special voluntary disclosure programme...

Special Voluntary Disclosure Programme (SVDP)Chia Swee How

© 2019 Deloitte Tax Services Sdn Bhd 2

Rebut segera tawaran program khas pengakuan sukarela

Seremban, 17 Disember 2018 – Lembaga Hasil Dalam Negeri Malaysia menyeru semua pembayar cukai yang mempunyai isu pematuhan cukaiagar merebut tawaran Program Khas Pengakuan Sukarela (PKPS) yang diumumkan oleh kerajaan pada pembentangan Belanjawan 2019 yang lalu.

Dalam tempoh sebulan PKPS ini dilancarkan, kira-kira 35,000 pembayar cukai baharu telah mendaftar fail cukai mereka danhampir 2,000 pembayar cukai pelbagai kategori telah membuatpengisytiharan cukai dengan amaun cukai tambahan dan penaltiyang ditaksir hampir RM60 juta. Bagi duti setem pula, kira-kira3,000 suratcara telah disetemkan dengan amaun duti dan penaltihampir RM2 juta. Perkara demikian dimaklumkan oleh YBhg. Dato’ Sri Sabin Samitah, Ketua Pegawai Eksekutif, Lembaga Hasil Dalam NegeriMalaysia


148 pembayar cukai di negeri sabah telah membuatpengakuan sukarela

Kota Kinabalu, 21 Disember 2018 - Sehingga 20 Disember 2018, sebanyak 148 pembayar cukai daripada pelbagai kategori di NegeriSabah telah membuat pengakuan sukarela di bawah Program KhasPengakuan Sukarela (PKPS) yang ditawarkan oleh Lembaga Hasil DalamNegeri Malaysia.

Bilangan ini melibatkan cukai tambahan dan penalti yang ditaksirsekitar RM8.1 juta.

Special Voluntary Disclosure Programme


SVDP with lower penalties

Offences Penalty Rate

03.11.2018 –31.03.2019

01.04.2019 –30.06.2019

Failure to submit return on time; or

10% 15%Failure to report the correct income/gains on disposal of assets

Failure to pay stamp duty on instrument 10%or min RM50

15%or min RM100

Due Date for Payment 01.04.2019 01.07.2019

1IRBM will accept in good faith all voluntary disclosures made during the

Special Programme period.

Further review will not be made on the reported information.

2Taxpayer has to provide a letter of full disclosure.

3


Extract from SVDP by IRB dated 3 Nov 2018 (updated 30 Nov 2018)

5.11 IRBM will accept in good faith all voluntary disclosures made during the Special Programme period. Further review will not be made on the reported information.

5.12 The conditions for voluntary disclosure and the penalty imposed under this Special Programme are final.

Updated version:

Operational Guidelines No. 1/ 2018 dated 30 November 2018

http://www.hasil.gov.my/pdf/pdfam/GO_012018_02.pdf


Extract from SVDP by IRB (updated 30 Nov 2018)

5.6 This Special Program is not applicable to cases where criminal investigation has commenced or prosecution proceeding as a result of criminal investigation has been instituted in courts pursuant to the provisions of the ITA 1967, PITA 1967, RPGTA 1976, SA 1949 or Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.


Question 1

LHDNM has in place a viable big data analysis system and LHDNM has access to third party information that will further make it easy for us to match data against an individual’s profile

…taxpayers are willing to participate in the SVDP. However, there are a few whom are very concerned that by doing so….


Question 2

LHDNM will accept all VD made under the SVDP in “good faith” or “suci hati”.

This will give a good platform to start clean and fresh from year of assessment 2018 onwards.


Jangan abaikan surat atau e-mel daripada LHDNM berkenaan program khas pengakuan sukarela

Kenyataan Media LHDNM, 5 Disember 2018

…….. Dalam dunia yang mengaplikasikan teknologi tinggi pada masa iniserta kerjasama pertukaran maklumat dengan pelbagai agensitermasuklah dengan pihak berkuasa cukai antarabangsa, LHDNM memiliki kemampuan untuk mengesan kegagalan pembayar cukaimembuat pengisytiharan pendapatan yang betul.


Taxpayers (whether organisations, individuals or employers) are now offered a golden opportunity to recalibrate their tax affairs

Timely to evaluate and assess the strengths and risk

areas on your tax position:

1. Whether a tax stance is defendable from a technical perspective

2. Whether a receipt is indeed capital in nature

3. Whether an income is indeed foreign sourced

4. Whether sufficient documentation is available to support the

declared Income and/or capex as well as revenue expenditure

5. Whether you are in a position to explain your finances from all

angles


Sample closure letter

Voluntary Disclosure

Understanding IRB’s approach – for high networth individuals


Unexplained extraordinary wealth

Extract from the 2019 Budget Speech – 2 Nov 2018

…… IRB will scrutinise and investigate unexplained extraordinary wealth displayed by possession of luxury goods, jewellery, handbags or property. The IRB will use all necessary measures permitted by the law to recover such monies, whether in the form of additional taxes, penalties or fines….

