. Piramanayaki Arunachalam Urus setia Mesyuarat

2. WAKIL PERSATUAN

1. En. Aruljothi A/L Kanagaretnam Wakil CTIM

2. Pn. Seah Siew Yun Wakil CTIM

3. Pn. Phan Wai Kuan Wakil CTIM

4. Pn. Theresa Goh Wakil CTIM

5. En. Lim Kok Seng Wakil CTIM

6. En. Thong Vee Kean Wakil CTIM

7. Pn. Carol Eng Wakil MIA

8. En. Sam Soh Siong Hoon Wakil MIA

9. Pn. Azlina Zakaria Wakil MIA

10. Pn. Wong Yok Chin Wakil MIA

11. Pn. Woon Yoke Lee Wakil MICPA

12. En. Tai Lai Kok Wakil MICPA

13. Pn. Liew Ai Leng Wakil MICPA

14. Pn. Tan Yu Yin Wakil MICPA

15. Pn. Noorshamsiah Ahmad Wakil MATA

16. Pn. Fadhlina Mohd Zakri Wakil MATA

of 99

1. UCAPAN PENDAHULUAN PENGERUSI

1.1. Pengerusi memulakan sesi bengkel dengan ucapan salam dan selamat

sejahtera serta mengalu-alukan kehadiran semua wakil dari pihak

badan-badan professional - CTIM, MIA, MICPA, MATA dan Pengarah-

pengarah Jabatan LHDNM.

1.2. Pengerusi juga memaklumkan pihak LHDNM telah menyediakan

jawapan ke atas isu-isu yang telah dikemukakan oleh pihak CTIM pada

15 Jun 2016. Walau bagaimanapun, jawapan ini tidak diedarkan

supaya isu-isu ini boleh dibincangkan bersama.

1.3. Ini memastikan jawapan balas yang diberikan adalah memenuhi

kehendak badan professional semasa dialog agar lebih difahami dan

dipersetujui oleh pihak badan porfessional selepas perbincangan

dengan lebih terperinci dalam sesi bengkel ini.

1.4. Pengerusi telah menjemput Encik Aruljothi Kanagaretnam, Presiden

CTIM merangkap ketua rakan-rakan dialog dari badan-badan

professional yang hadir, untuk menyampaikan ucapan alu-aluan.

1.5. Seterusnya untuk memulakan dialog, Pengerusi menjemput Puan Seah

Siew Yun, wakil dari CTIM untuk membentangkan isu-isu berbangkit

untuk dibincang bersama-sama pihak LHDNM bagi mendapatkan

kefahaman dan persetujuan penyelesaian ke atas isu-isu tersebut.

of 99

2. PERBINCANGAN ISU-ISU BERBANGKIT

Memorandum on Issues for BENGKEL Non-Technical Compliance & Operational Issues with IRBM No. 1/2016

1. Penalty rates imposed following the second time of audit onwards

(Item 3 on page 18-19 of the IRBM’s responses in Bengkel 1/2016)

Example – Clarification is needed on such penalty rates and what

would be regarded as second time of audit

The penalty rates which can be imposed following an audit are listed in

the LHDNM’s Tax Audit Framework. These include the penalty of

100% under S.113(2) of the ITA imposed following the second time of

audit for Monitoring Deliberate Tax Defaulter (MDTD) cases.

The penalty rates which can be imposed following the second time of

audit onwards for non-MDTD cases are not available to the public.

Suggestions/Recommendations

We would like to seek clarification on the following:

What are the penalty rates which can be imposed following

the second time of audit onwards?

In the case where a transfer pricing audit or a tax

investigation was initially undertaken on a company, would

a separate tax audit undertaken subsequently on that

company be regarded as the second time of audit onwards?

Jawapan LHDNM

Audit kali kedua bagi kes bukan MDTD, kadar penalti adalah seperti

yang dinyatakan dalam Rangka Kerja Audit Cukai.

Garis Panduan untuk struktur penalti baharu akan dikeluarkan.

Feedback/comments on the IRBM’s responses above

a. According to the IRBM’s response, the penalty rates for the

second time audit (other than MDTD cases) are as stated in the tax

audit framework. We understand that this means that the penalty

rates in Table I and Table II on pages 16 and 17 of the IRBM Tax

Audit Framework (Amendment 1/2015) are applicable to second

of 99

time audit (other than MDTD cases). Kindly confirm that our

understanding is correct.

For second time audit (other than MDTD cases), can the IRBM

exercise its discretion to impose higher penalty rates than those stated

in Table I and Table II? If so, what would those penalty rates be and

how are they determined?

b. We would inform that the IRBM has not responded to our

clarification sought on the following (please refer to page 19 of the

IRBM’s responses in Bengkel 1/2016):

In the case where a transfer pricing audit or a tax investigation

was initially undertaken on a company, would a separate tax audit

undertaken subsequently on that company be regarded as the

second time of audit onwards?

We would be pleased if the IRBM could provide a reply to our query

above.

Maklumbalas LHDNM untuk Bengkel bil.2/2016:

Kadar penalti untuk pengauditan kali kedua kes-kes biasa (selain

dari kes MDTD) adalah sama berdasarkan rangka kerja audit.

Walau bagaimanapun, sekiranya pengauditan kali kedua adalah

berkaitan kes MDTD, LHDNM akan memaklumkan melalui surat

kadar penalti yang dikenakan mengikut struktur penalti MDTD

berdasarkan pertimbangan yang sewajarnya atas isu penemuan

dan kesalahan berulang yang dilakukan oleh pembayar cukai.

Namun, garis panduan dan struktur baharu kadar penalti akan

dikeluarkan.

Manakala untuk kes audit pindahan harga atau kes penyiasatan,

struktur penalti yang dikenakan adalah berdasar rangka kerja

audit pindahan harga atau rangka kerja penyiasatan. Sekiranya

LHDNM mengambil tindakan audit ke atas pembayar cukai

selepas kes audit pindahan harga atau kes penyiasatan

dijalankan, kadar penalti yang dikenakan adalah kadar penalti kali

pertama sebanyak 45%.

of 99

Memorandum on Issues for BENGKEL Non-Technical Compliance & Operational Issues with IRBM No. 2/2016

FILING ISSUES

1. Revision of tax return prior to YA 2014

In recent cases, tax returns prior to YA 2014 were revised because the accounts had just been finalised and there were changes in the figures.

Where there was a reduction in tax due to the lower figures in the finalised accounts, the LHDNM did not accept the revision on the grounds given that tax returns prior to YA 2014 should have been submitted based on audited accounts and hence the figures should not change.

However, where there was an increase in tax due to the higher figures in the finalised accounts, the LHDNM imposed penalties for late filing and incorrect return.

Our comments:

The above revised tax return which resulted in a reduction in tax should not have been rejected due to the following mitigating factors:-

The taxpayer had done his duty and acted in good faith by submitting the original tax return on time even though the accounts had not been finalised. Furthermore, the taxpayer paid more taxes as the original tax return was prepared using higher figures.

The requirement for a tax return to be prepared based on audited accounts was legislated with effect from YA 2014.

The change in the wording of the declaration in the Form C for YA 2014 compared to the Form C prior to YA 2014, to declare that the tax return has been prepared based on audited accounts, supports the contention that there is no requirement to prepare the tax return prior to YA 2014 based on audited accounts.

We would like to seek clarification on the rationale for rejecting the above revised tax return which resulted in a reduction in tax but accepting the above revised tax return which resulted in an increase in tax.

Jawapan LHDNM:

Peruntukan subseksyen 77A(4), Akta Cukai Pendapatan 1967 (ACP)

mengkehendaki pendapatan yang dilaporkan dalam Borang Nyata Cukai

Pendapatan (BNCP) berasaskan akaun beraudit berkuatkuasa mulai TT

2014.

Apa-apa pindaan kepada pendapatan/perbelanjaan/elaun yang dilaporkan

selepas BNCP dikemukakan wajar diterima dan taksiran dipinda dengan

suci hati.

Walau bagaimanapun, memandangkan BNCP yang dikemukakan terdapat

perbezaan dari taksiran asal, pegawai audit akan mengambil tindakan

of 99

audit dan boleh mengeluarkan notis dibawah subseksyen 82(5), ACP 1967

untuk mendapatkan akaun beraudit.

Matters for further discussion in relation to the IRBM’s response above: Reference: CTIM Memorandum dated 25 April 2016 discussed at DESIRE No. 1/2016 on 19 May 2016 - issue #6

Clarification of the facts

The issue raised above relates to the revision of tax returns for the years of assessment before the year of assessment 2014 where there is no requirement that the tax returns must be submitted based on audited accounts.

The reason for the revision of tax returns is because the taxpayer had submitted their tax returns based on management accounts in order to comply with the tax filing deadline under S.77A. The audited accounts were not ready as at the tax filing deadline. Subsequently, the audited accounts were finalized and signed after the tax filing deadline. The financials in the audited accounts differed from the financials in the management accounts. Consequently, the taxpayer revised their tax returns based on audited accounts which resulted in a reduction in tax and submitted their revised tax returns to the IRBM branch. However, the revised tax returns were rejected by the IRBM branch on the grounds that the submission of the tax returns at the tax filing deadline should have been based on audited accounts and hence there is no need for the tax returns to be revised subsequently.

Question

Shouldn’t the IRBM branch accept the submission of the above-mentioned revised tax returns?

Maklumbalas LHDNM untuk Bengkel bil. 2/2016

Pindaan BNCP sebelum YA2014 hendaklah diterima oleh cawangan.

Walau bagaimanapun, memandangkan BNCP yang dikemukakan terdapat

perbezaan dari taksiran asal, pegawai audit akan mengambil tindakan

audit dan boleh mengeluarkan notis dibawah seksyen 82(5) untuk

mendapatkan akaun beraudit.

Pengerusi menjelaskan akaun beraudit hendaklah dikemukakan untuk

diaudit bagi semakan oleh pegawai audit yang memastikan bahawa

perbezaan pelaporan pengiraan cukai adalah betul berdasarkan

dokumen-dokumen sokongan yang dikemukakan, sebelum taksiran

kurangan dibangkitkan.

Apabila pembayar cukai mengemukakan akaun beraudit bersama

pengiraan cukai pindaan selepas tarikh akhir pengemukaan BNCP,

taksiran kurangan yang dibangkitkan adalah taksiran formal yang

memerlukan tindakan tersebut. Ini mengakibatkan sedikit kelewatan

(delay) berlaku untuk membangkitkan taksiran kurangan jika sekiranya

of 99

akaun beraudit dan pengiraan cukai pindaan dikemukakan selepas tarikh

akhir pengemukaan BNCP.

Pengerusi juga menjelaskan bahawa cawangan tidak dibenarkan untuk

menolak BNCP, akaun beraudit dan dokumen-dokumen sokongan yang

hendak dikemukakan oleh pembayar cukai walaupun telah melewati

tarikh akhir pengemukaan BNCP atau sebelum penguatkuasaan seksyen

77A(4).

Pihak CTIM diminta untuk mengemukakan kepada Pengarah Jabatan

Operasi Cukai (JOC) senarai kes-kes berkaitan yang mengandungi

maklumat nama dan nombor fail pembayar cukai serta cawangan yang

telah menolak BNCP agar JOC dapat menyalurkan maklumat tersebut

kepada cawangan-cawangan berkenaan untuk tindakan penerimaan

BNCP yang ditolak.

2. Non-resident branch / permanent establishment with income partially subject to withholding tax

Reference is made to Question 2 on page 12 of the LHDNM Minutes of Operation & Technical Dialogue No.1-2014 held on 17 February 2014, where the LHDNM clarified that a non-resident branch / permanent establishment with income partially subject to withholding tax is required to file the Form CP204 with the tax estimate amount for the portion of the income which is not subject to withholding tax.

In respect of the above, the Institute had sought confirmation from the LHDNM that the amount to be completed under Part C2 [Less: Instalment payments made] of the Form C would be the aggregate of the tax estimate amount paid under the Form CP204 as well as the amount of the tax withheld under Section 107A. In view that the Form C does not have a field for the withholding tax deducted under Section 107A to be set-off against the total income tax charged in Part B8 of the Form C, the inclusion of the withholding tax amount in Part C2 of the Form C would avoid the automatic computation by the system of the penalty for under-estimation of tax payable under Section 107C(10).

The LHDNM had replied as follows:

“Pihak LHDNM akan meneliti isu yang dinyatakan. Penambahbaikan sistem dan Borang CP204 akan dibuat bagi mengatasi isu tersebut. Dicadangkan pembayar cukai memaklumkan dalam

borang CP204 bagi kes tertakluk di bawah seksyen 107A sama ada sebahagian atau sepenuhnya. Borang CP204 akan ditambah baik.”

Our comments:

The recent revision to the Form CP204 to include a check box on whether the non-resident entity’s income is fully subject to withholding tax has not addressed the above-mentioned issue. As such, we would like to request the LHDNM to look into the matter as soon as possible.

of 99

Jawapan LHDNM:

Borang CP204 telah dipinda dengan mengadakan check box bagi

pembayar cukai tidak bermastautin melaporkan pendapatan yang layak

sepenuhnya di bawah cukai pegangan.

Matters for further discussion in relation to the IRBM’s response above:

Reference: CTIM Memorandum dated 25 April 2016 discussed at DESIRE No. 1/2016 on 19 May 2016 - issue #7

Clarification of the facts

The Form C does not have a space to fill in the withholding tax charged under S.107A on the income of the non-resident branch to be set-off against total income tax charged. Furthermore, only the tax instalments paid are set-off against total income tax charged in the Form C. Such tax instalments paid are based on the estimate of tax payable in the Form CP204 submitted which is required to be calculated based on the portion of income which is not subject to withholding tax. This results in a situation where there could be an underestimation of tax payable and consequently penalty imposed under S.107C(10)* even though the non-resident branch had been charged with the withholding tax under S.107A and had paid the tax instalments. * The concern raised here is on imposition of penalty under Section 107C(10) by the

system which compares the estimate submitted with the final tax payable reported in Form e-C.

Request

In view of the above, we would request that the IRBM include a space in the Form C to allow the non-resident branch to fill in the withholding tax charged under S.107A to be set-off against total income tax charged.


Pindaan kepada Borang CP204 akan dibuat mulai tahun taksiran 2019 di

mana satu indikator akan dimasukkan.

Manakala pindaan Borang C di mana wujud ruangan tambahan untuk

bayaran anggaran cukai CP204 dan bayaran cukai pegangan seksyen

107A pada BNCP mulai tahun taksiran 2017.

LHDNM mengambil maklum cadangan pihak CTIM.

of 99

OTHER ISSUES

3. Avenue to revise tax returns

Revised tax computations and tax returns would need to be submitted in the following situation:

Company wanting to claim deduction on payments to non-residents upon payment of withholding tax for previous years of assessment (when the expense was incurred, a deduction was not claimed because of Section 39(1)(f), (i) and (j) of ITA 1967).

Currently, under the ITA, only three sections provide taxpayers with avenues to revise tax returns – Section 99 (Form Q), Section 131 (Form CP15C on error or mistake) and Section 77B (amended return, applicable only when the original tax assessment chargeable income “has been or would have been wrongly repaid” i.e. in cases of understatement).

In the situation described above, in most cases, it is not appealable within the scope of the above three sections. In practice, the LHDNM accepts revisions made by taxpayers whereby affected taxpayers submit a revised tax computation and tax returns. No statutory or prescribed forms are required to be submitted in this case.

Our comments:

i. Please confirm that this method is acceptable to the LHDNM.

ii. If it is not acceptable, will the LHDNM be working with the relevant ministries and lawmakers on introducing new legislation to cover these situations?

Jawapan LHDNM:

Isu yang dibangkitkan ialah mengenai mekanisma yang tepat untuk pembayar

cukai membuat rayuan untuk menuntut perbelanjaan WHT untuk tahun-tahun ke

belakang. Jawapan kepada isu ini ialah LHDNM mengesahkan bahawa pembayar

cukai hendaklah menggunakan peruntukan seksyen. 131, ACP 1967 untuk

menuntut perbelanjaan WHT bagi tahun-tahun kebelakang. Pembayar cukai

boleh menggunakan dua cara menuntut perbelanjaan tersebut, iaitu sama ada

dengan menulis surat atau mengisi Borang 15C.

Oleh itu, Borang Q di bawah seksyen 99 ACP 1967 tidak terpakai. Sehubungan

itu, dengan pengesahan yang diberikan, komen CTIM mengenai perkara (ii)

adalah tidak relevan.

Matters for further discussion in relation to the IRBM’s response above:

Reference: CTIM Memorandum dated 25 April 2016 discussed at DESIRE No. 1/2016 on 19 May 2016 - issue #21

We would like to thank the IRBM for their clarification above on the mechanism and procedure under S.131 for revising the tax return to claim the deduction on deductible expenses where the withholding has been deducted and remitted to the IRBM after the tax filing deadline.

of 99

We noted that the provisions of S.131(1) include the wording “If any person who has

paid tax for any year of assessment alleges that an assessment relating to that year is

excessive by reason of some error or mistake in the return ..”. Technically, the

taxpayer who is revising their tax return to claim the deduction on the said

deductible expenses did not commit an error or mistake in the return submitted by

the tax filing deadline as the deduction could not be claimed at that time due to the

provisions of S.39(1)(f), (i) and (j). As such, we are concerned that there is no legal

basis to revise the tax return to claim the deduction on the grounds of relief in respect

of error or mistake under S.131.

Requests

We would like to request the IRBM to give its comments on our concern above.

Furthermore, as technically a person may only appeal under S.131 if he has paid tax, we would like to seek your confirmation/assurance that a non-tax paying person may also apply for relief under S.131 and revise the tax return to claim the deduction on deductible expenses where the withholding has been deducted and remitted to the IRBM after the tax filing deadline.


