Frank Gan, COO of ExHasil Tax Consultant Sdn Bhd shared about the risk of businesses facing tax audit and tax investigation. Why are you being investigated? How to avoid it? And what are the penalties if you were found to be evading tax in Malaysia?

When declaring your income, any omissions or understatement of income can never be an act of good faith. This means that whatever you submit on the income tax form will be heavily scrutinized. The authorities will want to get any and all information from you to make sure that you, the tax payer, have declared all your sources of income.

When you declare your income, everything will be considered final. You will not be given a chance to revise it nor will you be given a chance to explain yourself. Saying that you have done it in good faith and that you intend to pay the proper taxes is not acceptable.

The DGIR, through Income Tax Act of 1967, has the power to put any tax payer under “Investigation” and a “Tax Audit.” This exposes the tax payer to greater risks.

With the current self assessment, tax payers are exposed to greater risks of:
1. Additional Assessments – This means that they will look further in to your expenditure and income.
2. Heavy Penalties – Penalties start at 45% but can go up to 300% depending on the case imposed on you.
3. Special Penalties – These penalties start at 21%.
4. Fines – The amount, again, depends on the case imposed on the tax payer.
5. Jail Term – Under-declaration of income or over-declaration of expenses is considered a criminal offense.

To avoid these risks, you should make to sure that you are compliant and that all information you have provided is correct before filing your taxes.

Watch the webinar: How To Avoid Tax Problems for Your Business


You’ll what will happen to you or your business after filling your tax are you really complying? how can you avoid tax audit and investigation?


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