Menu
We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.
The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ...
Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.
Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.
With the conclusion of the Special Voluntary Disclosure Programme 2.0 (“SVDP 2.0”) on 31.5.2024[1], the Inland Revenue Board (“IRB”) has intensified its focus on ensuring tax compliance across Malaysia. This marks a significant shift towards stricter enforcement and heightened scrutiny in various key areas.
Key Focus Areas
In particular, the IRB has identified the following areas of focus in enforcement activities:
Latest Developments in mid-2024
Since June 2023, the IRB has indicated its intention to intensify enforcement efforts post-SVDP 2.0. The following recent developments indicate their full commitment to fulfilling that promise.
1 Strategic Compliance Branch (“Cawangan Pematuhan Strategik”)
Established as one of its Special Branches (Cawangan Khas), this unit has been actively conducting raids, investigations, and desk audits across various industries and sectors in recent weeks.
2 Tax Investigation Framework (“TIF”) 2024[2]
The IRB has issued its updated TIF effective 31.5.2024. Amongst others, taxpayers facing investigation can expect:
a. More comprehensive requests for documents[3].
b. Unannounced inspections, including surprise visits on business premises and even the residences of taxpayers, tax agents, and other relevant parties[4].
c. Stricter penalties and potential prosecution for failures to submit tax returns[5].
For a detailed overview of common tax disputes in the country and procedures for resolving them, see our publication titled: Lexology In-Depth: Tax Disputes and Litigation (12th Edition) 2024[6].
3 Ops Token[7]
The IRB has launched a specialised programme in conjunction with the Royal Malaysian Police Department (“PDRM”) to target perceived revenue leakages arising from cryptocurrency trading (“Crypto”), underlining their proactive approach towards emerging sectors[8].
See our Special Alert: Crypto in the IRB’s Crosshairs: Debunking 3 Myths for Traders and Dabblers[9].
Implementing Strategic Compliance Measures
As the IRB intensifies its enforcement actions, taxpayers must adopt strategic compliance measures. Amongst others, it is crucial for businesses and individuals alike to:
Navigating these evolving regulatory landscapes demands proactive compliance measures and professional guidance. For assistance regarding ongoing tax audits or investigations by the IRB, please contact the author, Partner Chris Toh Pei Roo (tpr@lh-ag.com) or his fellow tax Partners Jason Tan Jia Xin (tjx@lh-ag.com) and Ivy Ling Yieng Ping (il@lh-ag.com).
Authors: Chris Toh Pei Roo & Nathaniel Jagan
REFERENCES
[1] https://www.hasil.gov.my/en/special-voluntary-disclosure-programme-svdp-20/
[2] Available in the Malay language only at https://www.hasil.gov.my/media/puwbltue/rangka-kerja-siasatan-cukai-2024.pdf
[3] Paragraph 7.1, TIF 2024
[4] Paragraph 7.1, TIF 2024
[5] Paragraph 10.1, TIF 2024
[6] https://lh-ag.com/lexology-in-depth-tax-disputes-and-litigation-12th-edition-2024/
[7] Available in the Malay language only at https://www.hasil.gov.my/media/puwbltue/rangka-kerja-siasatan-cukai-2024.pdf
[8] https://www.hasil.gov.my/media/f0vfbzv3/20240615-kenyataan-media-hasil-perluasan-asas-cukai-terus-diperkasa-menerusi-operasi-pematuhan-khas-ops-token.pdf
[9] https://lh-ag.com/tax-customs-trade-special-alert-crypto-in-the-irbs-crosshairs-debunking-3-myths-for-traders-and-dabblers/
Learn more about our partners who specialize in this area