Tuntutan perbelanjaan kepada bukan pemastautin boleh dibuat sekiranya

pembayar cukai telah meremitkan bayaran cukai pegangan kepada

LHDNM mengikut peruntukan undang-undang sedia ada.

Rayuan tuntutan perbelanjaan atas cukai pegangan yang telah diremit

untuk tahun-tahun kebelakangan boleh dibuat mengikut peruntukan

Seksyen 131 ACP 1967.

Bagi kes-kes Tidak Kena Cukai (NL) peruntukan seksyen 131 tidak

terpakai. Ini kerana mengikut peruntukan seksyen 131 menyatakan

permohonan relif hanya boleh dibuat sekiranya terdapat taksiran cukai

yang berlebihan disebabkan oleh kesilapan dan kekhilafan semasa

pengemukaan Borang Retan.

Pengerusi menyarankan pandangan pihak CTIM berhubung layanan ke

atas non-tax paying person dan loss making company yang memohon

pelepasan di bawah seksyen 131 perlu dikaji dan diberi pertimbangan

yang sewajarnya oleh Jabatan Resolusi dan Pertikaian (JRP) untuk

dibawa masuk ke dalam pindaan peruntukan Akta Cukai Pendapatan

dalam pembentangan Bajet yang akan datang agar dapat diperkukuhkan

melalui pengenalan seksyen baharu peruntukan undang-undang.

Cadangan pihak CTIM untuk pindaan ke atas seksyen 131 adalah

berkaitan polisi.

of 99

4. Appeal under Section 99 against Form J issued under Section 90(3)

With the introduction of Section 77A(4), tax returns furnished by companies must be based on audited accounts. As such, companies are unable to file their tax returns if the audit of their accounts has not been completed. Thus, when a Form J under Section 90(3) is raised for failure to furnish the tax return, the taxpayer will seek to appeal against the assessment to ensure that in future, when the audited accounts is available, the taxpayer still has a right to submit tax returns and pay taxes (with penalties) based on the actual audited accounts regardless of whether the actual tax liability is more or lesser than Form J under Section 90(3). Under Section 99, the taxpayer would need to file a Form Q and state detailed reasons / grounds to appeal against an assessment (Form J) which includes a best judgment assessment made under Section 90(3). However, it is noted that Form Q which are submitted without finalised audited accounts or tax returns have been rejected by LHDNM.

Our comments:

Instead of submitting a Form Q in the above situation, we propose that the tax agent submit an objection letter within 30 days from the date of the Form J under Section 90(3) objecting to the assessment and appealing to LHDNM to review the tax returns which will be submitted when theaudited accounts are available and issue a Form JA/JR where necessary. The letter shall also state the reason why the audited accounts are not available on time or why the tax returns are not submitted on time and to include the proposed timeline to submit the tax returns, if possible. We seek LHDNM’s consideration on our proposal.

Jawapan LHDNM:

Cadangan untuk mengemukakan surat bantahan adalah bertentangan dengan

peruntukkan Seksyen 99 Akta Cukai Pendapatan 1967 dan Ketetapan Umum No.

3/2012 yang memerlukan penggunaan Borang Q untuk semua rayuan yang

difailkan. Borang Q hendaklah diterima oleh pihak LHDNM walaupun tanpa

Akaun Beraudit.

Matters for further discussion in relation to the IRBM’s response above: Reference: CTIM Memorandum dated 25 April 2016 discussed at DESIRE No. 1/2016 on 19 May 2016 - issue #30

We have taken note of the IRBM’s response above that in order for the taxpayer to appeal against an assessment under S.90(3), the taxpayer has to file a Form Q within 30 days of the date of the assessment to the IRBM Branch. It is also mentioned in the IRBM’s response that the Form Q must be submitted even though it is submitted without the audited accounts.

Questions

As mentioned in the facts above, the Form Q was rejected because the audited accounts and the tax return were not submitted together with it (Note: The audited accounts were not ready at that time and consequently the tax return could not be prepared.).

of 99

In view of the IRBM’s response above, isn’t it that the IRBM branch should accept the Form Q even though the audited accounts and the tax return were not submitted together with it?

Would the reasons that the audited accounts are not available and hence the tax returns are not able to be prepared be acceptable for the submission of Form Q?

In cases where the IRBM branch has rejected the Form Q on the grounds that the audited accounts and the tax return were not submitted together with it, what recourse is available to the taxpayer to appeal against the S.90(3) assessment?


Taksiran seksyen 90(3) yang dibangkitkan berdasarkan pertimbangan

yang wajar (best judgement) oleh penaksir. Sekiranya pembayar cukai

tidak bersetuju dengan taksiran tersebut maka beliau hendaklah

mengemukakan rayuan dan menyatakan sebab-sebab beliau tidak

bersetuju melalui Borang Q. Rayuan tersebut sewajarnya disertakan

dengan Akaun Beraudit sebagai dokumen sokongan untuk asas rayuan

tersebut. Masalah yang timbul di pihak pembayar cukai ialah apabila

Akaun Beraudit tidak dapat dikemukakan bersama Borang Q kerana ia

belum dapat disediakan dalam tempoh 30 hari dari tarikh notis taksiran

dibangkitkan.

Rayuan Borang Q terhadap taksiran sekyen 90(3) ACP 1967, boleh

diterima walaupun tanpa menyertakan Akaun Beraudit. Borang Q tersebut

merupakan Borang Q yang lengkap.

Merujuk kepada Ketetapan Umum bil.7/2015 berhubung rayuan Borang Q,

Pengerusi menyarankan JRP bersama JDP menyemak dan mengemaskini

ketetapan umum tersebut agar lebih jelas bahawa rayuan Borang Q yang

dikemukakan tanpa akaun beraudit (kerana akaun beraudit hanya dapat

dikemukakan selepas tempoh 30 hari dari tarikh notis taksiran

dibangkitkan) hendaklah diterima oleh cawangan. Ketetapan umum

tersebut tiada dinyatakan bahawa akaun beraudit perlu dikemukakan

bersama-sama Borang Q.

LHDNM akan menerima rayuan Borang Q yang dikemukakan dalam

tempoh walaupun tanpa disertakan akaun beraudit. Tetapi, borang

tersebut tidak akan diproses untuk tujuan pengemukaan kepada PKCP

sehingga akaun beraudit siap dan dikemukakan kepada cawangan.

of 99

Pengerusi menyarankan langkah-langkah tersebut adalah untuk

memudahcara kepada pembayar cukai mengemukakan terlebih dahulu

Borang Q dalam tempoh dan disusuli oleh Akaun Beraudit. Arahan yang

jelas akan dikeluarkan kepada cawangan agar tiada layanan yang berbeza

antaran cawangan berhubung isu akaun beraudit tidak dikemukakan

bersama Borang Q.

5. Tax appeal pursuant to Section 131(1) of ITA 1967

5.1 The taxpayer committed an error or mistake when he submitted his tax return. He omitted (by forgetting) to claim the investment tax allowance on one qualifying machine of significant value. The original tax return’s tax payable amount is Nil. The revised tax return after the error is rectified is also Nil, but there would be a carried forward balance for investment tax allowance. The Company benefits from investment tax allowance (100% on qualifying expenditure against 100% of statutory income). Suggestions/Recommendations

What avenue of appeal is available to the taxpayer? In view of the above, will the LHDNM accept a claim of relief in respect of error or mistake in spite of the Nil tax paid under existing legislation?


Tidak boleh. Ini kerana mengikut peruntukan seksyen 131 menyatakan

permohonan relif hanya boleh dibuat sekiranya terdapat taksiran cukai

yang berlebihan disebabkan oleh kesilapan dan kekhilafan semasa


CTIM bersetuju isu ini adalah sama seperti isu 3 – Avenue to revise tax

return di mana saranan Pengerusi bahawa pandangan pihak CTIM

berhubung layanan permohonan pelepasan di bawah seksyen 131 perlu

dikaji dan diberi pertimbangan yang sewajarnya oleh Jabatan Resolusi

dan Pertikaian (JRP) untuk dibawa masuk ke dalam pindaan Bajet yang

akan datang agar dapat diperkukuhkan melalui pengenalan seksyen

baharu peruntukan undang-undang.

5.2 Section 131(1) of ITA 1967 states that “if any person who has paid tax for any year of assessment alleges that an assessment relating to that year is excessive by reason of some error or mistake…he may within five years…make an application…for relief”.

of 99

The above limits the relief in respect of error or mistake for claimants who have paid tax. In the situation described, the taxpayer had paid no tax (because of unabsorbed balances) in that particular year of assessment. Thus he technically cannot make a claim for relief in respect of this mistake. In Singapore’s Section 93A of the ITA, ‘1) If any person alleges that for any year of assessment –

a. an assessment is excessive; or

b. any unabsorbed loss, allowance or donation that may be carried forward ought to be of a higher amount than that set out in an assessment,

by reason of some error or mistake –

(i) in the return or statement made by him for the purposes of the assessment;

or

(ii) where he is exempted from liability to furnish a return under Section 62(2), in the notice of assessment served on him, he may, at any time not later than 6 years (if the year of assessment within which the assessment was made in 2007 or a preceding year of assessment) or 4 years (if the year of assessment within which the assessment is made is 2008 or a subsequent year of assessment) after the end of the year of assessment within which the assessment was made, make an application in writing to the Comptroller for relief.’

Based on the above, in Singapore, there is no requirement for the taxpayer to have paid tax before the taxpayer could claim a relief in respect of error or mistake. Suggestions/Recommendations What avenue of appeal is available to the taxpayer? If not, will the LHDNM work with the relevant ministries and lawmakers on amending Section 131 to something similar to Singapore’s Section 93A so that taxpayers who are non-tax paying could also claim relief under this section? Jawapan LHDNM Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah mengemukakan maklumat terperinci/lengkap kes yang mengandungi nama pembayar cukai, no rujukan fail cukai dan tahun taksiran kes yang dirujuk untuk penelitian lanjut oleh LHDNM Matters for further discussion in relation to the IRBM’s response above:

Reference: Issues raised for discussion at Bengkel No. 1/2016 on 9 May 2016 - issue #7.2 example 2

We have taken note of the IRBM’s responses above that the taxpayer cannot apply for relief in respect of error or mistake under S.131 where the amendment of the return (e.g. reinstating the investment tax allowance claim which was mistakenly

of 99

omitted in the return when it was submitted by the tax filing deadline) does not change the nil tax payable position. Questions

In view that the taxpayer cannot apply for relief under S.131 for the above case, what avenue is available to the taxpayer to amend the return?

Can the provisions under S.131 be amended so that the taxpayer is not required to have paid tax in order to claim the relief?


Bagi kes Tidak Kena Cukai (NL) peruntukan Seksyen 131 tidak terpakai.

Ini kerana mengikut peruntukan seksyen 131 menyatakan permohonan

relif hanya boleh dibuat sekiranya terdapat taksiran cukai yang berlebihan

disebabkan oleh kesilapan dan kekhilafan semasa pengemukaan Borang

Retan.

Pindaan ke atas peruntukan Seksyen 131 ACP 1967 adalah berkaitan

dengan polisi.

Pengerusi menyarankan kepada JRP bahawa pandangan pihak CTIM

berhubung polisi layanan permohonan pelepasan di bawah seksyen 131

perlu dikaji dan diberi pertimbangan yang sewajarnya untuk pindaan

peruntukan sedia ada untuk memudahcara kepada pembayar cukai.

APPEAL ISSUES

6. Notification of non-chargeability (Section 97A)

Matters for discussion:

6.1 According to S.97A.(1), “.. the Director General may notify that person in writing ..”.

Request

S.97A was inserted to provide the avenue for appeal to the Special Commissioners

of Income Tax (SCIT) in situations where the taxpayer is not in a tax payable position

and no assessment is being issued; as S.99 covers only positions with assessment

or additional assessment. Therefore, we request for consideration that “may” to be

replaced with “shall” so that the taxpayers are accorded with certainty that Notice of

Non-chargeability will be issued and can be appealed against.

of 99


LHDNM tidak bersetuju dengan cadangan CTIM bahawa untuk

memastikan certainty atas pemakaian peruntukan tersebut, dicadangkan

supaya perkataan 'may' digantikan dengan 'shall'. Dari segi legal

interpretation/takrifan undang-undang seksyen 97A ACP 1967, notis di

bawah seksyen tersebut akan dikeluarkan sekiranya kes pembayar cukai

terjatuh di bawah kriteria-kriteria yang diperuntukan di bawah seksyen

97A ACP 1967. Oleh itu, pengeluaran 'Notice of Non Chargeability to

tax'(NONC) oleh KPHDN adalah bergantung kepada fakta sesuatu kes.

Dengan demikian, perkataan 'may' hendaklah digunapakai. Jika

perkataan 'shall' digunapakai, ia akan membawa maksud bahawa

KPHDN hendaklah secara automatik mengeluarkan notis berkenaan dan

ini bertentangan dengan pemakaian seksyen tersebut apabila ia dibaca

secara keseluruhannya. Tiada keperluan meminda peruntukan sedia

ada.

Peruntukan seksyen 97A, ACP mengunakan perkataan “may’ kerana

ianya juga terpakai kepada kes tidak kena cukai (NL) yang “ditaksir

sendiri” oleh pembayar cukai. Oleh itu, sekiranya pembayar cukai tidak

bersetuju dengan pendirian dalam Ketetapan Umum (KU) semasa

pengisian BNCP tetapi masih perlu mematuhi KU, pembayar cukai boleh

memohon Pemberitahuan Tidak Kena Cukai berdasarkan pengiraannya

sendiri. Sementara untuk pembayar cukai lain yang tiada masalah, tiada

keperluan untuk pembayar cukai mendapatkan Pemberitahuan Tidak

Kena Cukai ini.

CTIM memaklumkan bahawa cawangan hanya mengeluarkan surat

pindaan pengiraan kerugian selepas pelarasan audit dan memberitahu

kes tidak kena cukai (NL). Surat tersebut bukan merupakan ‘Notice of

Non Chargeability to Tax’ (NONC) yang membolehkan pembayar cukai

untuk membuat tuntutan pelepasan kerana kesilapan atau kekhilafan

(relief in respect of error or mistake).

LHDNM menjelaskan tujuan surat makluman tersebut dikeluarkan adalah

hanya untuk memberikan notifikasi kepada pembayar cukai berhubung

pelarasan selepas audit di mana tiada cukai dikenakan. Surat tersebut

bukan notis taksiran dan tidak menyatakan bahawa tiada taksiran akan

dibangkitkan.

Sebelum cadangan pihak CTIM dipertimbangkan, keperluan untuk

LHDNM mengeluarkan NONC perlulah jelas tujuannya. Amalan

pengeluaran NONC adalah hanya selepas tindakan audit dijalankan

of 99

apabila pembayar cukai ada memohon rayuan; contohnya, untuk

pindaan kerugian selepas pelarasan.

Pengerusi menyarankan kepada JRP untuk mengkaji dan membuat

pertimbangan agar surat tersebut boleh dianggap sebagai satu

pengesahan yang menggantikan NONC untuk menyokong rayuan

pembayar cukai di masa hadapan. Pengerusi juga menyarankan format

dan pengisian surat makluman tersebut mestilah seragam di semua

cawangan yang mengeluarkannya. Oleh itu, peruntukan seksyen 97A

tidak perlu dipinda untuk menangani isu yang dibangkitkan.

6.2 The provisions of S.97A.(1) are supposed to give a remedy to taxpayers who have

no chargeable income or statutory business income to appeal against tax

adjustments made e.g. disallowance of unutilised tax balances arising from a tax

audit or aggrieved by the adoption of certain tax treatment according to Public Ruling.

If it is at the Director General’s discretion to notify, then taxpayers may not receive

equitable treatment as situations could arise whereby some taxpayers can get the

notification while others cannot even though the provisions of S.97A.(1)(a) or

S.97A.(1)(b) have been satisfied.

Request

In view of the above, we would request that:-

The provisions of S.97A.(1) be reviewed and wording be included in the Public

Ruling No. 7/2015 on Appeal against an Assessment and Application for Relief to

provide clarity.

All IRBM Branches issue notifications of non-chargeability for cases where the

provisions of S.97A.(1)(a) or S.97A.(1)(b) have been satisfied.


Sama sepertimana isu 6.1 di atas, yang mana jawapan yang sama

terpakai.

7. Notice of appeal to the Special Commissioners of Income Tax (Form Q)

Matters for discussion:

7.1 The Form Q appeal procedure and grounds for appeal are listed in paragraph 6 and

paragraph 7 respectively of the Public Ruling No. 7/2015 on Appeal against an

Assessment and Application for Relief. However, varying practices of accepting or

rejecting Form Qs are being encountered at various IRBM branches.

of 99

Query & Request

a. In view of the above, kindly confirm whether the following are correct:-

The signature on the Form Q cannot be in Chinese characters, Arabic script

or Tamil script.

An appointment must be made with the IRBM officer in order to file the Form

Q.

“Saya” in the Form Q must be a director of the company (the taxpayer is a

company).

“Saya” in the Form Q must be the name of the company (the taxpayer is a

company). The name of the company must be rubber stamped.

Form Q completed in hand writing is not acceptable.

The date of the Form Q must be the date when it is submitted at the IRBM

branch i.e. it cannot be dated earlier than the date of submission.

The date when the notice of assessment is received (ref. last paragraph after

item ii in the Form Q) must be the same as the date of the notice of

assessment. It is not the date when the notice of assessment was actually

received.

