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The Malaysian Inland Revenue Board (“MIRB”) has issued an updated Tax Investigation Framework (“the Framework”) which replaces the Tax Investigation Framework dated 15 May 2018. The Framework comes into effect on 1 January 2020.

The salient changes of the Framework are as follows:- 



New Paragraphs / Amendments


Investigation activity

· The MIRB officer may request for information and documents from the taxpayer, tax agent and third party.


· The taxpayer may be required to provide information and oral explanation at the MIRB’s offices.


· MIRB officers may also visit the taxpayer’s premise with written notification provided prior to the visit (replacing previous notion that no notice would be issued beforehand)


Offences and penalties

Failure to furnish return


· Under Section 112(1A) of the Malaysian Income Tax Act, 1967 (“MITA”), upon conviction, any person who makes default in furnishing a return in respect of any year of assessment for two (2) years or more shall be liable to a fine of not less than RM1,000 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both and a special penalty equal to treble (300%) the amount of the tax which has been undercharged (replacing tax charged).


· Under Section 112(3) of the MITA, where no prosecution has been made, the Director General may impose penalty equal to treble (300%) the amount of the tax which has been undercharged (replacing tax payable).

With the above amendments, in the event of a tax investigation, taxpayers should ensure their tax matters are handled by an experienced tax agent. 

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 require our assistance, you may contact Soh Lian Seng at +603 7721 7019 or any of the Tax Dispute Resolution team members whom you are accustomed to dealing with or who are responsible for the tax affairs of your organization at the respective contact details below.

Tax Dispute Resolution Team Members

Eddie Yau                                   
Executive Director                       
+603 7721 7011
Ng Wei Wei
Executive Director
+603 7721 7201
Emily Wong
+603 7721 7253
Jeannie Tan
Associate Director
+603 7721 7216
Edward Liyu
Associate Director
+603 7721 7256
Calise Lim
+603 7721 7206
Michelle Tay
+603 7721 7258