Information could come from JPJ, land office, developers, stamp office, newspaper/online news.

Information from Automatic Exchange of Information (AEOI) under Common Reporting Standard (CRS).

Employment Tax


Errors by employer and its impact on employees

• Incorrect Form EA

Incorrect Form eBe

• Incorrect tax paid

IRB audit

• Penalty on individual taxpayer

Individual taxpayer takes action against

employer


How is SVDP relevant to an employer?

Are all income, non cash benefits, share incentives and reimbursements tagged clearly in

payroll for MTD and Form E/EA?

Is a director’s (resident and non-resident) remuneration correctly disclosed in audit

reports and reported in Form EA?

Do a payroll health check SVDP on unintentional errors in Form E/EA?

Questions that an employer should ask:

SVDP

Common Reporting Standard


How does it work?

Automatic exchange of financial account information

Reporting Financial

Institutions

Domestic tax authorities

Foreign tax authorities

in countries of Account

Holders and Controlling

PersonsReporting

Exchange under CRS

Due

Diligence

Entity Account

Holders

Controlling

Person(s)

Individual Account

Holders

Reporting

under FATCA

• FIs to review and identify reportable accounts (based on tax residency of account holders/controlling parties)

• FIs to report on reportable accounts to the domestic tax authority• Domestic tax authority will share information with foreign tax authorities

Based on Reportable Jurisdiction list


Status of commitment

Automatic exchange of financial account information

JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2017 (49) under multilateral arrangement

Anguilla, Argentina, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France,Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania,Luxembourg, Malta, Mexico, Montserrat, Netherlands, Norway, Poland, Portugal,Romania, San Marino, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Turks and Caicos Islands, United Kingdom

JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2018 (49) under multilateral arrangement

Andorra, Antigua and Barbuda, Aruba, Australia, Austria, Azerbaijan, The Bahamas, Bahrain, Barbados, Belize, Brazil, Canada, Chile, China, Cook Islands, Costa Rica, Curaçao, Greenland, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Macao (China), Marshall Islands, Malaysia^, Mauritius, Monaco, Nauru, New Zealand, Niue, Pakistan, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint Maarten,Switzerland, Turkey, United Arab Emirates, Uruguay, Vanuatu

COMMITTEDJURISDICTIONS FIRST EXCHANGES BY 2018 (3)

Brunei Darussalam, Dominica, Trinidad andTobago

^ Malaysia has signed the MCAA on 27 January 2016.

There are 7 jurisdictions undertaking first exchange by 2019/2020.

There are 42 Developing Countries having not yet set the date for first exchange.

* Status as at November 2018.


Investment Entity

Depository Institutions Custodial Institutions

Specified Insurance Companies

Example:Place deposit, e.g. savings, fixed deposit accounts

Commercial banks

Example:Hold securities through nominees or custodian

Investment banks

Example:Invest in portfolio or unit trust funds

Managed funds

Example:Invest in cash value insurance

Life insurance companies

© 2018 Deloitte Tax Services Sdn Bhd

FIs and types of reportable accounts

Who reports?


What information is being reported?

Reportable accounts

Information to be Reported

Identification Information Account Information

Individual/ Controlling Person• Name• Address*• Jurisdiction of residence• TIN*• Date of birth

Entity• Name• Address• Jurisdiction of residence• Tax identification number

1. Account number

2. The name and identifying number

of the Reporting FI

3. Account balance or value as at

end of calendar year

4. Gross amount paid or credited to

the account (or with respect to

the account) during the calendar

year – e.g. interest, dividend,

gain on disposal of financial

assets/investments


Funds/Monies in Malaysia

Wire transfer

AUD1m to Australia

Impact of CRSA simple illustration

• Income• Bank loans• Advances from company• Unreported income – self or

company

2013: Placement

in fixed deposits

2014: Buy real

property

2016: Trading in

shares

2018: AUD5m

balance in bank

account

Malaysia

Australia

• Where did the funds come from?• Where did the increase in wealth comes from?• Capital or income?• Malaysian source or foreign source?• Reported to tax in Malaysia?


26

What’s next?

Consider making use of the SVDP

Tax health check to identify any tax risks (e.g. review

of wealth structures,

sufficiency of documentations)

Assess the impact of CRS (e.g.

tax residency)

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