The IRBM officer that accepts the Form Q will only stamp acknowledgement

receipt on the submission letter but not the Form Q and related appendices

as the officer is required to review the accuracy and completeness of the

Form Q submitted before he or she is able to “accept” the Form Q.

The designation of the person signing the Form Q can only be “Director” or

“Pengarah”. Designation such as Chief Financial Officer or Finance Manager

is not allowed (even though these personnel do manage the company’s

business as provided under the definition of “Director” in Section 2 of the ITA

1967).

b. We would request for guidelines for the filling of the Form Q and there should be

clarity on the standard procedures for accepting or rejecting the Form Q to all

IRBM branches.


a. In view of the above, kindly confirm whether the following are correct:-

i. The signature on the Form Q cannot be in Chinese characters, Arabic script or

Tamil script.

Tidak. Huruf atau skrip tandatangan termasuk cap ibu jari adalah

bebas. Cawangan dimaklumkan untuk menerima Borang Q yang

dikemukakan asalkan terdapat tandatangan pembayar cukai tanpa

mengambilkira huruf atau skrip termasuk cap ibu jari yang

digunakan. Walau bagaimanapun, pembayar cukai perlu

of 99

menyatakan nama yang menandatangani Borang Q dalam Bahasa

Melayu di bawah ruangan tandatangan. Untuk makluman, Borang Q

akan dipinda untuk penambahbaikan.

ii. An appointment must be made with the IRBM officer in order to file the Form Q.

Tidak perlu. Walau bagaimanapun, pembayar cukai/ejen cukai

boleh menghubungi cawangan untuk mendapatkan pegawai

LHDNM yang akan membuat semakan awal berada di pejabat

cawangan. Ini bagi memastikan Borang Q yang ditandatangani oleh

orang yang dibenarkan di bawah seksyen 75, ACP 1967 yang

dikemukakan adalah lengkap dan teratur oleh pegawai tersebut.

Ejen cukai boleh mengemukakan Borang Q bagi pihak

pelanggannya.

Hanya pegawai LHDNM yang dipertanggungjawab oleh cawangan

boleh menyemak terlebih dahulu dan menerima Borang Q yang

dikemukakan di kaunter pejabat cawangan LHDNM.

iii. “Saya” in the Form Q must be a director of the company (the taxpayer is a

company).

iv. “Saya” in the Form Q must be the name of the company (the taxpayer is a

company). The name of the company must be rubber stamped.

Ya. Kedua-duanya boleh diterima sama ada nama Pengarah atau

nama Syarikat.

Cap nama Syarikat tidak perlu dicapkan di bahagian tandatangan

Borang Q bersama nama dan tandatangan orang yang dibenarkan

di bawah Seksyen 75 ACP 1967.

v. Form Q completed in hand writing is not acceptable.

Tidak. Tulisan tangan dibenarkan asalkan tulisan tersebut jelas dan

mudah untuk dibaca.

vi. The date of the Form Q must be the date when it is submitted at the IRBM

branch i.e. it cannot be dated earlier than the date of submission.

Tidak perlu sama kerana tarikh Borang Q tidak semestinya sama

dengan tarikh borang tersebut dikemukakan. Tarikh yang menjadi

tumpuan LHDNM adalah tarikh borang Q dikemukakan kepada

cawangan.

vii. The date when the notice of assessment is received (ref. last paragraph after

item ii in the Form Q) must be the same as the date of the notice of

assessment. It is not the date when the notice of assessment was actually

received.

Bagi tujuan Borang Q, tarikh merujuk kepada tarikh notis taksiran

bukan tarikh notis tersebut diterima.

of 99

Sekiranya Borang Q yang dikemukakan telah melewati tempoh 30

hari dari tarikh notis taksiran, jawatan kuasa teknikal Borang Q di

Cawangan akan membuat pertimbangan untuk penerimaan borang

tersebut berdasarkan alasan yang kukuh berserta dokumen

sokongan dari pembayar cukai.

Peruntukan seksyen 99, ACP 1967 menyatakan rayuan hendaklah

dibuat dengan mengemukakan Borang Q tidak lewat daripada 30

hari selepas notis taksiran disampaikan. Perenggan akhir selepas

item (iii) Borang Q merujuk kepada tarikh notis taksiran

disampaikan.

viii. The IRBM officer that accepts the Form Q will only stamp acknowledgement

receipt on the submission letter but not the Form Q and related appendices as

the officer is required to review the accuracy and completeness of the Form Q

submitted before he or she is able to “accept” the Form Q.

Ya sekiranya Borang Q yang dikemukakan adalah lengkap maka

tarikh penerimaan yang telah dicap di atas surat iringan akan

diambil sebagai tarikh penerimaan Borang Q di Cawangan.

Pembayar cukai adalah dinasihatkan untuk menyediakan surat

iringan kepada Borang Q agar ia boleh dicap penerimaannya oleh

LHDNM.

Sekiranya Borang Q yang diterima didapati tidak lengkap, surat

pemberitahuan bahawa Borang Q tidak dapat diproses akan

dikeluarkan berserta dengan menyatakan alasan penolakan yang

munasabah setelah semakan Borang Q dibuat. Borang Q tersebut

akan dikembalikan semula kepada pembayar cukai walaupun telah

dicap tarikh penerimaannya.

Sekiranya pembayar cukai ingin meneruskan rayuan, beliau perlu

mengemukakan Borang Q yang baru dengan lengkap dalam

tempoh yang ditetapkan. Jikalau telah melebihi tempoh yang

ditetapkan, pembayar cukai perlu memohon lanjutan masa dengan

mengemukakan Borang N terlebih dahulu.

Pengerusi memaklumkan bahawa tindakan oleh cawangan

terhadap setiap Borang Q yang dikemukakan oleh pembayar cukai

dipantau oleh JRP untuk memastikan ia diproses dalam tempoh

yang ditetapkan.

ix. The designation of the person signing the Form Q can only be “Director” or

“Pengarah”. Designation such as Chief Financial Officer or Finance Manager is

not allowed (even though these personnel do manage the company’s business

as provided under the definition of “Director” in Section 2 of the ITA 1967).

of 99

Orang yang dibenarkan untuk menandatangani Borang Q adalah

merupakan orang yang dibenarkan di bawah Seksyen 75 ACP 1967.

Untuk memudahkan pihak LHDNM menyemak isu cawangan menolak

Borang Q atas sebab ia ditandatangani oleh selain dari Pengarah

Syarikat – Pengarah / Pengurus Kewangan yang dibenarkan di bawah

seksyen 75, pihak CTIM diminta untuk mengemukakan maklumat

pembayar cukai, nombor fail dan cawangan yang menolak

pengemukaan Borang Q tersebut.

b. We would request for guidelines for the filling of the Form Q and there should be

clarity on the standard procedures for accepting or rejecting the Form Q to all

IRBM branches.

Arahan dalaman berkaitan dengan prosedur penerimaan dan

pengendalian rayuan Borang Q dan Borang N telah dikeluarkan

untuk rujukan semua Cawangan.

7.2 It is not the prerogative of the IRBM to reject the Form Q as it is an appeal made to

the Special Commissioners of Income Tax (SCIT). By rejecting the Form Q, the

taxpayers’ rights of appeal is being circumvented before it can be considered.

Pursuant to S.143 of the ITA 1967, the Form Q cannot be rejected “.. for want of

form, or be affected by any mistake, defect or omission therein, if it is in substance

and effect in conformity with this Act or in accordance with the intent and meaning of

this Act ..”.

As long as the Form Q appeal procedure and grounds for appeal listed in paragraph

6 and paragraph 7 respectively of the Public Ruling No. 7/2015 on Appeal against an

Assessment and Application for Relief have been complied with, the Form Q

submission should be accepted. There should not be any additional conditions

imposed by IRBM Branches.

Request

Please give us your views on the above.

Maklumbalas LHDNM untuk Bengkel bil.2/2016

Ya. Borang Q adalah lengkap dan teratur dan boleh diterima sekiranya

memenuhi syarat-syarat seperti yang dinyatakan dalam Ketetapan

Umum 7/2015.

of 99

Pengerusi memaklumkan cadangan CTIM akan dikaji dan akan disemak

lebih lanjut di peringkat LHDNM sebelum tindakan pindaan

penambahbaikan Borang Q dapat dilaksanakan.

7.3 It is noted in paragraph 4.5 of the Public Ruling No. 7/2015 on Appeal against an

Assessment and Application for Relief that the IRBM does not regard the notice of

reduced assessment (Form JR) as an assessment. However, an appeal may be

made in respect of the Form JR if there are issues in the notice that are disputed by

the taxpayer.

Query

As the Form JR is not regarded as an assessment as stated in the Public Ruling,

under what provision in the ITA 1967 can the taxpayer make such an appeal?


Berdasarkan peruntukan sedia ada JR bukanlah taksiran (not an

assessment). Seksyen 99, ACP memperuntukkan bahawa pembayar

cukai yang tidak berpuashati terhadap suatu “taksiran” boleh merayu

kepada PKCP. Kenyataan ini adalah terpakai bilamana isu yang tidak

dipersetujui telah sedia wujud dalam taksiran asal. Bila JR dikeluarkan,

jika PC hendak merayu atas isu berkenaan menggunakan JR maka

dalam keadaan sebegini, pembayar cukai tidak layak merayu

menggunakan JR. PC boleh mengemukakan rayuan Borang Q

berdasarkan Notis Taksiran Asal

Sebaliknya, dalam keadaan di mana isu baharu timbul di dalam JR

(contohnya susulan daripada pelarasan audit) maka pembayar cukai

boleh merayu menggunakan JR kerana bagi isu baharu ini JR dianggap

sebagai “taksiran asal”.

7.4 The Form JR should be included in the Form Q as it is an assessment under the ITA

1967. The High Court upon a Judicial Review application in Malayan Banking

Berhad v Ketua Pengarah Hasil Dalam Negeri (2015) MSTC ¶30-96, held that a

reduced assessment is an appealable assessment.

Request


of 99


Maklumbalas sepertimana isu 7.3 di atas, yang mana jawapan yang sama

terpakai.

7.5 It is noted that item i and item ii of the Form Q are for the notice of

assessment/additional assessment and the notification of non-chargeability

respectively. Item i of the Form Q should be allowed to be varied accordingly to

include the following:-

Notice of reduced assessment (ref. item 7.4 above);

Other appeals to the SCIT such as where:-

The surrendering company (in the case of group relief for companies) is

dissatisfied with the penalty imposed by the Director General which is equal

to the amount of tax which had or would have been undercharged by the

claimant company as a consequence of the incorrect information given on the

amount of adjusted loss surrendered in the surrendering company’s income

tax return (S.44A(9)(b) of the ITA 1967).

The person is aggrieved by his appointment by the Director General to be an

agent for another person and be assessable and chargeable to tax on behalf

of that other person (S.68(3) of the ITA 1967).

The person is dissatisfied with the amount of excess tax to be refunded to him

(S.111(1) of the ITA 1967).

(Note: The prescribed form for the application of appeal to the SCIT under S.109H of

the ITA 1967 is CP 15D – 1/2013)

A sample Form Q is attached in Appendix A which reflects the above as well as other

proposed changes (highlighted in yellow) for your consideration.

Request



LHDNM mengambil maklum cadangan dari badan professional di mana

ia akan disemak dengan lebih lanjut dan terperinci berdasarkan

peruntukan undang-undang sedia ada.

Pengerusi memaklumkan cadangan tersebut akan dibincang dan dikaji

dalam jawatan kuasa teknikal LHDNM dan pindaan kepada Borang Q

untuk penambahbaikan.

of 99

8. Application for extension of period for making an appeal to the Special

Commissioners of Income Tax (Form N)

Item i of the Form N (similar to item i of the Form Q) should be allowed to be varied

accordingly to include other appeals to the SCIT as listed in item 7.5 above.

Further, a time frame should be provided for the IRBM to process the Form N. Presently,

there is no time frame and some IRBM branches are taking between 6 to 24 months to

arrive at their decision.

A sample Form N is attached in Appendix B which reflects the above as well as other

proposed changes (highlighted in yellow) for your consideration.

Request



Cadangan akan disemak dengan lebih lanjut dan terperinci berdasarkan

peruntukan undang-undang sedia ada.

Peruntukan sedia ada tidak menetapkan tempoh masa untuk KPHDN

memproses Borang N di bawah Seksyen 100, ACP 1967.

Pengerusi memaklumkan bahawa LHDNM akan mengkaji cadangan pihak

CTIM.

9. Relief in respect of error or mistake (Section 131) & Form CP. 15C 9.1 S.131(1) makes reference to “.. any person who has paid tax for any year of

assessment ..” and “.. alleges that an assessment relating to that year is excessive by reason of some error or mistake in a return ..”.

Based on the above wording, any application for relief under S.131(1) would be

confined to excessive tax as a result of error or mistake.

Request

Presently, the application of this provision is limited to instances where a taxpayer

had paid excessive tax due to some error or mistake. There are instances where a

taxpayer had made some error or mistake but he has no chargeable income in the

year of assessment in which the error or mistake was made. The error or mistake

had resulted in the taxpayer’s unabsorbed losses or capital allowances to be in a

lower figure.

of 99

We request that the application of this provision includes instances where the error or

mistake does not result in excessive tax being paid. We would appreciate your views

on this.


Bagi kes Tidak Kena Cukai (NL) peruntukan Seksyen 131 tidak terpakai.

Ini kerana mengikut peruntukan seksyen 131 menyatakan permohonan

relif hanya boleh dibuat sekiranya terdapat taksiran cukai yang

berlebihan disebabkan oleh kesilapan dan kekhilafan semasa


Sama sepertimana isu 5 di atas, di mana jawapan yang sama terpakai.

9.2 There is no timeframe for the Director General to review the application for relief and

decide on whether the application should be rejected or approved.

Suggestion

We would suggest a timeframe of 60 days to review the application for relief so that it

provides taxpayers with certainty of the entire process and how long it would take as

otherwise, taxpayers’ rights could be compromised and other appeal routes cannot

be pursued. This would be similar to the timeframe of 60 days for the Director

General of Customs to decide on an application for the decision made by an officer of

goods and services tax (GST) to be reviewed pursuant to S.124 of the GST Act

2014.


Peruntukan sedia ada memang tidak tetapkan tempoh untuk KPHDN

memproses permohonan relief di bawah seksyen 131, ACP 1967.

Walau bagaimanapun, KPHDN akan mengemukakan permohonan relif di

bawah Seksyen 131 ACP 1967 kepada PKCP dalam tempoh tiga (3) bulan

daripada tarikh surat permintaan ‘request letter’ pembayar cukai

diterima.

Pengerusi memaklumkan cadangan badan professional tersebut akan

dibincang dan dikaji dalam jawatan kuasa teknikal LHDNM dan diberikan

pertimbangan untuk penambahbaikan.

9.3 We welcome the clarification from the IRBM that the provisions of S.131 can be

used as the grounds for revising the tax return for the following situations:-

of 99

Claiming deduction on payments to non-residents upon payment of withholding

tax in future years of assessment (when the expense was incurred, a deduction

was not claimed because of S.39(1)(f), (i) and (j) of the ITA 1967). (ref. Draft

IRBM responses to issues raised for DESIRE No. 1/2016)

Claiming tax incentive where the Income Tax Order/Rules for that tax incentive is

gazetted after the due date for filing the tax return for the year of assessment

(YA) which the Order/Rules have effect from. (ref. IRBM’s minutes of post-2015

Budget dialogue)

Claiming tax incentive where at the time of submitting the tax return (i.e. at the

due date for filing), the taxpayer has yet to receive approval for that tax incentive

and approval is only obtained after the submission of the tax return. (ref.

paragraph 12.8 of the Public Ruling No. 7/2015 on Appeal against an

Assessment and Application for Relief)

We noted that in the above-mentioned situations, technically the taxpayer did not

commit an error or mistake in the return. Hence, there is a concern on the legal

basis to revise the return on the grounds of relief in respect of error or mistake under

S.131.

Request


Maklumbalas tambahan LHDNM selepas Bengkel bil.2/2016

Senario yang diberikan boleh dianggap sebagai “error or mistake”

kerana kesilapan pembayar cukai tidak menuntut itu sendiri merupakan

satu “error or mistake” (error or mistake because of not claiming).

Contoh yang dinyatakan di atas adalah merupakan alasan bagi tujuan

kesilapan dan kekhilafan yang berlaku untuk membolehkan pembayar

cukai membuat rayuan di bawah seksyen 131sepertimana dinyatakan

dalam Ketetapan Umum 7/2015.

Oleh itu, rayuan tuntutan perbelanjaan atas cukai pegangan yang telah

diremit untuk tahun-tahun kebelakangan dan insentif seperti yang

dinyatakan seperti di bawah boleh dibuat mengikut peruntukan seksyen

131, ACP 1967.

Memandangkan perkataan 'error or mistake' di bawah seksyen 131, ACP

1967 tidak ditakrifkan, tafsiran perkataan tersebut adalah begantung

kepada fakta kes dan kes duluan/ precedent case decided by court. Oleh

itu, bagi kes-kes peculiar yang dinyatakan oleh CTIM, ia boleh

ditafsirkan terjatuh di bawah pemakaian seksyen 131. Pembayar cukai

of 99

disarankan untuk mengemukakan Borang 15C atau surat memohon relif

bagi kes yang dinyatakan kepada LHDNM.

9.4 A sample Form CP. 15C (application for relief in respect of error or mistake pursuant

to S.131(1)) is attached in Appendix C with proposed changes (highlighted in yellow)

for your consideration.

Request


Maklumbalas tambahan LHDNM selepas Bengkel bil.2/2016

Tidak. Orang yang dibenarkan untuk menandatangani permohonan relif

di bawah seksyen 131, ACP 1967 merupakan orang yang dibenarkan di

bawah seksyen 75, ACP 1967.

