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The Malaysian Inland Revenue Board (“MIRB”) has issued Tax Audit Framework (Amendment 1/2018) (“the Framework”) which will replace the Tax Audit Framework dated 1 May 2017. The framework will be effective from 1 April 201

The amendments made under the Framework amongst others are   extension of audit coverage to companies or related business controlled by taxpayer (replacing the extension of audit coverage to companies or related business with common directors) and inclusion of voluntary disclosure paragraph to encourage taxpayers to voluntarily disclose their failure to comply with the law at any time before an audit commence.

We also wish to highlight below the notable changes in the Framework:-

  • Period of completion for tax audit reduced to three (3) months as compared to four (4) months previously.
  • Shorter time frame for taxpayer to respond to the MIRB’s request for documents and information (i.e. 14 days instead of 21 days); and
  • Shorter time frame for taxpayer to respond to the audit adjustments issued by the MIRB (i.e. 18 days instead of 21 days).

 

It is also important to note that in certain desk audit cases, letter to request for documents or information will not be issued by the MIRB, instead taxpayers will be informed of audit adjustments and tax payables together with the issuance of Notice of Assessment.

Based on the above changes, you would note that time is a crucial factor during the tax audit. 

In view of the above amendments, it is important for taxpayers to continue to enhance the quality of their documentation and accounting records and effectively evaluate their readiness to be selected for audit at any time. This is critical to avoid being imposed a hefty penalty.

Taxpayers may choose to manage this issue by undertaking a tax health check to have a better understanding of their tax position.

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

For further enquiries, you may contact Soh Lian Seng at +603 7721 7019 or any of the Tax Risk Management team members whom you are accustomed to dealing with or who are responsible for the tax affairs of your organization at the telephone number below.

Tax Risk Management Team Members

Eddie Yau                                   

Executive Director                       

+603 7721 7011

 

Ng Wei Wei

Director

+603 7721 7201

 

Yeoh Char Tong

Director

+603 7721 7013

 

Emily Wong

Director

+603 7721 7253

 

Jeannie Tan

Associate Director

+603 7721 7216

 

Edward Liyu

Associate Director

+603 7721 7256

 

Chan Sam Yeow

Manager

+603 7721 7258