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TAX ADMINISTRATION 3

TAX ADMINISTRATION 3. APPEALS, OFFENCES AND PENALTIES. INTRODUCTION : Right to appeal. Sec 99(1). Dissatisfied taxpayer can write an appeal letter stating his reasons of objection; submit it together with his return form OR APPEAL within 30 days of the dates of notice of assessment

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TAX ADMINISTRATION 3

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  1. TAX ADMINISTRATION 3 APPEALS, OFFENCES AND PENALTIES

  2. INTRODUCTION :Right to appeal. Sec 99(1) • Dissatisfied taxpayer can write an appeal letter stating his reasons of objection; • submit it together with his return form OR • APPEAL within 30 days of the dates of notice of assessment • Procedure to appeal: • Discussed with IRB; no agreement has been reached… • Appeal to Sp. Commissioner;.. Not satisfied… • High court and Court of Appeal

  3. Assessments that are allowed for an appeal; • Original assessment which is not yet valid and conclusive • 30 days from the date of notice of assessment • Advance assessment • Within first 3 months of the assessment year following the YA • Additional assessment • Amount refunded to tax payer • Appeal to Sp. Comm. 30 days from the notified date of the amount refunded

  4. Extension of time for appeal. Sec 100 • If an appeal is not made within 30 days , tax payer may apply for extension. • Reasonable cause: illness, not in Malaysia • If DG reject the application, forward to Sp. Comm. with his reason for the objection and inform taxpayer (appellant) • Sp. Comm. Will decided and their decision is final.

  5. OFFENCES AND PENALTIES • Types of offences; • Failure to furnish a return. [s. 77(1), 77A(1)] • Failure to give notice of chargeability [ S. 77(3)] • Incorrect return • Wilful evasion • Understatement of tax • Leaving M’sia without payment of tax • Others (table on page 597) • Example 30.3 [page 600]

  6. PENALTY TO EMPLOYER • Fails to remit the STD amount • Fails to remit the deduction by 10th day of the following month • Not deducting and remitting the following amount • Fail to inform DG within 10 days after remuneration ceased to be paid • If convicted: • Fine not exceeding RM1,000; or • Imprisonment not exceeding 6 months or both

  7. Penalty to taxpayer • Fail to pay the tax payable – within 30 days after receiving notice of assessment • 10% penalty on the amount to be paid will be added to tax payable • Further penalty; fail to made a payment within 60 days after the imposition of the first penalty • 5% penalty will be imposed and added to the total amount due

  8. OFFENCES:Failure to submit return. • In accordance with Section 112, anyone who fails to submit a return form within the time period or fails to give notice that his income is subject to tax will be liable to: • a fine of not less than RM200 and not more than RM2,000 ,or • imprisonment not exceeding 6 months or both. • If you are abroad for certain period of time, you must declare and fill up the tax return.

  9. OFFENCES:False, Understating or Incorrect Returns • With reference to Section 113, anyone who makes an false declaration or preparing incorrect return by omitting or understating any income which affects the chargeability to tax shall be liable to: • a penalty of not less than RM1,000 and not more than RM10,000. • In addition, a penalty of double the amount of tax undercharged due to incorrect return may be imposed too.

  10. OFFENCES:Willful Evasion (Section 114) • Section 114 stating that whoever: • willfully omits from a return, or • making false statements or • entries in returns, or • gives a false answer to a question asked, or • prepares and maintains false books of account or • makes use of any fraud, • shall be liable to: • a fine of not less than RM1,000 and not more than RM20,000 or • imprisonment of not exceeding 3 years or both and a special penalty of treble the amount of tax undercharged.

  11. Barred from Leaving Malaysia • With reference to Section 115, taxpayers who has been issued a certificate in respect of Section 104 recovery of tax and is leaving or attempts to leave Malaysia without paying the tax shall be liable to: • a fine of not less than RM200 and not more than RM2,000 or • imprisonment not exceeding 6 months or both.

  12. Other offences (Section 120) • According to section 120, a person who fails to fulfill the Director General's requests, or fails to keep proper record or fails to submit information regarding their employees shall be liable to: • a fine of not less than RM200 and not more than RM2,000 or • imprisonment not exceeding 6 months or both.

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