Pengerusi memaklumkan cadangan badan professional tersebut akan

dibincang dan dikaji dalam jawatan kuasa teknikal LHDNM dan diberikan

pertimbangan untuk penambahbaikan.

3. PENUTUP

Pengerusi mengucapkan ribuan terima kasih kepada semua yang hadir

kerana penglibatan dalam sesi bengkel ini. Juga penghargaan kepada pihak

badan professional yang telah membangkitkan isu-isu untuk perhatian

LHDNM dan memberikan cadangan dan pandangan yang akan dikaji untuk

diberikan pertimbangan bagi penambahbaikan yang akan memantapkan lagi

pentadbiran dan sistem percukaian negara.

Adalah diharapkan kedua-dua belah pihak dapat bekerjasama dengan lebih

erat lagi untuk memastikan tahap perkhidmatan kepada pembayar cukai

dapat dipertingkatkan lagi.

Mesyuarat ditamatkan pada jam 12.05 tengah hari.

LEMBAGA HASIL DALAM NEGERI MALAYSIA.

Tarikh: 25 Ogos 2016

of 99

MALAYSIA CUKAI PENDAPATAN

(Borang yang ditetapkan di bawah seksyen 152 Akta Cukai Pendapatan 1967)

NOTIS RAYUAN KEPADA PESURUHJAYA KHAS CUKAI PENDAPATAN

(Seksyen 99(1) Akta Cukai Pendapatan 1967)

APPENDIX A

(CP 14-Pin. 1/2009)

BORANG

Q

Kepada:

Ketua Pengarah Hasil Dalam Negeri .......................................................... .......................................................... ..........................................................

Daripada :

..........................................................

..........................................................

..........................................................

..........................................................

No. Fail : ...........................................

Saya *...................no. KP..................bagi pihak................................ .......................tidak berpuashati dengan :

i. taksiran **/ taksiran tambahan / taksiran kurangan *** bertarikh........................................menunjukkan RM ****.........................sebagai cukai yang kena dibayar bagi tahun taksiran ......................................,

atau

ii. pemberitahuan tidak kena cukai bertarikh............................................................... bagi tahun taksiran

.......................

yang notis mengenainya telah disampaikan kepada saya pada................................ merayu kepada Pesuruhjaya Khas Cukai Pendapatan atas alasan-alasan berikut :

Tarikh: ........................... ............................. .................................

Tandatangan

............................................................. Jawatan

CATATAN:

i.

Notis rayuan berasingan hendaklah diberi bagi tiap-tiap tahun taksiran

ii. Notis ini hendaklah dihantar kepada Lembaga Hasil Dalam Negeri di alamat yang ditunjukkan pada

of 99

iii.

notis taksiran atau pemberitahuan tidak kena cukai.

Sila nyatakan alasan rayuan dengan jelas dan terperinci.

* Termasuk ejen cukai yang dilantik oleh pembayar cukai yang membuat rayuan

** Termasuk taksiran di bawah subseksyen 44A(9)(b), 68(3) dan 111(1) Akta Cukai Pendapatan 1967 dan lain-lain

taksiran di bawah Akta Cukai Pendapatan 1967 yang boleh dirayu kepada Pesuruhjaya Khas Cukai Pendapatan.

*** potong yang tidak berkenaan

**** Bagi taksiran tambahan, sila isikan jumlah cukai yang kena dibayar bagi tahun taksiran tersebut selepas mengambilkira taksiran tambahan. Bagi taksiran kurangan, sila isikan jumlah cukai yang kena dibayar bagi tahun taksiran tersebut selepas mengambilkira taksiran kurangan.

of 99

APPENDIX B

(CP 15-Pin. 1/2009)

MALAYSIA

CUKAI PENDAPATAN (Borang yang ditetapkan di bawah seksyen 152 Akta Cukai Pendapatan

1967)

PERMOHONAN UNTUK LANJUTAN TEMPOH BAGI MEMBUAT RAYUAN

KEPADA PESURUHJAYA KHAS CUKAI PENDAPATAN

(Seksyen 100(1) Akta Cukai Pendapatan 1967)

BORANG

N

Kepada:

Ketua Pengarah Hasil Dalam Negeri .......................................................... .......................................................... ..........................................................

Daripada :

..........................................................

..........................................................

..........................................................

..........................................................

No. Fail : ...........................................

Saya * …..… no. KP ….…. bagi pihak …..… memohon supaya dilanjutkan tempoh memberi notis rayuan terhadap :

i. taksiran ** / taksiran tambahan / taksiran kurangan *** bertarikh...........................................................menunjukkan

RM ****..............................sebagai cukai yang kena dibayar bagi tahun taksiran ..................................,

atau

ii. pemberitahuan tidak kena cukai bertarikh............................ ...............................bagi tahun taksiran ..............................

yang notis mengenainya telah disampaikan kepada saya pada..................................

Permohonan ini dibuat atas alasan-alasan berikut :

Tarikh: ........................... ............................. ................................. Tandatangan

.............................................................. Jawatan

Permohonan ini hendaklah dihantar kepada Lembaga Hasil Dalam Negeri Malaysia di alamat yang ditunjukkan pada notis taksiran atau pemberitahuan tidak kena cukai.

of 99

* Termasuk ejen cukai yang dilantik oleh pembayar cukai yang membuat rayuan

** Termasuk taksiran di bawah subseksyen 44A(9)(b), 68(3) dan 111(1) Akta Cukai Pendapatan 1967 dan lain-lain

taksiran di bawah Akta Cukai Pendapatan 1967 yang boleh dirayu kepada Pesuruhjaya Khas Cukai Pendapatan.

*** potong yang tidak berkenaan

**** Bagi taksiran tambahan, sila isikan jumlah cukai yang kena dibayar bagi tahun taksiran tersebut selepas mengambilkira taksiran tambahan. Bagi taksiran kurangan, sila isikan jumlah cukai yang kena dibayar bagi tahun taksiran tersebut selepas mengambilkira taksiran kurangan.

of 99

APPENDIX C

CP. 15C - 1/2009)

LEMBAGA HASIL DALAM NEGERI MALAYSIA

Relif Di bawah Subseksyen 131(1) Akta Cukai Pendapatan 1967

Kepada: No. Rujukan Cukai Pendapatan:

PERMOHONAN RELIF KEPADA KETUA PENGARAH HASIL DALAM NEGERI (KPHDN) BERKAITAN KESILAPAN

Saya * …..…………… no. KP ………….…. bagi pihak ........................ tidak berpuas hati dengan taksiran / taksiran tambahan** bertarikh .................................... yang menunjukkan RM ***...............................sebagai cukai yang kena dibayar bagi tahun taksiran ....................................... yang notis mengenainya telah disampaikan kepada saya pada ....................................... merayu kepada KPHDN kerana ianya berlebihan disebabkan kesilapan berikut:

Tarikh: ......................... …...................................................

(ditandatangan oleh pembayar cukai *)

of 99

* Termasuk ejen cukai yang dilantik oleh pembayar cukai yang membuat permohonan

** potong yang tidak berkenaan

*** Bagi taksiran tambahan, sila isikan jumlah cukai yang kena dibayar bagi tahun taksiran tersebut selepas mengambilkira taksiran tambahan.

Nota: Permohonan ini hendaklah dihantar kepada Lembaga Hasil Dalam Negeri Malaysia (LHDNM) di alamat yang ditunjukkan pada notis taksiran atau ke cawangan LHDNM di mana fail cukai pendapatan didaftarkan.

of 99

Jawapan LHDNM ke atas isu-isu dalam

BENGKEL NON-TECHNICAL COMPLIANCE &

OPERATIONAL ISSUES BIL. 1/2016

pada 9 Mei 2016

jam 9:30 pagi

di Bilik Mesyuarat Laksamana 2

Menara HASIL Ibu Pejabat LHDNM

Cyberjaya

NON-TECHNICAL COMPLIANCE & OPERATIONAL ISSUES FOR BENGKEL WITH IRBM BIL. 1/2016

of 99

1. Expatriate Tax Issues


of 99

1. Verification of tax residence status

Example 1 - Flexibility to send passport for verification for a non-leaver

case (for a tax resident)

Currently, we can only submit passport for verification in respect of leaver or

appeal cases to the LHDNM’s office. For non-leaver cases, the LHDNM would

not accept the passport submission, except at the LHDNM’s KL Bandar. This is

because some of the expatriates requested that we submit their passport on a

yearly basis rather than wait until they leave Malaysia. This is to avoid from them

leaving Malaysia without getting their passport verified and thereafter pay taxes

as a non-resident.


We would request the LHDNM to give flexibility for the expatriates to submit their

passport for verification. This is to facilitate the process of ascertaining their tax

resident status for a year of assessment.

Jawapan LHDNM

Pembayar cukai dikehendaki mengemukakan salinan paspot bagi kes-kes leaver

yang bertujuan untuk pengesahan/verifikasi LHDNM dan pembayar cukai yang

memohon pengurangan PCB, beliau perlu mengemukakan salinan paspot untuk

pengesahan status residen.

Manakala untuk kes non leaver, pembayar cukai tidak perlu mengemukakan

salinan paspot kecuali jika dikehendaki oleh LHDNM.

Cadangan CTIM tidak dapat dipertimbangkan kerana LHDNM tiada keupayaan

untuk membuat penyimpanan dokumen salinan paspot pembayar cukai.

Example 2 - LHDNM’s acceptance of certified true copy (CTC) of the

passport to support tax residence status

For taxpayers who are no longer in Malaysia, we understand that LHDNM

accepts passport copies certified by the Malaysian embassy in the taxpayer’s

country of residence.


of 99


We would request the LHDNM to allow the certification of passport by notary

public or commissioner of oath especially overseas where the Malaysian

embassy or consulate may be located only in the capital city.

Jawapan LHDNM

Salinan paspot yang diakui sah (CTC) oleh pihak kedutaan atau konsulat

Malaysia diterima oleh LHDNM. Pengesahan salinan paspot oleh pihak

Pesuruhjaya Sumpah atau Notari Awam di luar Malaysia diterima oleh LHDNM.

Example 3 - Passport verification to substantiate the residency status claim

a) For leaver cases, the expatriate is required to perform passport

certification/ verification at the tax office prior to their departure from

Malaysia as it is part of tax clearance procedures.

Scenario 1:

Expatriate had returned to the home country & resigned from the Company

(unreachable) and the immigration department unable generate his travelling

records as there is no record captured in their system or missing travel date.

Jawapan LHDNM

Setakat ini, pihak LHDNM di peringkat cawangan termasuk Cawangan Bukan

Mastautin tiada kes atau isu berhubung scenario yang dibangkitkan oleh CTIM.

Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah

mengemukakan maklumat terperinci/lengkap kes yang mengandungi nama

pembayar cukai, nombor rujukan fail cukai dan tahun taksiran kes yang

dirujuk untuk penelitian lanjut oleh LHDNM.

Scenario 2:

We have one (1) case where the expatriate was deceased and unable to

provide the original passport to us to perform the passport certification or

verification at the tax office or Notary Public when he returned to the home

country. We have provided the immigration records to the tax officer at Non-


of 99

Resident Branch (registered LHDNM Branch) as part of tax clearance

procedure to substantiate the residency status claims. However, the tax officer

refuses to process his tax clearance and requesting us to provide the certified

true copy of his passport. In addition, the employer in Malaysia is unable to

provide the timecard for this case as this expatriate is a Chief Financial Officer

(CFO) and he is not required to be in office for 5 working days in a week.


To substantiate the residency status claims if the period is more than 182

days, we would like to propose to the LHDNM to consider to accepting:-

The copy of employment pass issued by immigration department stating

the expatriate employment period in Malaysia (i.e. 2 years from XXX to

XXX); or

The certified true copy of his passport (full set of the passport).

Jawapan LHDNM



pembayar cukai, no rujukan fail cukai dan tahun taksiran kes yang dirujuk

untuk penelitian lanjut oleh LHDNM.

b) Documents to substantiate the business trip out from Malaysia

Recently we have one (1) case where the tax officer in the Petaling Jaya

Branch requested us to provide them with the internal “business trip form” that

the expatriate has filled up and approved by the company’s management

team to substantiate the overseas business trips. In this case, we have

submitted the business confirmation letter issued by the employer confirming

this expatriate travelled out from Malaysia for business trips as well as email

from his employer to their travel agent requesting their agent to book the flight

ticket for him for the Company business trips. Nevertheless, the tax officer

refuses to grant the tax resident status to this expatriate and requested us to

submit the business trip form. We have highlight to tax officer that the

approval of business trip form consists of client’s private and confidential

(P&C) information which they should not disclose to external parties. But, he

still insisted us to submit the said document.


of 99


We would request the LHDNM to consider the confirmation letter from the

company as sufficient evidence to support the individual overseas business

trips given the confidential nature of the internal travel business trip

form/memo which could be embedded electronically within their internal

process.

Jawapan LHDNM





2 Determination of residence status - Section 7(1)(b)

Example 1

We have numerous cases with the LHDNM Jalan Duta Branch where the

LHDNM officers have different interpretation on the application of Section 7(1)(b)

of ITA with regard to 182 consecutive days and temporary absence. The LHDNM

officers took the view that in applying Section 7(1)(b) of ITA, the 182 days refer to

number of days physically present in Malaysia i.e. they disregard the temporary

absences under the proviso to Section 7(1)(b) of ITA which shall form part of the

consecutive period.


Section 7(1)(b) of the ITA, states that the 182 days refers to a 182 days

consecutive period which is inclusive of the temporary absences. We would

appreciate it if LHDNM could notify its branches accordingly.

Jawapan LHDNM

Perenggan 6.2.3 dan 6.2.4 di dalam Ketetapan Umum No. 6/2011 – Taraf

Mastautin Individu ada menjelaskan situasi bagi “ketiadaan sementara yang

dibenarkan” bagi tujuan penentuan taraf mastautin di bawah Perenggan 7(1)(b),

ACP 1967.


of 99

Oleh itu, jika “ketiadaan sementara” yang dibangkitkan itu tertakluk di bawah

perenggan 6.2.3 Ketetapan Umum tersebut. Maka, tidak timbul isu bahawa

Cawangan tidak mengambilkira bilangan hari tersebut.

Walau bagaimanapun, jika fakta sebenar kes yang dirujuk ini menunjukkan

pembayar cukai tidak tertakluk di bawah situasi “ketiadaan sementara yang

dibenarkan” itu maka layanan cawangan tidak mengambilkira bilangan hari

tersebut adalah teratur.





Example 2

We also have other instances from the LHDNM Jalan Duta Branch where the

LHDNM officer requested the employer to issue a confirmation letter on the

employee’s temporary absence due to social visits in order to qualify for

residence status under Section 7(1)(b) of the ITA.


We noted that other LHDNM branches do not request for this confirmation.

Furthermore, it is not reasonable to ask for confirmation for social visits. As such,

we would like to request for consistent treatment on this matter among the

LHDNM branches.

Jawapan LHDNM

Akta Cukai Pendapatan 1967 tidak memperuntukkan secara khusus bahawa

majikan perlu mengeluarkan surat pengesahan bahawa “ketiadaan sementara

berhubung lawatan sosial”.

Setakat ini, berdasarkan kepada semakan oleh LHDNM di peringkat cawangan

termasuk Cawangan Bukan Mastautin, tiada kes atau isu melibatkan pemakaian

seksyen 7(1)(b)ACP 167 sebagaimana contoh yang dibangkitkan oleh CTIM.

Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah mengemukakan maklumat terperinci/lengkap kes yang mengandungi nama pembayar cukai, no rujukan fail cukai dan tahun taksiran kes yang dirujuk untuk penelitian lanjut oleh LHDNM.


of 99

Example 3

Most expatriates hold an i-MACS card where immigration will not stamp their

passports on arrival into or departure from Malaysia. In these instances, list of

entry into/exit from Malaysia is usually prepared based on the overseas stamps.

However, this practice has not been accepted by LHDNM officers (also at Jalan

Duta Branch) and these expatriates had been assessed as non-resident.


It is hoped that the LHDNM officers could support i-MACS implemented by IMM

and give due consideration to those i-MACS card holders.

Jawapan LHDNM

Amalan biasa di peringkat cawangan ialah menerima rekod dari IMM yang

dikemukakan oleh pembayar cukai kerana LHDNM sentiasa mendokong usaha-

usaha Kerajaan Malaysia untuk kemudahan rakyat.





3 Deemed employer should not be required to comply with the MTD

Issue Relating to Compliance with the Monthly Tax Deductions (MTD) on

“Deemed Employer” (This issue was raised at the Desire Meeting No.

1/2015 held on 7 April 2015 and recorded in the DESIRE Meeting No. 1/2015

Minutes, Page 29, No. 3.1)

In the Malaysian Institute of Accountants’ (MIA) letter dated 20 October 2014 to

the Timbalan Ketua Pengarah (Operasi Percukaian), Lembaga Hasil Dalam

Negeri, the MIA raised the operational issue of MTD imposed on a person who

is considered a “deemed employer” that is subject to Section 83(6), Income Tax

Act (ITA) 1967.

The following scenario was set-out in MIA’s letter:


of 99

An application for a Professional Visit Pass ("PVP") for a short term

employment in Malaysia requires a local sponsor, who is deemed an

employer for the purpose of Section 83 of the ITA 1967.

For the purpose of immigration, a PVP holder is not allowed to receive any

salary from Malaysia or from the local sponsor. In most cases, the local

sponsor merely acts as sponsor for the application and is not responsible for

the payment of salary or related costs to the PVP holders. These PVP holders

will be paid directly by their employers in their home countries.

