Following the further extension of the Movement of Control Order (“MCO”), the Inland Revenue Board of Malaysia (“IRB”) issued its
revised FAQ recently. We set out here updates on our earlier e-alert issued on
3 April 2020 and
6 April 2020.
Tax Estimation Payments (“CP 204”)
In the recently revised FAQ, the IRB allows Corporate Taxpayers
[1] to defer the CP 204 payment for April 2020 (which is due on 15 April 2020) and May 2020 (which is due on 15 May 2020) to 31 May 2020. The June CP 204 remains payable by 15 June 2020.
Commentary
As highlighted in our
earlier e-alert, Corporate Taxpayers may not have sufficient liquidity in the near term to meet back to back CP204 instalments.
Whilst the revised FAQ maintains the position that no late payment penalty under Section 107C(9) of the Income Tax Act 1967 (“ITA”) will be imposed on the deferred CP204, there continues to be no mention of a waiver of the penalty under Section 107C(10) of the ITA in the revised FAQ.
Clarification on the criteria of a SME
The IRB in its revised FAQ has further clarified that the criteria by which to be considered an SME are a company with (i) a paid-up capital of not more than RM2.5 million, and (ii) a gross business income of not more than RM50 million only.
Stamp Duty
In this revised FAQ, the IRB expressly assures that no late payment penalty will be imposed for all instruments which are due to be stamped between 18 March 2020 to 30 May 2020 as an extension of time has been given until 31 May 2020.
Similarly, no late payment penalty will be imposed if payment of a notice of assessment on stamp duty which falls within the MCO period has not been made as an extension of time has been given until 31 May 2020.
Commentary
However this revised FAQ is in contradiction with the
IRB’s letter dated 11 April 2020 issued to the Malaysian Bar Council.
In paragraph 4 of the IRB’s letter, the deadline for stamping instruments and payment of notice of assessment without penalty is stated to be
30 April 2020.
Further clarification from the IRB on the effective deadline is therefore immediately necessary.
Extensions of Tax Deadlines
As set out in the revised FAQ, the IRB granted extensions of time until 31 May 2020 for the following:
Taxpayers should monitor closely the submission deadlines of their statutory forms or necessary documents and/or payments in order to avoid any late submission or payment post-MCO.