The Inland Revenue Board (IRB) announced administrative concessions to taxpayers in its updated circular issued on June 3, 2021 in light of the recently announced movement control order or better known by the acronym MCO 3.0.
S Saravana Kumar and Nurul Imani Hamzah of the law firm Rosli Dahlan Saravana Partnership address 10 key tax issues arising from the recent IRB circular.
1. Are IRB offices open during MCO 3.0?
Unlike the old MCO where all IRB offices are closed during the MCO period, several IRB offices will operate during MCO 3.0 in order to facilitate the receipt of tax payments, namely:
• The counter at the IRB payment center (Kuala Lumpur, Kota Kinabalu and Kuching) open from 8 am to 12 noon on weekdays. Services provided are cash and check payments for withholding tax, real estate gains tax rebate, compounding tax, and other tax related payments. Payment of income tax and other taxes can also be made by debit and credit card.
• Stamp duty counters in IRB agencies will operate from 8 am to 12 noon with prior appointment.
The IRB Hasil Care Line and Hasil Live Chat will continue to operate on working days from 9 a.m. to 4 p.m. and 9 a.m. to 5 p.m. respectively. The MyTax (ezHasil) will operate for 24 hours. Further details on the services provided by the IRB throughout the MCO 3.0 period can be found at http://phl.hasil.gov.my/pdf/pdfam/faq_pkp3_2.pdf.
2. What is the extended filing period for tax returns?
Filing the income tax return form for corporations, limited liability companies, mutual funds, real estate trusts, cooperative societies, trust organizations, real estate investment trusts, real estate trust funds and commercial trusts for the years 2020 and 2021 remains the same as indicated in the guide to the IRB income tax form, available at http://phl.hasil.gov.my/pdf/pdfam/ProgramMemfailBN_2021_Pin.1_2.pdf.
However, a one-month extension is granted until July 31, 2021 for taxpayers carrying out an activity involving private individuals, resident natural persons (knowledge workers / experts), non-resident natural persons, non-resident natural persons. residents (knowledge workers / experts), partnerships, associations, the estate of the deceased and joint Hindu families. The regular filing date would have been June 30, 2021.
In addition, the filing dates for amendments CP500 and CP204 which are due on June 30, 2021 are extended until July 31, 2021.
Unlike the previous MCO, the filing dates for other tax forms will only be extended depending on the merits of the case. For example, submitting a monetary and non-monetary incentive payment statement to an agent, reseller or distributor (form CP58), the request for time extension should be submitted by letter or email to the relevant IRB branch which deals with the case. This is also the case for the country-by-country reporting, for which a request must be submitted in writing to the IRB’s Department of International Taxation.
When the submission of the Tax Estimate Submission (CP204) and the Accounting Period Change Notification (CP204B) is due on June 30, 2021, the due date is extended until July 1, 2021. The CP204B must be submitted by mail or courier.
3. Is the deadline for paying taxes also extended?
No extension of time will be granted for tax estimate payments (Form CP204) as well as any other tax installments relating to the audit and investigation that are due in June 2021. In addition, no extension is granted to submit monthly tax deduction data and make tax deduction payments for taxes withheld from employee compensation that are due on June 15, 2021. Taxpayers are required to make the necessary payments via e-PCB, e-DataPCB and e-CP39 online services.
In addition, no deferral is given for the compound payment which is expected to be paid in June 2021. However, the IRB has said it is ready to consider installment rescheduling on a case-by-case basis provided taxpayers support Requirement. for posting with relevant documents such as financial statements of cash flows.
4. Concerning withholding taxes, are there any specific provisions as above?
The IRB has not yet announced whether a similar extension will be granted to withholding tax payments due during the MCO 3.0 period. Accordingly, taxpayers are advised to file their withholding forms and remit the necessary payment within the time limits prescribed by the Income Tax Act 1967.
5. What would be the status of tax audits and investigations during the MCO?
Unlike the previous AGC, the IRB did not grant an automatic extension of time to taxpayers to submit documents and respond to IRB questions regarding tax audits and investigations.
Instead, taxpayers will have to request an extension of time by letter or email to the IRB branch that manages audits and investigations. The request for an extension of time will be considered by the IRB on the merits of the case.
In light of the lockdown and advice from the Department of Health to keep the public at home, one would have thought the IRB should have granted an automatic extension of the deadline.
6. What are the tax breaks provided for in the Pemerkasa Plus recovery plan?
Business owners who offer at least 30% rental discount to SME or non-SME tenants until December 31, 2021 will benefit from a special deduction from their income tax. In addition, the sales tax exemption for Completely Disassembled (CKD) and Imported Completely Built (CBU) products is extended until December 31, 2021.
In addition, the exemptions from the tourist tax and the service tax on accommodation provided by hotel operators announced under the Pemerkasa program on March 17, 2021, will continue until December 31, 2021.
It was also mentioned that the IRB could consider appeals for the deferral of penalties to the year 2022 as well as the rescheduling of installments for affected taxpayers and businesses.
7. What about filing appeals with the Special Income Tax Commissioners (SCIT)?
There is no positive assurance from the IRB that the submission of SCIT notices of appeal (i.e. Form Q) due between during the MCO 3.0 period is automatically extended. Taxpayers are required to submit the request for an extension of time (i.e. Form N) to their IRB branch and indicate that the delay in filing the Form Q was due to the implementation of MCO 3.0. The appeal will be considered by the IRB based on the merits of the case.
In view of the uncertainty about whether Form N will be accepted automatically, taxpayers are advised to file Form Q on time by email or fax.
8. What happens to tax appeals before the courts?
All tax matters including tax appeals settled before the SCIT Special Income Tax Commissioners between June 1, 2021 and June 14, 2021 are adjourned. The SCIT will set new dates and notify the parties concerned as soon as possible. Likewise, all customs appeals to the Customs Appeal Tribunal are also adjourned.
Most tax appeals to superior courts, including judicial review proceedings, are also adjourned during MCO 3.0. In very urgent cases, they can be heard through an online hearing. Case management always takes place online through an electronic review where the parties, including the court official, do not need to be physically present in court.
9. What is the situation with regard to the stamp of documents and the payment of stamp duty?
Stamping of documents is carried out through the Stamp Assessment and Payment Systems (STAMPS), a system that enables the online application and payment of stamp duties. STAMPS can be used by law firms, corporations, partnerships and businesses registered with the Companies Commission of Malaysia.
For taxpayers who have used STAMPS, they can print the stamp certificate after successful payment and attach the certificate to the physical document. Companies can verify the seal certificate by downloading the Semak an Ketulenan Sijil smartphone app or online at https://stamps.hasil.gov.my/stamps.
Taxpayers who cannot register as STAMPS users will have to stamp their documents manually at IRB stamp offices across the country from 8:00 a.m. to 12:00 p.m. with a prior appointment.
However, in cases where the document cannot be stamped in time, the appeal of the late stamping penalty will be based on the merits of the case.
10. Are similar extensions granted in the real estate gains tax (RPGT)?
The filing of RPGT returns due in June 2021 is extended until July 31, 2021. However, the IRB announcement is silent on matters relating to RPGT payments, including those under a notice of assessment or payment. ‘an RPGT retention sum by the purchaser. In this regard, it must be assumed that the usual delay for such payments will continue although the IRB has given assurances that any penalties imposed (which, we assume, include the late filing payment) will be considered on the merits of the case. ‘case.
This is an opinion piece from a law firm.