The sponsors have been advised that they have to comply with the MTD with regard to the PVP holders regardless of whether they are responsible for the payment of salary.

MIA’s COMMENTS

It is clear from the wordings in subsection 83(6) of the ITA 1967 that a person is deemed to be an employer for the purpose of Section 83 of ITA 1967.

It is also clear that subsection 107(4) of the ITA 1967 is a penalty provision for not complying with Section 83(2), (3) or (4) and Section 107 of the ITA 1967.

The issue to consider here is whether compliance with the monthly tax

deduction ("MTD") is applicable to the "deemed employer".


MIA is of the view that a 'deemed employer' is not required to comply with the

MTD and that subsection 107(4) of the ITA 1967 is thus not applicable in

such a situation.

MIA hopes that the LHDNM can respond to the issue, that the compliance with

the MTD should not apply to a "deemed employer" and the penalty provisions

under subsection 107(4) of the ITA 1967 applies only if subsection 83(2), 83(3),

83(4) or 83(5) of the ITA 1967 is not complied.

The Chairman of the DESIRE Meeting No. 1/2015 has proposed for this

issue to be discussed at a workshop.


of 99

Jawapan LHDNM

Berhubung dengan isu local sponsor sama ada dianggap majikan di bawah

subseksyen 83(6) ACP 1967. Secara am, local sponsor adalah dianggap

majikan yang bertanggungjawab bagi tujuan memastikan bahawa pendapatan

professional yang tertakluk kepada cukai di Malaysia dan tertakluk kepada PCB

di bawah subseksyen 107(4) ACP diremit oleh local sponsor kepada KPHDN.

Ini adalah tafsiran yang tepat berdasarkan peruntukan statutori tersebut.

Persoalan pokok sama ada peruntukan tersebut terpakai kepada scenario

sepertimana yang diberikan oleh MIA adalah question of fact.

Dalam erti kata lain, fakta kes akan menentukan sama ada punca pendapatan

yang diterima oleh professionals berkenaan terbit/derived dari Malaysia.

Sekiranya ia melibatkan DTA pula, isu ini ditentukan berasaskan kepada

peruntukan di dalam DTA.

Oleh yang demikian, sekiranya pendapatan berkenaan tertakluk kepada cukai di

Malaysia kerana berpunca dari Malaysia, peruntukan seksyen 83(6) ACP

terpakai. Oleh kerana local sponsor adalah dianggap sebagai majikan yang

bertanggungjawab, amalan sedia ada dikekal dan diteruskan.

Peraturan tersebut juga terpakai untuk ‘regional/representative office’ yang

dianggap majikan yang bertanggungjawab bertujuan memastikan pendapatan

pekerja professional yang tertakluk kepada cukai di Malaysia meremitkan PCB.

Dijelaskan bahawa peraturan ini adalah bertujuan sebagai langkah untuk

memastikan professional berkenaan menjelaskan tanggungan cukai di Malaysia

sebelum berhenti kerja dan pulang ke negara asal.


of 99

2. Field or Desk Audit Issues


of 99

1 Audit Process

A. Giving sufficient time to respond

Example 1 - Insufficient time to submit information requested in the

notification of audit

Case 1

For new selected audit cases, the LHDNM generally issues the letter and

subsequently sends it to taxpayers/tax agents vide post. For most of the

cases, the taxpayers/tax agents received the said letter after 10 days from the

date of the LHDNM’s letter. As a result, the taxpayers/tax agents will be

required to apply for an extension of time from the LHDNM to submit the

information/documents requested. This creates hardship and stress for

taxpayers as sometimes no reply is received from the LHDNM until the

deadline.

Case 2

We have been receiving the LHDNM letter requiring tax audit documents. As

a result we have to call in to request extension. Recently, they only allowed

for 14 days extension, even though the letters stated it gave 21 days for

preparation. Due to the tight dateline, the taxpayer’s business has been

distracted as they have to put aside their work and to work on the tight

dateline requirements by the LHDNM. It becomes worse week by week.

During this Chinese new year week, LHDNM only allowed 7 days to prepare

the tax audit documents. On 31 March 2015, we received another tax audit

letter (PCB audit in this case) and they required three years of document. The

letter dated 23 February 2015, received on 3 March 2015 and the visit is on 9

March 2015. Even though we called in to request for extension but was

rejected. Reason given is, they have few companies to visit, and the schedule

is full already.


In view of this, we are of the opinion that the timeline to submit the request

information / documents should be from the date of receipt of the said letter.


of 99

Jawapan LHDNM

Merujuk kepada Surat Pengemukaan Akaun Beraudit, Pengiraan Cukai Dan Dokumen Sokongan menyatakan pembayar cukai dikehendaki membuat pengemukaan yang lengkap dan kemukakan semua butiran dalam tempoh 21 hari dari tarikh surat dikeluarkan.

Tempoh 21 hari yang diberikan adalah wajar dan sekiranya pembayar cukai

dapat membuktikan kelewatan penerimaan surat tersebut, pembayar cukai

boleh dibenarkan membuat lanjutan masa dengan menghubungi pegawai

audit berkenaan

Example 2 - Insufficient time to submit additional information requested

to finalise the audit

While finalizing a tax field case, the officer in charge requested additional

information and documentation pertaining to LHDNM’s query raised by them

in their tax field audit findings letter.

Accordingly the requested documents were forwarded together with the

taxpayer’s explanation. However, when the tax agent tried to follow up with

the officer on a daily basis on the status of the letter and documents, the

officer was not reachable for more than a week.

Subsequently the officer contacted the tax agent and requested for further

additional documents to be submitted to the LHDNM the very next day

(Thursday). When the tax agent asked for an extension of time (Monday), the

officer informed that the case has to be finalized as soon as possible as she

has a deadline to her superior and thus she did not grant us the extension of

time.

This seems very unfair to the taxpayer as the tax agent had been trying to

reach the officer for more than a week and was unable to do so but when the

officer contacted the tax agent the officer gives an unreasonable timeline to

respond.


The LHDNM should consider the timing involved in requesting the documents

from the taxpayer to submit to the LHDNM and be reasonable in the deadline

for the tax agent to respond to the LHDNM.


of 99

In addition, the Institute would suggest that the LHDNM officers include their

email address in the official letter to enable tax agents to contact them rather

than for the tax agent to be powerless where the officers are not contactable

via phone.

Jawapan LHDNM

Berhubung dengan perkara tersebut, prosedur menetapkan Pembayar cukai

dikehendaki memberi maklum balas ke atas penemuan audit yang berkaitan

dalam tempoh 21 hari dari tarikh surat penemuan audit atau hadir ke pejabat

ini untuk perbincangan dengan pegawai audit.

Tempoh 21 hari adalah wajar dan sekiranya melebihi dari tempoh tersebut, pembayar cukai boleh berbincang dengan pegawai audit untuk memberi pertimbangan. Walau bagaimanapun, keputusan adalah bergantung kepada fakta kes sebenar.

Pihak LHDNM tiada halangan bagi pegawai audit memberikan alamat e-mel

kepada pembayar cukai dan agen cukai.

Example 3 - Insufficient time to revert on the LHDNM’s computation of

transfer pricing adjustments; and additional tax payable

There were cases where 7 days turn-around from the date of the LHDNM’s

letter was given to tax agents to revert to the LHDNM on their computation of

transfer pricing adjustments and additional tax payable.

There was one case encountered where a 7 days turn-around time to revert

was given where 2 days were public holidays (Friday and Monday) while

another 2 days were weekends. The letter was issued by the LHDNM on

Thursday evening.


Whilst it is appreciated that the short time line is in line with the LHDNM’s

effort to finalise the case in hand, it is not quite practical given that transfer

pricing related information / documents may need time to be obtained given

the volume of paperwork involved.


of 99

Further, in certain occasions, clarification is required by the tax agents from the LHDNM on their computations / adjustments before the tax agents can inform taxpayers. In turn, taxpayers need time for their management to digest the matter before making a decision on it. We would propose that for this matter, a meeting between the LHDNM and tax agents be held prior to the issuance of the LHDNM’s computation of transfer pricing adjustments. Thereafter, a minimum of 21 days turn-around time should be given to the taxpayer considering the following:-

(i) The said letter has to be deciphered and translated into English; and

(ii) The taxpayer would need to discuss with the headquarters and gather the information required to be submitted to the LHDNM.

Jawapan LHDNM

IRBM would provide taxpayers 21 days from the date of first proposed notification to file their objections as stated in the 2013 Transfer Pricing Audit Framework. Any subsequent notifications send out after review of tax payers’ objections would not require the 21 days.

B. Not giving taxpayers opportunity to explain tax treatment

Example - Standard operating procedure to give taxpayers opportunity

to explain tax treatment is needed

The LHDNM carried out field audit on Company A. Company A paid travelling

expenses to a non-resident. During the audit visit, the LHDNM officer did not

discuss with Company A the issue and did not request for any supporting

documents pertaining to the transaction. Subsequently, the LHDNM issued a

letter informing that the amount will be disallowed in the tax computation on

the basis that the travelling expenses were for the purpose of expanding

Company A’s overseas market share and that the travelling expenses is non-

allowable as it is capital in nature. The tax agent of Company A called to

explain the nature of expenses and follow up with a written reply together with

supporting documents.

The explanation was rejected because the officer said the information

provided is insufficient. Company A requested to meet with the LHDNM officer


of 99

to discuss and get a better understanding of why the information provided is

not acceptable. The LHDNM officer refused to meet and issued Form JA.


The LHDNM should give taxpayers the opportunity to explain the tax

treatment. We would appreciate it if the LHDNM could provide us with its

standard operating procedure on this matter.

Jawapan LHDNM

Berhubung dengan perkara tersebut, prosedur menetapkan Pembayar cukai

dikehendaki memberi maklum balas ke atas penemuan audit yang berkaitan

dalam tempoh 21 hari dari tarikh surat penemuan audit atau hadir ke pejabat

ini untuk perbincangan dengan pegawai audit.

LHDNM berpandangan bahawa maklum balas dan dokumen yang diterima

daripada pembayar cukai telah dikaji oleh pegawai audit sebelum sesuatu

isu audit itu dimuktamadkan.

Walau bagaimanapun, sekiranya pembayar cukai masih tidak berpuas hati

dengan taksiran tambahan yang dikeluarkan, pembayar cukai boleh membuat

rayuan melalui Borang Q.

C. Not communicating with the tax agents

Example 1 - Notification of audit was given by phone call

Client received a phone call from the LHDNM Branch of JB to furnish

documents without giving any letter or fax requesting the details. The LHDNM

officer just verbally asked the client to submit the documents to the LHDNM

office at Menara Hasil, Johor Bahru and left their contact number with the

client.

Client then called us enquiring what to do. Upon enquiry, they mentioned that

the LHDNM did not send any letter or fax in relation to the desk audit.

We then requested the client to call back the LHDNM officer and request for a

written request.

(This is a new case i.e. it is not an on-going case.)


of 99


It is proposed that the LHDNM make it a standard procedure to send written

requests to clients instead of verbal requests.

Jawapan LHDNM

Bagi kes-kes audit meja, prosedur membenarkan pembayar cukai dihubungi dengan mengeluarkan CP 800 / 800A / surat atau melalui telefon, emel atau faks untuk mendapatkan maklumat / dokumen yang berkaitan dengan isu audit.

Example 2 - Notification of field audit was not copied to tax agent (This

issue was raised at the Desire Meeting No. 1/2015 held on 7 April 2015

and recorded in the DESIRE No. 1/2015 Minutes, Page 12, No. 7)

Our members have informed us of LHDNM letters on the notification of field

audit which were addressed and sent to taxpayers instead of their tax agents

or which were not copied to their tax agents. This is despite the fact that the

LHDNM has the relevant tax agent particulars of the taxpayers.


CTIM would like to understand the rationale. We would also like to request

that such LHDNM letters are sent to the tax agents, if not, then copied to the

tax agents. This would facilitate the field audit process as the tax agents are

involved in the tax matters of the taxpayers.

Please refer to the LHDNM’s response in the DESIRE Meeting No. 1/2015

Minutes, Page 13, No. 7. The Chairman of the DESIRE Meeting No.

1/2015 has proposed for this issue to be discussed at a workshop.

Jawapan LHDNM

LHDNM memaklumkan lawatan audit melalui surat hanya kepada Pembayar

Cukai (PC) sahaja. Ketetapan ini telah dinyatakan dalam Rangka Kerja Audit

yang umum mengetahuinya. Adalah budi bicara PC untuk melantik wakil

cukai untuk mewakilinya, semasa proses pengauditan dilaksanakan.

http://www.ctim.org.my/file/news/122/03299_Minit%20DESIRE%20Bil.%201-2015.pdf



of 99

Ketetapan di dalam Rangka Kerja Audit tersebut telah pun dipersetujui oleh

pihak professional bodies dan Kementerian Kewangan Malaysia sebelum

diumumkan untuk pengetahuan kepada pembayar cukai.

LHDNM adalah tertakluk di bawah peruntukan seksyen 138, ACP 1967 yang

bertanggungjawab untuk menjaga kerahsiaan segala maklumat pembayar

cukai. Oleh itu, surat lawatan audit dikeluarkan terus kepada pembayar cukai

untuk mengelakkan risiko kebocoran rahsia atau ‘unauthorised disclosure’

maklumat pembayar cukai kepada pihak ketiga.

2 Transfer pricing audit

Example 1 - Checklist to determine comprehensive and good quality

contemporaneous transfer pricing documentation checklist is needed

Reference is made to the Penalty Rate Table of the Transfer Pricing Audit

Framework issued by the LHDNM which comes into effect from April 1, 2013.

It is noted that a 0% penalty rate applies to taxpayers who prepared

comprehensive, good quality, contemporaneous transfer pricing documentation in

accordance with existing regulations.


For taxpayers’ clarity purposes, we welcome a checklist which sets-out the

parameters used by the LHDNM in determining what constitutes a

comprehensive and good quality contemporaneous transfer pricing

documentation for persons falling and not falling under scope 3.1 of the LHDNM

Transfer Pricing Guidelines 2012.

Jawapan LHDNM

Contemporaneous TP Documentation means: 1. Timing – Submitted within 30 days upon request 2. Quality – Transfer pricing documentation should abide by requirements in the

Rules and Guidelines, especially its presentation, should address all the

requirements in para 25 of the Guidelines


of 99

Example 2 - English Translation of Transfer Pricing Tax Audit Letters are

needed

Letters received from the LHDNM in relation to transfer pricing matters are in

normal circumstances, very technical in nature given the complexity of the

subject matter. The letters received are currently only available in the official

language, Bahasa Malaysia only.

Some taxpayers have experienced receiving letter from the LHDNM amounting to

16 - 23 pages. As most of the headquarters are based overseas, this has

resulted in the taxpayer/tax agent spending at least 2-3 days to decipher and

translate the letter.


As transfer pricing related issues usually involve multinationals who may not

know our official language, an English translation is required.

An English translation of the letter will assist in meeting the request of the

LHDNM in a more expeditious manner as meanings would not be lost in

translation.

The request for an English translation of the letter only applies to non-requesting

for information letter.

Jawapan LHDNM

IRBM can only provide the letter in Bahasa Malaysia and are not oblige to translate it.

The letters are directed to the tax agents who have been appointed to handle all

correspondents and tax matters of its clients.

3 Penalty rates imposed following the second time of audit onwards

Example – Clarification is needed on such penalty rates and what would be

regarded as second time of audit

The penalty rates which can be imposed following an audit are listed in the

LHDNM’s Tax Audit Framework. These include the penalty of 100% under


of 99

S.113(2) of the ITA imposed following the second time of audit for Monitoring

Deliberate Tax Defaulter (MDTD) cases.

The penalty rates which can be imposed following the second time of audit

onwards for non-MDTD cases are not available to the public.


We would like to seek clarification on the following:

What are the penalty rates which can be imposed following the second time of

audit onwards?

In the case where a transfer pricing audit or a tax investigation was initially

undertaken on a company, would a separate tax audit undertaken

subsequently on that company be regarded as the second time of audit

onwards?

Jawapan LHDNM

Audit kali kedua bagi kes bukan MDTD, kadar penalti adalah seperti yang

dinyatakan dalam Rangka Kerja Audit Cukai.

Garis Panduan untuk struktur penalti baharu akan dikeluarkan.


of 99

3. Filing Issues


of 99

1 System/system update

Example 1 - e-Filing System

1) Acknowledgement slip on-screen displayed the following message:

“Makluman >Borang anda masih belum dihantar > Keluar” notwithstanding

that e-return has been submitted and hardcopy of the e-return and

acknowledgement slip has been printed. This incident happened on May 17,

2015 under the Tax Agent module. However, no proof of acknowledgement

slip screen shot is available.

2) Unable to key-in claims for reliefs. The e-Return was automatically submitted

the next day without claim of reliefs. This incident happened on May 14, 2015

under the Tax Agent module.

3) The re-set function for wrong e-return registered under the Tax Agent module

is at times not functioning.


Please look into the above matters.

Jawapan LHDNM

Kes-kes yang diadukan telah diselesaikan pada hari yang dilaporkan. Sekatan keatas ruangan tuntutan pelepasan seperti pembelian komputer, faedah perumahan, suami/isteri/bayaran alimoni adalah bergantung kepada senario. Manakala tuntutan pelepasan yang lain tidak ada sebarang sekatan.

Example 2 - Filing issue - Issuance of hardcopy Forms BE and M

We note that the LHDNM issued hardcopy Forms BE and M for many taxpayers

who have already filed tax clearance returns and left the country.


It is proposed that no Forms BE/ M should be issued for leavers who have done

their tax clearance.

