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Income Tax (Amendment) Act 2017 and Labuan Business Activity Tax (Amendment) (No. 2) Act 2017

The Income Tax (Amendment) Act 2017 and Labuan Business Activity Tax (Amendment) (No. 2) Act 2017 (“Amendment Acts”) have been gazetted on 29 December 2017 with no significant changes from the Income Tax (Amendment) Bill 2017 and Labuan Business Activity Tax (Amendment) (No. 2) Bill 2017.  The Amendment Acts come into operation on 30 December 2017. 

The Amendment Acts are available on the e-Federal Gazette Portal http://www.federalgazette.agc.gov.my (Home > Amending Act > ACT A1556 / ACT A1555).

Previously, the penalty provisions in the Income Tax Act, 1967

(“ITA”) and Labuan Business Activity Tax Act 1990 (“LBATA”) specifically covered non-compliance with Country-by-Country Reporting (“CbCR”) and Common Reporting Standards (“CRS”) that are implemented under mutual administrative assistance arrangement.

Further to the gazette of the above Amendment Acts, the penalties are now extended to cover CbCR and CRS implemented or facilitated under double taxation agreement or tax information exchange agreement.

The relevant penalties are as follows:

Offences

Penalty under ITA upon Conviction

a)   Failure to furnish a Country-by-Country Report

 

·      Fine between RM20,000 to RM100,000; or

·      Imprisonment for a term not exceeding 6 months; or

·      Both the above fine and imprisonment term.

b)  Incorrect returns, information returns or reports

c)   Failure to comply with rules made under Section 154(1)(c) of the ITA

Offence

Penalty under LBATA that could be prescribed by the Minister of Finance under the Regulations

a)   Failure to comply with any provisions of the Regulations* that may be made by the Minister of Finance

 

·  Fine not exceeding RM1million; or

·  Imprisonment for a term not exceeding 2 years; or

·  Both the above fine and imprisonment term.

   

Note*: E.g. Labuan Business Activity Tax (Country-by-Country Reporting) Regulations 2017 gazetted on 26 December 2017. 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Contact KPMG

Should you have any questions or require further clarification, please do not hesitate to contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation at the following telephone numbers for respective offices:

Petaling Jaya Office

Tai Lai Kok
Executive Director –
Head of Tax and Head of Corporate Tax
ltai1@kpmg.com.my
+ 603 7721 7020

Long Yen Ping
Executive Director –
Head of Global Mobility Services yenpinglong@kpmg.com.my
+ 603 7721 7018

Bob Kee
Executive Director –
Head of Transfer Pricing
bkee@kpmg.com.my
+ 603 7721 7029

Ng Sue Lynn
Executive Director –
Head of Indirect Tax
suelynnng@kpmg.com.my
+ 603 7721 7271

Soh Lian Seng
Executive Director –
Head of Tax Risk Management
lsoh@kpmg.com.my
+ 603 7721 7019

Nicholas Crist
Executive Director –
Corporate Tax
nicholascrist@kpmg.com.my
+ 603 7721 7022

Dato’ Leanne Koh
Executive Director – 
Corporate Tax
leannekoh@kpmg.com.my
+ 603 7721 7026

Neoh Beng Guan
Executive Director – 
Corporate Tax
bneoh@kpmg.com.my
+ 603 7721 7025

Ong Guan Heng
Executive Director – 
Corporate Tax
guanhengong@kpmg.com.my
+ 603 7721 7027

Chang Mei Seen
Executive Director – 
Transfer Pricing
meiseenchang@kpmg.com.my
+ 603 7721 7028

Ivan Goh
Executive Director – 
Transfer Pricing
ivangoh@kpmg.com.my
+ 603 7721 7012

 

 

 

Evelyn Lee 
Executive Director –
Penang Tax
evewflee@kpmg.com.my
+604 238 2288 (ext. 312)

Regina Lau
Executive Director –
Kuching & Miri Tax
reglau@kpmg.com.my
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director –
Kota Kinabalu Tax
titustseu@kpmg.com.my
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director –
Johor Bahru Tax
flng@kpmg.com.my
+607 266 2213 (ext. 2514)

Crystal Chuah Yoke Chin
Tax Manager –
Ipoh Tax
ycchuah@kpmg.com.my
+605 253 1188 (ext. 320)