COVID19 – Phase 3 of the Movement Control Order – Tax Developments

Following the extension by the government of the Movement Control Order (“MCO”) until 28 April, 2020, the Inland Revenue Board (“IRB”) has updated the list of Frequently Asked Questions (“FAQ”). 

SALIENT POINTS

We have listed the salient points from the latest FAQ. 

All IRB premises remain closed until 28 April, 2020 

All IRB premises (except stamp duty counters at Branch Stamping Office and Hasil Care Line) nationwide will remain closed until 28 April, 2020.

Extension of Time until 31 May, 2020 for Submission and Payment of Tax Estimates etc.

An extension of time until 31 May, 2020 is now given for each of the following:

Submission of all types of tax estimates that are due during the period of 18 March, 2020 to 28 April, 2020.

Payment of tax estimates that are due on 15 April, 2020 and 15 May, 2020.

Submission of revised tax estimates in the third month instalment that falls in April, 2020.

Submission of documents for audit or investigation purposes, where the due date for submission is during the period of 18 March, 2020 to 15 May, 2020.

Provision of feedback to IRB letters, where the due date is during the period of 18 March, 2020 to 15 May, 2020.

Filing of Form Q (Notice of Appeal). However, as previously announced, taxpayers are required to file the Form N (Application for Extension of Period for Making an Appeal to The Special Commissioners of Income Tax) and state that the delay is due to the implementation of MCO.

Submission of Form LE3 (Irrevocable Election Form to be Taxed under the Income Tax Act, 1967) for Year of Assessment 2020, where the due date for submission is during the period of 18 March, 2020 to 28 April, 2020.

Submission of return form and payment by Labuan entity that are due during the period of 18 March, 2020 to 28 April, 2020.

Submission of notification of change in accounting period (Form CP204B), where the due date for submission is during the period of 18 March, 2020 to 28 April, 2020.

Submission of Monthly Tax Deductions (MTD) data and MTD/CP38 payment for March, 2020 and April, 2020 remuneration.

Compound payment for MTD that should be paid during the period of 18 March, 2020 to 28 April, 2020.

Furnishing of real property gains tax returns and payment of real property gains tax that are due during the period of 18 March, 2020 to 31 May, 2020.

Payment of stamp duty that is due during the period of 18 March, 2020 to 31 May, 2020.

Extension of Time until 30 June, 2020 for Submission of Audited Accounts by Approved Institutions or Organisations

Extension of time until 30 June, 2020 will be given for submission of audited accounts by institutions or organisations approved under section 44(6) of the Income Tax Act, 1967.

Extension of Time for Filing of Tax Returns by Companies etc. 

Extension of time of 2 months from the due date of submission is allowed for companies, co-operative societies, limited liability partnerships, trust bodies, unit trusts/property trusts, real estate investment trusts/property trust funds, business trusts and chargeable persons under sections 30 and 30A of the Petroleum (Income Tax) Act, 1967 with accounting period ending 31 July, 2019 to 31 December, 2019.

Extension of Time for Filing Country-by-Country Report and Notification

As previously announced, country-by-country reports due on 31 March, 2020 can be submitted on or before 15 May, 2020. 

The IRB has now announced that country-by-country reports due on 30 April, 2020 can now be submitted on or before 31 May, 2020. Further, any notification required to be submitted on 31 March, 2020 or 30 April, 2020 can now be submitted on or before 31 May, 2020.

Submission of Employer Notifications

Forms CP21 (Notification by Employer of Employee’s Departure from Malaysia), CP22 (Notification of New Employee), CP22A (Notification of Cessation of Employment (Private Sector)) or CP22B (Notification of Cessation of Employment (Government Agency)) can now be submitted starting from 29 April, 2020, instead of 15 April, 2020, as previously announced.

Further Delay to Processing of Applications for Tax Clearance Letter

An application for a tax clearance letter can still be done via e-SPC at any time or at the IRB office starting from 29 April, 2020. 

However, processing of applications will only start from 29 April, 2020.

Extension of Time for Submission of Application relating to Research Project 

Extension of time until 30 June, 2020 will be given for the submission of Borang 1 (Application Form of an Approved Research and Development Project under section 34A of the Income Tax Act, 1967), where the due date for submission ends on 31 March, 2020 or 30 April, 2020. 

Clarification on Source of Data that will be used to determine whether Small and Medium Enterprises Qualify for Deferment of Payment of Tax Estimates

The source of data that will be used by the IRB in order to determine whether Small and Medium Enterprises qualify for the deferment of payment of tax estimates is the tax return for the year of assessment 2018 that is received by the IRB.

The IRB also stated that taxpayers can appeal by way of letter/e-mail to the Records Management and Taxation Information Division. A notification e-mail will be issued if the appeal is approved.

Further, the IRB will notify taxpayers who are entitled to the deferment by e-mail registered with the IRB. Taxpayers who are entitled to the deferment but who have yet to receive the said e-mail will not have to make payment for the instalment that is due on 15 April, 2020.

Taxpayers can reject the automatic deferment and continue payment of tax estimates based on the original payment schedule.

No Tax Increase 

Tax increase will not be imposed if an income tax payment, which should be made during the period of 18 March, 2020 to 28 April, 2020, is made on or before 31 May, 2020.

Further Extension of Time for Payment of Withholding Tax

Payment of withholding tax that is due during the period of 18 March, 2020 to 28 April, 2020 can now be made from 29 April, 2020 up to 31 May, 2020.

Late payment penalty will not be imposed.

Tax Refunds Now Processed as Usual

As announced previously, tax refunds will now be processed as usual. 

However, in an ongoing audit case, if taxpayers are requested to submit supporting documents for the purpose of tax refunds, those documents must be submitted even during the period of 18 March, 2020 to 28 April, 2020.

Please do not hesitate to contact any of the following persons from our Tax Practice Group if you require any clarification:

Vijey M. Krishnan (Partner) 
(T): 603 – 2632 9868
(E): [email protected]

William Wong (Partner)
(T): 603 – 2632 9905
(E): [email protected]

Nicholas Mark Pereira (Senior Associate)
(T): 603 – 2632 9911     
(E): [email protected]

Krystal Chiam (Associate)
(T): 603 – 2632 9999 (ext. 1201)
(E):  [email protected]

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