Jawapan LHDNM

Cadangan penambahbaikan akan dipertimbangkan dengan lebih terperinci.


of 99

Example 3 - E-filing Issue

When we registered for filing of employer’s return (Form e-E) based on the

employer’s reference number pre-populated in the Form e-C via e-filing for a

respective entity, we found that the name appeared was for another company in

the TAeF system.

We have contacted the LHDNM’s officer on the above matter and were informed

that the company do not have an E number and we are required to apply for a

new employer’s number instead.


We hope that the LHDNM would look into this matter and resolve the matter

soonest possible.

Jawapan LHDNM

LHDNM sentiasa memastikan maklumat pra isi (Nombor Majikan) pada borang e-

C adalah betul dan teratur.

Example 4 - e-Filing – Proposal for dissemination of information

Under ‘status e-borang’ we are unable to see the list of clients’ returns that have

been submitted or not submitted. However, the list goes back to the first e-filing

which may be many years ago and runs to many pages. Besides, the window

displays all categories of taxpayers – personal as well as companies etc.


It would be helpful if the tax agents can have an option to narrow down the

search, perhaps by category of taxpayer, period filed and YA etc.

Jawapan LHDNM

Cadangan penambahbaikan akan dipertimbangkan dengan lebih terperinci.


of 99

Example 5 – Tax reference number is not updated on a timely basis

For first year filing (ie. Assignee commenced employment in year 2014), the tax

agent encountered problems relating to the registration of the assignee’s e-return.

However, matters were resolved after clarification was sought from LHDNM E-

Filing Help Desk.

Nevertheless, problem arose during the settlement of tax payable through the

LHDNM’s authorised bank Collection Agent. The assignee’s income tax

reference number was not recognised by the bank system (ie. Invalid). Clarified

matters with LHDNM, Collection Branch and was given to understand that for

“new tax payers, the tax reference number will only be updated by the LHDNM

authorised payment agent within a month from the date it was updated in the

LHDNM’s system, it is likely that it will be updated by end of May 2015).


We would appreciate if the tax reference number is updated on a timely basis,

both in the LHDNM system and payment agent to avoid late settlement of taxes.

Jawapan LHDNM

Data pembayar cukai baru akan diserahkan kepada bank setiap minggu.

Disarankan pendaftaran pembayar cukai baru dibuat seminggu sebelum bayaran

dibuat.

Example 6 - E-Filing for Form E, e-M and e-BE

We are unable to access the e-filing systems immediately after we obtained the

tax reference number. Thus, we need to call the LHDNM’s officer many times to

activate the setting.


To improve the e-filing systems.


of 99

Jawapan LHDNM

Mohon pengesahan sama ada perkara ini berlaku semasa penggunaan sistem e-

Filing ejen cukai (TAeF) atau e-Filing Individu.

2 Filing of Form E for dormant companies including companies which have

not commenced operations (This issue was raised for the Desire Meeting

No. 1/2015 held on 7 April 2015 and recorded in the DESIRE No. 1/2015

Minutes, Page 20, No. 11)

According to LHDNM’s filing programme for income tax return forms (ITRF) for

the year 2015, companies, limited liability partnerships, trust bodies and co-

operative societies which are dormant and / or have not commenced business

are required to furnish the Form E with effect from YA 2014. In an email dated 10

February 2015, the LHDNM also confirmed this requirement to file the Form E as

follows:

“Setiap syarikat mesti mengemukakan Borang E menurut peruntukan seksyen 83(1)

Akta Cukai Pendapatan 1967 (Akta 53):

“ Every employer shall , for each year, furnish to the Director General a return

in the prescribed form…”

Dengan demikian, adalah satu tanggungjawab statutori bagi sebuah

syarikat/firma sebagai majikan untuk mengemukakan Borang E. Jika syarikat

tidak mempunyai pekerja, syarikat bertanggungjawab melaporkan kepada

LHDNM melalui Borang tersebut bahawa mereka tidak mempunyai pekerja.

Dalam hal ini, syarikat yang menentukan/melaporkan tiada/siapakah

pekerjanya. Maklumat tersebut adalah dalam pengetahuan syarikat dan

Borang tersebut diperlukan oleh LHDNM untuk mengumpul maklumat

tersebut.”


We would like to seek clarification from LHDNM on the following:

(a) As Section 83(1) of the ITA indicates that it is the obligation of employers to

furnish the Form E to LHDNM, we would like to understand the basis for

LHDNM’s view that companies, limited liability partnerships, trust bodies and

co-operative societies are considered as employers in cases where they have

no employees with them.


of 99

Jawapan LHDNM

Menurut subseksyen 83(1) ACP 1967, adalah menjadi tanggungjawab

syarikat/majikan mengemukakan Borang E untuk memaklumkan LHDNM

sama ada ia ada pekerja atau tidak.

(b) LHDNM’s filing programme for income tax return forms (ITRF) for the year

2015 also mentions that the companies, limited liability partnerships, trust

bodies and co-operative societies which are dormant and / or have not

commenced business are required to furnish the ITRF with effect from YA

2014. We noted that for cases where there are no employees, the information

required in the Form E can also be found in the ITRF. In this respect, we

would like to understand the rationale for LHDNM’s requirement for the Form

E to be furnished for the purpose of collecting information where there are no

employees as there appears to be duplication in furnishing both the ITRF and

the Form E.

Jawapan LHDNM

Tidak ada duplikasi sebab tanggungjawab pengemukaan BNCP adalah di

bawah seksyen 77/seksyen 77A, ACP 1967 manakala pengemukaan Borang

E di bawah subseksyen 83(1) ACP 1967.


Minutes, Pages 20-21, No. 11. The Chairman of the DESIRE Meeting No.

1/2015 meeting has proposed for this issue to be discussed at a workshop.

Additional note:-

Subsequent to the above, LHDNM clarified in its emails to CTIM on 23 April

2015 and 23 March 2016 on the administrative concession whereby

employers which are not companies (for example sole proprietors,

partnerships, co-operative societies, limited liability partnerships, trust

bodies, business trusts) need not furnish Form E if they do not have any

employee and have not registered for file E. However if the non-company

employer has a file E, then it is required to furnish Form E irrespective of

whether it has any employee or not. This concession does not supersede

the requirement of subsection 83(1) of ITA 1967.




of 99

3 Taxation on OHQ expatriate’s employment income

Example 1

Expatriates working in an OHQ are taxed only on that portion of their chargeable income attributable to the number of days that they are in Malaysia.

In practice, the employment income of an expatriate declared in the Form BE is

the net amount (i.e. gross less portion of income exempted). However, the

LHDNM officer issued Form JA on the expatriate based on the gross employment

income, without taking into account the OHQ status of the expatriate and

apportioning the income based on the number of days the expatriate is in

Malaysia.


We would request the LHDNM to check the status of the company (employer)

before issuing Form JA to an expatriate. The LHDNM can raise queries if further

documentation is required or request for the income tax computation if needed.

This will eliminate the need for taxpayers to file an appeal on the Form JA issued.

Jawapan LHDNM

Tindakan untuk pindaan ke atas Borang BE dan M Tahun Taksiran 2016 dengan memasukkan ruangan bilangan hari ketiadaan di Malaysia yang dikecualikan cukai.

Mohon CTIM kemukakan maklumat lengkap kes yang dirujuk untuk penelitian

lanjut oleh LHDNM.

Example 2 - Form BE -- Chargeable Income Exempted From Tax (This issue

was raised at the Desire Meeting No. 1/2015 held on 7 April 2015 and

recorded in the DESIRE No. 1/2015 Minutes, Page 23, No. 14)

There is no column for deduction of chargeable income exempted from tax, such

as exemption of chargeable income for employment with company granted the

status of OHQ. In the absence of the column, the said exemption is set-off

against the statutory employment income for the purpose of disclosure in the tax

returns. Although the net effect is the same, it does not reflect the accuracy of the

statutory employment income as the mechanism of computing the income

exempted is after the claim of reliefs.


of 99

CTIM would like to suggest that a column be provided for declaration of non-

taxable income / exempted income in Part B, after row B10.

Tindakan BDO JOC

Jawapan LHDNM:

Perkara tersebut diambil maklum dan LHDNM akan mengkaji dan

mempertimbangkan cadangan pihak persatuan untuk tindakan dari segi undang-

undang.

(Extracted from item 1 of LHDNM’s minutes of Operational & Technical Dialogue

No. 1/2014 on 17 February 2014)


CTIM: We would like to request for an update on the status of the LHDNM’s response

above.


Minutes, Page 23, No. 14. The Chairman of the DESIRE Meeting No. 1/2015

has proposed for this issue to be discussed at a workshop.

Jawapan LHDNM

Tindakan untuk pindaan ke atas Borang BE dan M Tahun Taksiran 2016 dengan

memasukkan ruangan tolakan pendapatan yang dikecualikan dari cukai.




of 99

4. LHDNM Website Issues


of 99

1 LHDNM website update

Example 1 - Double taxation agreement – Netherlands – Article 12 (Interest)

In Paragraph 2 of the Article above, LHDNM’s version of the DTA is as follows:

“2. However, such interest may also be taxed in the State in which it arises

and according to the laws of that State, but if the recipient is the beneficial

owner of the interest the tax so charged shall not exceed 15 per cent of the

gross amount of the interest.”

The correct rate should be 10% and not 15%. The rate was amended from 15%

to 10% in accordance to the 1996 Amending Protocol.

However, such Protocol is not available on LHDNM’s website.

Please refer to the following link:

http://www.itc-leiden.nl/portals/7/downloads/verdragen/ENG/Malaysia.pdf


We would request the LHDNM to update its website regularly. The LHDNM will

need to relook into the list of DTAs and ensure that all the relevant changes

and/or protocols are factored in/disclosed.

Jawapan LHDNM

Portal Rasmi LHDNM yang jelas menunjukkan bahawa interest rate tersebut adalah yang terkini. Protokol tersebut (PU(A) 274/1998) terkandung di muka surat 26 PPPDK Malaysia - Netherland sebagaimana yang dipaparkan di portal rasmi Hasil.

Tindakan kemaskini senarai PPPDK dan sebarang pindaan dilakukan dari

semasa ke semasa.

Example 2 – Tax File Registration (Under Company)

Who need to register company tax file?

http://www.itc-leiden.nl/portals/7/downloads/verdragen/ENG/Malaysia.pdf


of 99

Registration of company's tax file is the responsibility of the individual who managing and

operating the company.

Where a company commenced operations; they need to apply for registration of a tax

file.

Companies, limited liability partnerships, trust bodies and cooperative societies which

are dormant and/or have not commenced business are required to register and furnish

Form E with effect from Year of Assessment 2014.

For further reference please refer Filing Programme for Return Forms in the Year 2015.


Since dormant companies are also required to file tax returns wef YA 2014, tax

estimates wef YA 2016 and Form E wef year 2014, the 2nd paragraph as above

highlighted in yellow would need to be amended.

As for the 3rd paragraph above highlighted in green, since the filing of Form E is

mentioned here after the tax file registration, it should also state the requirement

to file the tax returns for dormant companies and / or have not commenced

business wef YA 2014 and to file the tax estimate for dormant companies

(excluding those which have not commenced operation) wef YA 2016.

Alternatively, to delete the 3rd paragraph highlighted in green as this part is

already stated in LHDNM’s website under the heading ‘Company – Tax Payer’s

Responsibilities’.

We would propose that the LHDNM update this part of the website accordingly.

Jawapan LHDNM

Cadangan telah diambil tindakan.

Example 3 - Who needs to register tax file (Under Employer >> Employer

Info)

For those business or company which has employees shall register employer tax

file.


http://www.hasil.gov.my/pdf/pdfam/ProgramMemfailkanBNCP_2015_2.pdf


of 99

We would propose that the LHDNM update this part of the website accordingly.

Jawapan LHDNM

Cadangan akan diambil tindakan.

2 System update

Example 1 - Website - e-filing system

There is an error to register a new “penyelia” in the system. A message will be

prompted that the user has been added to the system although when we

performed a check, the user has not been created. This issue is intermittent.


We would request the LHDNM to rectify the problem.

Jawapan LHDNM





Example 2 - Tax agent's name not reflected in the declaration section of the Confirmation of Submission e-C for Year of Assessment 2014 (Pengesahan Penerimaan e-C bagi Tahun Taksiran 2014) slip

It was noted that Forms e-C that were e-filed and printed from mid-April 2015 to

mid-May 2015 did not reflect the tax agent's name in the declaration section of

the Confirmation of Submission e-C for Year of Assessment 2014 (Pengesahan

Penerimaan e-C bagi Tahun Taksiran 2014) slip.


We would request the LHDNM to rectify the problem.


of 99

Jawapan LHDNM






of 99

5. Other Issues


of 99

1 Late correspondences

Example 1 - Forms J received late

Case 1

A member raised an issue regarding four (4) estimated Forms J for YA 2014

dated 22/04/2015 which were sent by Pusat Pemprosesan, Bangi but only

received on 20/05/2015. The due date for payment was 21/05/2015 which the

taxpayers could not pay due to various reasons such as directors not around to

sign the cheque.

The member believes that this issue was raised with the LHDNM many years ago

& resolved. However, it has happened again.

The member spoke to a senior officer at the Collections Unit of the LHDNM

Kuantan Branch to request for extension of time. The officer informed the

member to write in the request but cannot guarantee that extension of time be

given.


It is requested that the Forms J be sent out promptly.

Case 2

There are instances where the Forms J were received late. For example, Form J

dated 22 April 2015 was only received by our office in Ipoh on 18 May 2015. In

another case, the Form J was received only a few days from the deadline of 30

days from the date of the Form J.

This has created unnecessary hassle to the taxpayer in making the settlement to

avoid late settlement penalty.


In view of the postal delay, we hope the LHDNM could grant at least 14 days of

extension of time for those Forms J which are received late.


of 99

Jawapan LHDNM

Permohonan lanjutan masa untuk membuat bayaran boleh dipertimbangkan berdasarkan fakta kes.





Example 2 – LHDNM letters received late (This issue was raised at the

Desire Meeting No. 1/2015 held on 7 April 2015 and recorded in the DESIRE

No. 1/2015 Minutes, Page 8, No. 4)

Members have highlighted to CTIM on cases where LHDNM letters, mainly on

penalties imposed and Form CP500, were received late by taxpayers/tax agents.

Currently, members still have cases where LHDNM letters were received late.

Examples where LHDNM letters were received late include the following:

(a) A LHDNM letter dated 8 January 2015 was received on 23 January 2015. In

the said letter, the LHDNM gave 21 days from the date of the letter to revert

with the information requested. This means that the due date to revert to the

LHDNM is 29 January 2015 and the taxpayer has only 4 working days to

compile the said information.

(b) A LHDNM letter dated 14 October 2014 was received on 18 November 2014

(36 days later). In the said letter, the LHDNM gave the taxpayer 30 days to

revert with the required information but the deadline has since expired as the

letter was received late.


CTIM would like to request for the LHDNM to look into the mailing process to

ensure that reasonable time is given to taxpayers to act on LHDNM letters.

Please refer to the LHDNM’s response in the DESIRE No. 1/2015 Minutes,

Page 8-9, No. 4. The Chairman of the DESIRE No. 1/2015 meeting has

proposed for this issue to be discussed at a workshop.




of 99

Jawapan LHDNM

Semakan telah dibuat di bahagian operasi LHDNM mendapati tiada masalah dari segi kelewatan cetakan dan pos. LHDNM memohon CTIM mengemukakan maklumat lengkap surat yang dimaksudkan bagi tujuan mengenalpasti di mana berlakunya kelewatan. Sama ada kelewatan berpunca dari cawangan atau ibu pejabat yang mengeluarkan surat secara berkelompok atau diperingkat pihak ketiga iaitu pusat percetakan atau POS Malaysia. Bagaimanapun, LHDNM boleh memberi tambahan masa sekiranya dibuktikan kelewatan telah berlaku. Dicadangkan agar surat LHDNM yang akan dikeluarkan kepada pembayar cukai mempunyai tarikh sehingga tiga (3) atau empat (4) hari ke hadapan dari tarikh surat tersebut ditandatangani.





Example 3 - Delay in receipt of LHDNM correspondences

The LHDNM letters usually reach our office at least 10 to 14 days from the date

of the letters. Further, it takes around 3 weeks for the letters to reach our other

offices outside KL. Very often, the due date of payment is either only a few days

away, or already lapsed when we receive the letters. In addition, it is difficult for

us to obtain an extension of time to settle the payment and officer in charge is

reluctant to provide a written confirmation of extension of time.


We hope the LHDNM could be more flexible in granting the extension of time in

writing under the circumstances whereby correspondences are received late by

tax agents or taxpayers.


of 99

Jawapan LHDNM

Mengikut Rangka Kerja Audit Cukai, amalan LHDNM ialah mengeluarkan surat

yang akan diposkan kepada pembayar cukai juga dikemukakan melalui fax atau

emel kepada alamat yang dilaporkan oleh pembayar cukai di dalam Borang C.





Ini untuk mengenalpasti di mana berlakunya kelewatan. Sama ada kelewatan

berpunca dari cawangan atau ibu pejabat yang mengeluarkan surat secara

berkelompok atau diperingkat pihak ketiga iaitu pusat percetakan atau POS

Malaysia.

Example 4 - Notice of penalty (CP522X)

The client received a notice of penalty dated 30 April 2015 on 19 May 2015. The

Notice of penalty requires the penalty to be paid within 14 days of the date of the

letter. In this case, the client only received the letter after the 14 days period.


It is proposed that the LHDNM either send the notices immediately or postdate

the notice or letter taking into consideration the actual processing time it takes for

the LHDNM to prepare the letter, send it out and the time taken for the taxpayer

to receive the letter.

Jawapan LHDNM





Ini bagi tujuan mengenalpasti di mana berlaku kelewatan. Sama ada kelewatan

berpunca dari cawangan atau ibu pejabat yang mengeluarkan surat secara


of 99

berkelompok atau di peringkat pihak ketiga iaitu pusat percetakan atau POS

Malaysia.

Bagaimanapun, LHDNM boleh memberikan tambahan masa sekiranya

dibuktikan kelewatan telah berlaku berdasarkan fakta kes yang menjadi asas

kukuh untuk justifikasi.

2 System / System IT / System Update

Example 1 - Application of tax reference number via online

We have difficulties to contact the LHDNM’s officer when we want to follow-up on

the income tax number after we have made the application via online. The line is

always engaged or disconnected. The process to get the SG number would take

3 working days in practice, but recently has been delayed until 14 to 21 days.

Therefore, to expedite the process, we would need to see the officer after we

registered the tax number.


We would request the LHDNM to consider allocating more staff to handle the

phone calls.

Jawapan LHDNM

Berdasarkan semakan kami 95% permohonan e-daftar yang lengkap berjaya diproses dalam tempoh 3 hari bekerja. Kelewatan pemprosesan biasanya berlaku disebabkan oleh permohonan yang tidak disertakan dengan dokumen yang lengkap. Selain panggilan telefon, pemohon juga boleh menyemak status permohonan melalui web e-Daftar menggunakan nombor permohonan. Bagi pemohon yang menghadapi masalah memuat naik dokumen sokongan, sebagai alternatif pemohon boleh menghantar dokumen sokongan tersebut melalui Borang Maklumbalas Pelanggan di Web HASiL dengan memilih menu Permohonan > Dokumen Bagi Tujuan e-Daftar atau terus kepautan http://maklumbalas.hasil.gov.my/index.php?ky=3a1

http://maklumbalas.hasil.gov.my/index.php?ky=3a1


of 99

Example 2 – Letters & Correspondences

We encountered many instances where documents (e.g correspondences,

notices of assessment, CP 204, etc) of clients meant for our KL office were sent

by the LHDNM to our branches (e.g. Penang, Ipoh, etc). Our branches took some

time to find out whether these documents belong to our KL office.

This resulted in late action being taken on these documents as they have time

sensitive deadlines such as payments have to be made by a certain deadline or

the LHDNM letters have to be responded to by a certain number of days as in the

case of audit adjustments being made by the LHDNM and these need to be

responded on whether the adjustments are agreed.

For example, refund cheque of RM1.5m for our Penang office client was sent by

the LHDNM to our KL office in April 2014.


The Forms e-C submitted to the LHDNM clearly show the address of our office to

whom the client belongs and hence, the LHDNM correspondences should be

sent to that office address, instead of being sent to our other office addresses on

many occasions.

Jawapan LHDNM

Surat-menyurat akan dikeluarkan mengikut alamat terkini surat menyurat dalam database pembayar cukai. Maklumat alamat adalah yang dilaporkan sendiri oleh pembayar cukai dalam BNCP semasa e-Filing. Pembayar Cukai individu dan syarikat juga boleh mengemaskini nombor telefon, alamat - emel, surat menyurat, kediaman, premis perniagaan dan rekod disimpan melalui sistem e-Kemasikini.






of 99

Example 3 - Change of name not updated in the LHDNM’s system

The change of name of the taxpayer was not updated in the LHDNM’s system/e-

filing system even though letters (on the change of name) have been sent to the

LHDNM. The consequence is that the refund cheque was issued in the old name

of the taxpayer and the taxpayer was unable to bank in the cheque.


We hope that the LHDNM would look into this matter and resolve the problem.

Jawapan LHDNM

Maklumat nama pembayar cukai adalah seperti yang dilaporkan sendiri oleh

pembayar cukai dalam BNCP semasa e-Filing dan disimpan dalam sistem

database rekod pembayar cukai. Surat yang diterbitkan oleh sistem adalah

mengikut rekod tersebut.





Example 4 - Changes in tax agent not updated in the LHDNM’s system

Despite numerous letters sent by us to inform the respective LHDNM’s branches

that we are no longer the tax agent for the respective taxpayer, the LHDNM still

continue to send the documents (e.g. notices) to us.


We hope that the LHDNM would look into this matter.

Jawapan LHDNM

Maklumat nama ejen cukai adalah seperti yang dilaporkan sendiri oleh pembayar

cukai dalam BNCP semasa e-Filing dan disimpan dalam sistem database rekod

pembayar cukai. Surat yang diterbitkan oleh sistem adalah mengikut rekod

tersebut. Kemungkinan yang berlaku adalah pembayar cukai sendiri tidak

mengemaskini maklumat ejen cukai terkini beliau sendiri semasa membuat e-

Filing.


of 99





Example 5 - Form J (same as amount stated in ITRF which was e-filed) was

issued by the LHDNM to rectify internal technical problem.

In October 2013, Form J was issued under Section 90(3) of ITA 1967 with late

filing penalty as Company was thought to have not filed its YA 2012 tax return by

the due date.

In actual fact, Company changed its year end from 31 December to 30 June and

its YA 2012 tax return was only due to be filed by 31 January 2014. CP 204B was

submitted to Pusat Pemprosesan in April 2012 but as usual the LHDNM have not

updated their system which resulted in the Form J issued.

An appeal was made against the Form J and a Form JR was subsequently

issued to effectively cancelled the Form J.

The tax return was duly filed on 29 January 2014 and was a deemed assessment.

However, on 14 April 2015 another Form J was issued by the LHDNM.

We called and spoke to the assessor and was informed that because of Form J

was issued before, their system could not capture the ITRF submitted on 29

January 2014 and the second Form J was automatically issued again to rectify

their own records but since the tax assessed is the same as the ITRF, no further

action is required by the taxpayer.


As technically it is wrong to issue a Form J when the tax return was a deemed

assessment, we would request the LHDNM to rectify their system and not to

generate Form J again under similar circumstances.

Jawapan LHDNM

Masalah ini telah di atasi.


of 99

Example 6 - Update of CP204/204A records

The LHDNM’s record is not consistent; CP204/204A records are usually updated

accordingly by Pusat Pemprosesan but not at the Assessment branch end.


We would request the LHDNM to update the records on timely basis.

Jawapan LHDNM

Pemprosesan CP204/204A dilakukan oleh Pusat Pemprosesan Maklumat sahaja. Pembayar cukai disarankan untuk menggunakan e-Filing.

3 Assessment raised for time barred YAs

The ITA 1967 provides that assessments raised for years of assessment which

have been time-barred by Section 91(1) of ITA 1967 where Sections 91(3) and

91(4) are not valid.

Under Section 91(1), the LHDNM is empowered to raise assessments within five

years after the expiration of a year of assessment unless in cases where there is

fraud, wilful default or negligence (Section 91(3)) and determination, revocation,

withdrawal or cancellation (of the matters described in Section 91(4)).

However, taxpayers are often served notices of additional assessment beyond

the five year limit even though Sections 91(3) and 91(4) are not applicable.


We would like to understand the rationale / authority for raising assessments for

time barred YAs.

For transfer pricing audits, time-barred assessments are frequently raised. As a

result, taxpayers have to appeal via Form Q and apply for their appeal to be

considered by the Dispute Resolution Department and if necessary, for their

appeal to be considered by the SCIT. We would be grateful if the LHDNM could

clarify the circumstances under which a taxpayer is considered to be negligent

with regard to its transfer pricing matters.


of 99

Jawapan LHDNM

Peruntukan di bawah seksyen 91(3), ACP 1967 menetapkan kuasa Ketua Pengarah untuk membangkitkan taksiran tambahan di luar jangkauan tempoh lima tahun sekiranya wujud penemuan elemen-elemen yang meragukan. Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah mengemukakan maklumat terperinci/lengkap kes yang mengandungi nama pembayar cukai, no rujukan fail cukai dan tahun taksiran kes yang dirujuk untuk penelitian lanjut oleh LHDNM


of 99

7. Penalty Issues


of 99

1 LHDNM Media Release (24 April 2015): Reduction of penalty and waiver of

tax increase for voluntary disclosure and early settlement of tax arrears

1. Table 1 on tax penalty, i.e. waiver of tax increase up to 30/11/2015 under

S112(3) and 113(2)


Does the penalty to be waived include the Section 107C(10) tax under-

estimation penalty?

Jawapan LHDNM

Kenaikan S107C(10) yang dikenakan tidak mengambilkira penalti S112(3)

and 113(2).

2. Item ii (for taxpayers who failed to submit their Income Tax Return

Forms for previous YAs)


Does it apply to taxpayer where a provisional Form J had been issued under

Section 90(3) and late submission penalty had been raised? If the subsequent

filing shows no tax payable, will the late submission penalty as stated in the

provisional Form J be waived?

Jawapan LHDNM

Tawaran pengurangan penalti dan penghapusan cukai tidak terpakai dalam

kes sedemikian.

3. Cawangan Cukai Besar tax files with corporate tax issues, eg. big

companies and companies in specialised industries


We would like to request for the penalty waiver mentioned in the LHDNM

Media Release to be extended to such cases.

http://www.ctim.org.my/file/news/14/03214_Reduction%20of%20Penalty%20&%20waiver%20of%20tax%20increase%20for%20voluntary%20disclosure%20&%20early%20settlement%20of%20tax%20arrears%20-%20LHDNM%20Media%20Release%20(270415).pdf

http://www.ctim.org.my/file/news/14/03214_Reduction%20of%20Penalty%20&%20waiver%20of%20tax%20increase%20for%20voluntary%20disclosure%20&%20early%20settlement%20of%20tax%20arrears%20-%20LHDNM%20Media%20Release%20(270415).pdf


of 99

Jawapan LHDNM

Tawaran pengurangan penalti dan penghapusan cukai tidak terpakai dalam

kes sedemikian.

2 System update

Example 1 - Payment not captured in the LHDNM’s system promptly or

incorrectly

Case 1:

The taxpayer remitted payment for 5th instalment by the stipulated deadline.

However, the LHDNM’s system did not capture the above payment and therefore,

the LHDNM imposed late payment penalty under Section 107C(9) of the ITA on

the 5th instalment.

Subsequently, the LHDNM imposed the same penalty on the 6th instalment as

they deemed the payment made for 6th instalment as payment made for 5th

instalment.


We would like to raise the following issues for the LHDNM’s attention:

Firstly, the LHDNM’s system did not capture the instalment payment settled by

the taxpayer and wrongly imposed penalty on the taxpayer. Secondly, the

number of instalment has been indicated when the taxpayer remitted its payment.

The LHDNM’s system should not utilize the payment made for 6th instalment to

set-off with the 5th instalment.

We hope that the LHDNM will update the payments received promptly and

accurately in the LHDNM’s system and waive all the penalties which have been

wrongly imposed.


of 99

Jawapan LHDNM

Bayaran yang diterima akan digunakan untuk menjelaskan ansuran kena bayar

bagi bulan semasa dahulu. Sekiranya masih terdapat lebihan bayaran, lebihan

tersebut akan igunakan menjelaskan ansuran berikutnya.

Sekiranya bayaran dibuat untuk tahun taksiran tersebut dengan kod bayaran

yang betul, sistem tiada masalah menggunakan tarikh bayaran bagi menentukan

bilangan ansuran.

Case 2:

It appears the tax payment position in the LHDNM’s system have not been

updated promptly. The LHDNM failed to take up the MTD paid into its system on

time and issued CP616 / CP620 to inform the taxpayer that there are outstanding

tax payable which the taxpayer had in fact fully settled. This had created a lot of

unnecessary administrative work and time to call the LHDNM’s officers and

fax/email them the official receipts in order for them to update into the system

accordingly.

Form e-BE 2014 was submitted to the LHDNM on 9 December 2014. A letter

(CP616) dated 16 December 2014 was received from the LHDNM informing the

taxpayer that the MTD amount for October and November 2014 has yet to be

settled by the employer. Notification letter (CP546X) dated 26 December 2014

informing the outstanding tax liability was received. We wrote to the LHDNM with

a reconciliation of tax payment position to prove that the outstanding tax had

been fully settled. We received the tax clearance letter dated (CP621) dated 12

February 2015 informing the employer to release the money withheld for

settlement of tax to the employee.


We propose the LHDNM to update the tax payment position into the system

promptly to avoid unnecessary time spend on preparing the reconciliation of tax

payment position to prove that the tax has been fully settled before obtaining the

tax clearance letter.

Jawapan LHDNM

Penyata Kedudukan Cukai dikeluarkan berdasarkan kedudukan lejar semasa.


of 99

Bayaran-bayaran PCB yang dimuatnaik ke dalam lejer pembayar cukai adalah

bergantung kepada status bayaran PCB yang diterima.

Piagam pelanggan menyatakan setiap bayaran akan dimuatnaik ke dalam lejer

pembayar cukai adalah selewat-lewatnya dalam tempoh masa 7 hari bekerja

bagi kes yang tidak bermasalah.

Manakala bagi status bayaran yang bermasalah, LHDNM hanya akan

memuatnaik bayaran selepas memperolehi maklumat yang diperlukan daripada

majikan.

Case 3:

The taxpayer has made the payment but it was captured in the wrong account

code or year of assessment.

The LHDNM had imposed a penalty of RM8,481.60 for late payment of balance

of tax payable of RM54,720.00 for the YA 2013. However, the taxpayer had

actually fully settled the estimated tax payable of RM285,364 for the year of

assessment 2013 instead of RM220,189 as indicated in the LHDNM’s Form

CP17(STS) dated 23 October 2014.

We had contacted the assessment branch to verify the matter and was informed

by the LHDNM’s officer that the remaining balance of tax payable of

RM54,720.00 was wrongly captured into YA2014 account. The LHDNM’s officer

had verbally informed that the error would be rectified in the LHDNM’s system but

did not send any written notification to cancel the penalty imposed earlier or any

letter to inform the taxpayer to ignore the Form CP17(STS) dated 23 October

2014.


We propose that the LHDNM should key in the payments into the LHDNM’s

system accurately and promptly to avoid any unnecessary administrative work

and time spent in dealing with the penalty wrongly imposed.

The LHDNM should also issue a written notification to cancel the penalty which

has been wrongly imposed for the taxpayer’s record purposes.


of 99

Jawapan LHDNM

Ketepatan bayaran bagi sesuatu tahun taksiran adalah bergantung kepada kod

bayaran yang betul. Untuk itu LHDNM perlu mengenalpasti samada pembayar

cukai telah membuat bayaran di kaunter LHDNM, kaunter bank dan sebagainya

bagi menentukan punca kesilapan berlaku.

Wakil cukai boleh mengemukakan kes-kes yang berkaitan jika sekiranya

bayaran telah dibuat berlandaskan prosedur yang betul bagi penelitian lanjut

LHDNM.

Example 2 - Penalty notification – Form CP225a

The LHDNM has been issuing the Form CP 225a informing that taxpayers are

late in the payment of tax instalments. However, the taxpayers paid the

instalments on time. There are also instances where such Forms CP 225a are

issued to taxpayers who have been issued with special exemption from paying

instalments. This creates unnecessary stress to the taxpayers and time is wasted

attending to the “late payment” notices.


The LHDNM should be certain that taxpayers are late before issuing the Form CP

225a.

Jawapan LHDNM

Ketepatan bayaran bagi sesuatu tahun taksiran adalah bergantung kepada kod

bayaran yang betul. Untuk itu LHDNM perlu mengenalpasti samada pembayar

cukai telah membuat bayaran di kaunter LHDNM, kaunter bank dan sebagainya

bagi menentukan punca kesilapan berlaku.

Wakil cukai boleh mengemukakan kes-kes yang berkaitan jika sekiranya

bayaran telah dibuat berlandaskan prosedur yang betul bagi penelitian lanjut

LHDNM

3 Penalty under subsection 103 of ITA 1967

The tax filing programme issued by the LHDNM states the following:


of 99

“This grace period also applies to payment of the balance of tax under

subsection 103(1) of ITA 1967”.

However for payments made vide cheque deposit, penalties were still imposed

even though payment was made during the grace period.

For example: Payment made via cheque deposit at Public Bank on 15 July 2015

@ 5.54 pm was imposed penalty of 10% on the total tax payable and additional

5% penalty on the 10% penalty imposed.

While it is acknowledged that the cheque deposit slip stated that deposits made

after 4 pm would be processed in the following working day, however this does

not change the fact that the payment was made within the grace period and

therefore penalty should not be applied. From the perspective of the taxpayer, the

cheque has been deposited at a bank authorized by the LHDNM within the time

allowed in the filing programme.


Late payment penalty should not be imposed on such cases.

Jawapan LHDNM

Kenaikan S.103 tidak dikenakan bagi bayaran yang dibuat dalam tempoh yang

telah dibenarkan. Kenaikan yang telah dikenakan boleh dipertimbangkan untuk

dihapuskan berdasarkan fakta yang dikemukakan.

Untuk memastikan perkara ini tidak berulang, wakil cukai / pembayar cukai adalah

dinasihatkan membuat bayaran menggunakan platform deposit cek lebih awal

memandangkan maklumat bank tidak dapat membezakan bayaran dalam tempoh

dan bayaran hari berikutnya yang dihantar bersama kepada LHDNM.


7. Tax Appeal or Dispute Resolution Issues


of 99

1 Form Q

Example 1 - Appeal against notice of assessment issued under subsection

90(3) of the Income Tax Act, 1967 (“ITA”)

A notice of assessment for the year of assessment 2013 under subsection 90(3)

of the ITA was issued to the taxpayer on 6 November 2014.

The taxpayer was not able to come up with the audited accounts and tax

computation for the year of assessment 2013 for submission to the LHDNM

within 30 days from the date of the assessment. Hence, the appeal against the

assessment was made by way of a letter of objection instead of the prescribed

form (Form Q) since it is the LHDNM’s current practice of not accepting the Form

Q without the audited accounts, tax return and tax computation. The letter of

objection was submitted to the LHDNM (Cawangan Johor Bahru) on 18

November 2013 by post.

On 30 December 2014, the tax agent received a letter from the LHDNM

(Cawangan Johor Bahru) dated 24 December 2014, which stated that any appeal

or objection against an assessment must be made within 30 days from the date

of the notice of assessment. In addition, the LHDNM stated that the appeal must

also be complete, and an appeal is only considered complete when the income

tax return (Forms C and R) for the relevant year of assessment is submitted to

the LHDNM. The LHDNM therefore deemed the assessment as final and

conclusive pursuant to subsection 97(1) of the ITA.

In view of the LHDNM’s current practice of not accepting appeals against

assessments made under subsection 90(3) of the ITA without the set of audited

accounts, tax return and tax computation, a taxpayer is prevented from appealing

against the assessment under the ITA.

However, both the relevant legislation and the public ruling do not expressly state

that the Form Q must be accompanied by the audited accounts, tax return and

tax computation.


We would to seek clarification on the basis for the LHDNM’s current practices of

not accepting the Form Q without the audited accounts, tax return and tax

computation.


of 99

Jawapan LHDNM

Dimaklumkan bahawa tiada syarat yang dikenakan semasa mengemukakan

Borang Q haruslah bersama dengan akaun beraudit.





LHDNM akan memastikan maklumat tersebut akan dipatuhi oleh Cawangan

Johor Bharu.

Example 2 - Tax appeal process – Filing of Form Q and details to be

disclosed in the Form Q

The process of filing of Form Q has been laid out in Public Ruling No. 3/2012 –

Appeal Against An Assessment.

The problems that have been encountered by the taxpayer in submission of the

Form Q are as follows:

(a) There were cases where the LHDNM officer refused to accept the Form Q as

it was alleged that the Form Q has been completed with the wrong details

(despite earlier confirmation obtained by the taxpayer from the LHDNM officer

on such details).

e.g. Some LHDNM officers requested that the name of the manager be stated

as the person appealing whereas other officers accept the name of the

company instead.

(b) There are differing practices even within the same Branch with different units

whereby Form Qs being completed in the same manner can be accepted by

one unit but rejected by another unit.

Such problems can lead to the taxpayer being late in submitting the Form Q as it

takes time to redo the Forms again according to the LHDNM’s specification.


of 99


Kindly confirm that the name of the director must be stated as the person

appealing in the Form Q. Please inform us if there are any changes to these

requirements.

Jawapan LHDNM

Orang yang bertanggung jawab bagi pihak syarikat untuk menandatangani

Borang Q seperti yang telah diperuntukkan di bawah seksyen 75 ACP 1967

contohnya nama pengarah dan sebagainya.

2 Revised tax computation

Example 1 – Revised income tax computation (ITC) for the YA 2006 and YA

2007 which were rejected by the LHDNM - Jabatan Cukai Korporat (JCK)

The taxpayer submitted the revised income tax computation (ITC) to the LHDNM-

JCK on 31 December 2012. However, the LHDNM disagreed with the taxpayer’s

revised ITC and informed us via their letter dated 24 November 2014 and

requested the taxpayer to submit an appeal for relief (Form Q) to Special

Commissioners of Income Tax within 6 months of the aforesaid letter.

The tax agent submitted the Form Q to the LHDNM-JCK on 8 April 2015 but the

Form Q was not accepted and the tax agent was advised by the LHDNM’s officer

at ‘one stop service counter’ at the LHDNM-JCK to submit the Form Q to the

LHDNM - Cawangan Petaling Jaya (LHDNM-PJ) instead. The reason given was

that the taxpayer’s file has been relocated to the LHDNM-PJ following the

decentralization of income tax files from Cawangan Pembayar Cukai Besar

(CPCB) (formerly known as JCK) to Cawangan Petaling Jaya for Corporate

Taxpayers with turnover (sales) less than RM30 million.

The tax agent then tried to submit the Form Q to the LHDNM-PJ as instructed but

the LHDNM-PJ office insisted that the Form Q should be handled by the LHDNM-

JCK. Therefore they only acknowledged receipt of our cover letter but not the

Form Q.

The relocation of income tax file has delayed the taxpayer’s appeal as neither the

officer in the LHDNM-CPCB nor the LHDNM-PJ was willing to accept this appeal.


of 99


It is proposed that the LHDNM should maintain its “no wrong door’ policy and its

officer should accept the Form Q.

Jawapan LHDNM





Example 2 – Tax appeal pursuant to Section 131(1) of ITA 1967

1. The taxpayer committed an error or mistake when he submitted his tax return.

He omitted (by forgetting) to claim the investment tax allowance on one

qualifying machine of significant value.

The original tax return’s tax payable amount is Nil.

The revised tax return after the error is rectified is also Nil, but there would be

a carried forward balance for investment tax allowance.

The Company benefits from investment tax allowance (100% on qualifying

expenditure against 100% of statutory income).


What avenue of appeal is available to the taxpayer? In view of the above, will

the LHDNM accept a claim of relief in respect of error or mistake in spite of

the Nil tax paid under existing legislation?

Jawapan LHDNM

Tidak boleh. Ini kerana mengikut peruntukan seksyen 131 menyatakan permohonan relif hanya boleh dibuat sekiranya terdapat taksiran cukai yang berlebihan disebabkan oleh kesilapan dan kekhilafan semasa pengemukaan Borang Retan.


of 99

2. Section 131(1) of ITA 1967 states that “if any person who has paid tax for any

year of assessment alleges that an assessment relating to that year is

excessive by reason of some error or mistake…he may within five

years…make an application…for relief”.

The above limits the relief in respect of error or mistake for claimants who

have paid tax. In the situation described to the left, the taxpayer had paid no

tax (because of unabsorbed balances) in that particular year of assessment.

Thus he technically cannot make a claim for relief in respect of this mistake.

In Singapore’s Section 93A of the ITA,

‘1) If any person alleges that for any year of assessment –

a. an assessment is excessive; or

b. any unabsorbed loss, allowance or donation that may be carried

forward ought to be of a higher amount than that set out in an

assessment,

by reason of some error or mistake –

(i) in the return or statement made by him for the purposes of the

assessment; or

(ii) where he is exempted from liability to furnish a return under Section

62(2), in the notice of assessment served on him,

he may, at any time not later than 6 years (if the year of assessment

within which the assessment was made in 2007 or a preceding year of

assessment) or 4 years (if the year of assessment within which the

assessment is made is 2008 or a subsequent year of assessment) after

the end of the year of assessment within which the assessment was

made, make an application in writing to the Comptroller for relief.’

Based on the above, in Singapore, there is no requirement for the taxpayer to

have paid tax before the taxpayer could claim a relief in respect of error or

mistake.


What avenue of appeal is available to the taxpayer? If not, will the LHDNM

work with the relevant ministries and lawmakers on amending Section 131 to


of 99

something similar to Singapore’s Section 93A so that taxpayers who are non-

tax paying could also claim relief under this section?

Jawapan LHDNM

Borang 15C boleh diisi oleh pembayar cukai untuk permohonan relief berhubung kesilapan pelaporan. LHDNM akan menyemak dan mengkaji peruntukan undang-undang bagi tujuan untuk cadangan pindaan perundangan sedia ada bagi mengendalikan isu yang dikemukakan. Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah

mengemukakan maklumat terperinci/lengkap kes yang mengandungi

nama pembayar cukai, no rujukan fail cukai dan tahun taksiran kes yang

dirujuk untuk penelitian lanjut oleh LHDNM.


of 99

8. Tax Payment or Refund Issues


of 99

1. No statement of tax position issued

In the past, a statement of tax position of a taxpayer will be issued by the LHDNM

followed by the refund cheque. However, the LHDNM has recently issued refund

cheques without any statement of tax position. Numerous follow-ups with the LHDNM

are required in order to obtain the statement of position from the LHDNM.


We would like to suggest that the LHDNM reverts to the past practice where statement

of position is issued so that tax agents / taxpayers are able to verify the amount of the

refund cheque.

Jawapan LHDNM

Pembayar cukai boleh merujuk kepada e-Lejar dalam myTax untuk semakan lanjut.

Example 2 - Notices of Assessment (Forms J/JA/JR) and tax clearance letter

(TCL) are not issued with the tax payments position

We are unable to advise the client on the exact payment to be made in the absence of

the payment position since the amount of tax payable as stated in the TCL usually

does not tie with our records. In order for the LHDNM to issue the tax payment position,

a written request would normally be submitted but it takes 3-5 working days for the

LHDNM to issue the position. This has caused delays from our end in reconciling the

tax position and advising the client to make payment.


We would request the LHDNM to either enclose the tax payment position when issuing

the abovementioned Notices or TCL; or provide tax agents access to the tax position

of its authorised individuals via the tax agent portal similar to the e-ledger in the

individual e-filing portal.

Example 1 - Refund cheque from the LHDNM without statement of tax position


of 99

Jawapan LHDNM

Kedudukan Cukai: Borang J/JA/JR

Wakil cukai yang dilantik oleh pembayar cukai seharusnya mempunyai maklumat

kedudukan cukai yang terkini berdasarkan taksiran yang telah dikemukakan dan

bayaran yang telah dibuat. Semakan bayaran cukai boleh dibuat melalui e-lejar.

Kedudukan Cukai: Surat Penyelesaian Cukai (SPC)

Unit Pungutan Cawangan akan memastikan surat tuntutan bayaran cukai bagi akaun

berbaki debit dikeluarkan kepada pembayar cukai.

Surat Penyelesaian Cukai yang dikeluarkan oleh Unit Penaksiran telah mendapat

pengesahan dari Unit Pungutan bahawa semua cukai telah dibayar sepenuhnya.

2. Compensation on late tax refund pursuant to Section 111D of the ITA

With effect from the year of assessment (YA) 2013, taxpayers who file their tax return

for a YA by the due date will be eligible for a compensation of 2% per annum on any

tax overpaid. Taxpayers that do not file their tax return by the due date are not entitled

to the compensation.

Based on Item 2.3(iii) of the Joint Memorandum on Issues for Post 2012 Budget

Dialogue held on 2 April 2012, the LHDNM has clarified that the due date would take

into account the grace period and extension of time granted to taxpayers.

An extract of the said dialogue is enclosed for your reference:

“iii. Non-application of the new Section 111D

a. One of the non-applicability factors of the above provision is when tax returns

are not submitted by the due date. In this respect, the Institutes wish to seek

clarification that the due date includes extended due dates (e.g. grace period

granted by the LHDNM across the board, or specific extension of time granted

to taxpayers).

Answer by LHDNMM:

Section 111D is not applicable where the tax returns are not submitted by

the due date. Due date includes grace period and extension of time

granted to taxpayers.”


of 99

However, it has been brought to our attention that in practice, the LHDNM has in

certain cases disallowed the entitlement of the compensation for tax returns that were

submitted during the grace period or extension of time. We have some cases where

compensation for overpayment of tax was not awarded for refund received after 90

days from the date of submission of tax returns via e-filing.

We understand from the LHDNM that no compensation will be awarded as the tax

return was not submitted within the statutory due dates.

Furthermore, at the DESIRE meeting held between LHDNM and the professional

bodies on 7 April 2015, the LHDNM mentioned that they had recently held an internal

discussion on the definition of “due date” for the purpose of Section 111D of the ITA

and their legal department took the view that due date shall refer strictly to the

statutory due date under Section 77 and Section 77A of the ITA which the decision is

consistent with the Operational Guideline 1/2014: Guideline on Compensation on Late

Refund of Overpayment of Tax issued on 15 May 2014. Any tax return filed after the

statutory due date under Section 77 or Section 77A of the ITA but within the grace

period granted by the LHDNM shall not be eligible for compensation for late refund of

overpayment of tax.


We would like the LHDNM to confirm the practice and if it is different from the

clarification of the Joint Memorandum, an official announcement should be issued to

the taxpayers. The effective date of the practice should be starting from the date of the

announcement.

This issue was raised to address the availability of refunds to taxpayers who file their

returns after the legislative due date but within the extended deadline granted by the

LHDNM. It is noted that the Guideline on Compensation on Late Refund of

Overpayment of Tax issued by the LHDNMM on May 15, 2014 did not address the

issue.

If the LHDNM has changed their view on the definition of “due date” and informed the

public only via the issuance of Operational Guideline 1/2014 on 15 May 2014, we

would also like to seek confirmation that any late refund made by the LHDNM between

2 April 2012 and 15 May 2014 to those taxpayers who had submitted their tax returns

within the grace period will be given the 2% compensation.


of 99

Jawapan LHDNM

Kriteria pembayar cukai yang layak diberi pampasan adalah seperti yang dinyatakan

dalam Garis Panduan Pembayaran Pampasan Kerana Kelewatan Membuat Bayaran

Balik Lebihan Cukai Pendapatan (GPDHN 1/2014):

1. Borang Nyata Cukai Pendapatan (BNCP) dikemukakan sebelum atau pada 30 Apri

bagi individu yang berpendapatan penggajian

2. BNCP dikemukakan sebelum atau pada 30 Jun bagi individu yang menjalankan

perniagaan.

3. BNCP dikemukakan dalam tempoh tujuh (7) bulan dari tarikh perakaunanberakhir

bagi kes syarikat/perkongsian liability terhad/badan amanah/koperasi.

Tarikh akhir pengembalian BNCP selain syarikat dan syarikat di atas adalah seperti

dalam peruntukan akta di bawah subseksyen 77(1) dan 77A(1) Akta Cukai

Pendapatan 1967.

Oleh itu, Garis Panduan Bil 1 Tahun 2014 adalah mengatasi Minit Dialog pada 2 April

2012.

3. Timeframe to respond

Withholding tax refund under Section 107A(1)(a) and Section 107A(1)(b) of the

ITA

The taxpayer submitted requisite documents to the LHDNM’s Non-resident branch

(LHDNM-NR) for application for refund of withholding tax (WT) under the Section 107A

of the ITA in the year 2013. The WT desk audit unit had finalised the audit of all the

income tax returns – corporate income tax (CIT) and foreign employees’ personal

income tax (PIT) on 23 April 2014 and 10 July 2014 respectively. A receipt requested

by the LHDNM had also been submitted on 9 October 2014.

However, the officer in-charge from the LHDNM-NR has not processed the refund after

more than a year. Reasons given are holidays / attending courses / handling other

cases etc.

There is a loss of time value of money to the taxpayer and the compensation for late

refund for overpayment of tax does not cover the WT cases / cases under audit review.


of 99


The LHDNM should set a target date for refund of overpayment of WT under Section

107A of the ITA. A suggestion is 6 months from the date of finalization of audit /

approval given by the WT desk audit unit.

Jawapan LHDNM

Piagam Pelanggan LHDNM telah menetapkan bayaran balik perlu dibuat dalam

tempoh 30 hari bekerja dari tarikh BNCP diterima melalui kaedah e filing dan 90 hari

bekerja melalui kaedah borang kertas (manual) kecuali bagi BNCP yang terdapat

kesilapan tuntutan pelepasan atau kesalahan pengiraan.

Bayaran balik akan diproses dahulu tanpa semakan audit walaupun kes layak

dikenakan audit, termasuk taksiran formal di bawah subseksyen 90(3) ACP 1967

yang dibangkitkan bagi BNCP yang diterima selepas tarikh ditetapkan.

Untuk menyokong isu yang dibangkitkan, pihak CTIM hendaklah mengemukakan

maklumat terperinci/lengkap kes yang mengandungi nama pembayar cukai, no

rujukan fail cukai dan tahun taksiran kes yang dirujuk untuk penelitian lanjut

oleh LHDNM.

4 MTD payment

MTD payments via e-banking services

Currently we are using CITI online platform to do payment for MTD. We have not been

able to get official receipts even though requests have been made through calls or

official letters.


We propose that the official receipts be sent out to taxpayers/tax agents within 5

working days from the date payment received by the LHDNM for all online payments.

Jawapan LHDNM

LHDNM tidak mengeluarkan resit rasmi bagi bayaran PCB yang dibuat melalui agen

bank temasuklah Citibank. Slip bayaran atau slip pengesahan bayaran dari agen bank

disifatkan sebagai resit rasmi dan bukti bayaran telah dibuat. Pembayar cukai perlu


of 99

menyimpan dan mengemukakan slip berkenaan untuk kegunaan jika ada pertanyaan

kepada LHDNM.

MTD payments via telegraphic transfer in foreign currency

For MTD payments remitted directly by taxpayers from offshore in foreign currency,

we have not been able to obtain the confirmation from the LHDNM on the MTD

amount received by the LHDNM in MYR amount despite requests made via calls and

emails on behalf of taxpayers.


In view of the numerous online payments and to expedite the issuance of receipts, we

hope that the LHDNM could set up a special team to monitor and handle all the

payments received by the LHDNM via telegraphic transfer, e-banking, credit cards,

etc.

Jawapan LHDNM

Bagi bayaran yang diremit melalui pindahan telegrafik dalam matawang asing, amaun

bayaran yang diterima dalam Ringgit Malaysia hanya akan diketahui selepas pihak

bank membuat kiraan penukaran matawang asing tersebut.

Bagi semua bayaran cukai melalui Telegraphic Transfer, pembayar cukai mesti

mengemukakan maklumat lengkap butiran bayaran tersebut melalui e emel atau faks

kepada LHDNM pada hari transaksi bayaran dibuat.

Maklumat terperinci bayaran boleh diperolehi dari laman web LHDNM.