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The Tax-Related Implications of the Movement Control Order (Update)

The Tax Related Implications of the Movement Control Order Update R27

As you are all aware, the Movement Control Order (MCO) was recently extended by the Malaysian Government, which at the point of writing of this alert, covers the period from 18 March 2020 to 14 April 2020.

The following are the updates by the Inland Revenue Board of Malaysia (IRBM) and

Royal Malaysian Customs Department (RMCD) on filing and procedural matters.

Updates by IRBM

1. ‘Frequently Asked Questions (FAQ) On Tax Matters During The Movement Control Order Period’ (Updated 26 March 2020)

The IRBM has updated the above FAQ to cover the period extended under the MCO. The following is a summary of the important clarifications, with the changes highlighted. To read the full FAQ, please visit: http://lampiran1.hasil.gov.my/pdf/pdfam/faq_1.pdf

  Question Remarks by the IRB
1. GENERAL
(a) Extension of time to submit documents for audit or investigation within the period of 18 March 2020 until 29 April 2020. Extension of time will be given until 30 April 2020.
(b) Extension of time to provide feedback to IRB letters within the period of 18 March 2020 until 29 April 2020. Extension of time will be given until 30 April 2020.
(c) Donation to the Covid-19 Fund.

Donation to the Covid-19 Fund allowed as tax deduction.

Please refer to Appendix 1 for the IRBM’s Press Release dated 26 March 2020 on the matter.

2. FORMS
(a) Extension of time for the submission of return forms either manually or e-Filing.

The last day to file the various income tax return forms has been extended by up to two months from the original deadline.

Please note that the special extension of two months does not apply to companies with financial year ended on 31 December 2019.

Please refer to Appendix 2 for the full details.

(b) Extension of time for the submission of Form CP58. Extension of time will be given until 30 April 2020.
(c) Submission of Country-by-Country Reporting (CbCR).

a) Entities in Malaysia responsible for the filing of the CbCR report will be given an extension of time as follows:-

  • CbCR report for submission due on 31 March 2020. Extension of time until 15 May 2020.
  • CbCR report for submission due on 30 April 2020. Extension of time until 15 May 2020.

b) Constituent entities in Malaysia responsible for the submission of CbCR notification will b given an extension of time as follows:-

  • CbCR notification for submission due on 31 March 2020. Extension of time until 15 May 2020.
  • CbCR notification for submission due on 30 April 2020. Extension of time until 15 May 2020.
(d) Extension of time to Labuan entities for the submission of irrevocable election form to be taxed under the Income Tax Act 1967 (Form LE3) where the due date is during this period.

Example of scenario:

Accounting period / basis period for a Labuan entity is 01/01/2020 – 31/12/2020. The due date for submission of Form LE3 for Year of Assessment 2020 is on 31/03/2020. Extension of time will be given until 30 April 2020 for the submission of Form LE3 for Year of Assessment 2020.

3. PAYMENT
(a) Extension of time to submit CP204 tax estimates.

The deadline for submission of the CP204 which falls between 18 to 31 March 2020 will be extended to April 30 2020.

The submission of amendments to the estimated tax payable (CP204A) for the 6th and 9th month which is due by March 31 2020 will be extended to April 30, 2020.

(a) Extension of time to submit CP204 tax estimates.

The deadline for submission of the CP204 which falls between 18 to 31 March 2020 will be extended to April 30 2020.

The submission of amendments to the estimated tax payable (CP204A) for the 6th and 9th month which is due by March 31 2020 will be extended to April 30, 2020.

(b) Extension of time for the first payment of CP500 tax estimates. The first instalment which should be paid by 31 March 2020 is extended to 30 April 2020.
(c) Deferment and revision of tax estimate payment (CP204) in the 3rd month (for March 2020 cases) instalment in 2020 under the Economic Stimulus Package. Submission of tax estimate revision (CP204A) in the 3rd month and the instalment payment is extended to 30 April 2020.
(d) Can payment of tax estimate for companies be deferred? Companies have an option to defer (if the activity of the company is related to tourism) or revise tax estimates in the 3rd month if the 3rd month instalment falls in March 2020.
(e) Will I be imposed with a tax increase if there is a delay in making payment during this period? Extension of time for tax payments will be given until 30 April 2020. Therefore payments received during this period will not be subjected to tax increase.
(f) Submission of forms and payment of tax for Labuan entities during this period. Extension of time of up to 30 April 2020 will be given to submit forms and make tax payments.
(g) How to make withholding tax payment during this period?

Payment of withholding tax which falls between 18 March 2020 to 14 April 2020 can be made beginning 1 April 2020 up to 30 April 2020.

Payment can also be made through telegraphic transfer (TT) by furnishing complete payment details to IRBM through fax at 03-6201 9637 or through e-mail at:

HelpTTpayment@hasil.gov.my

(h) Will penalty be imposed on withholding tax payments which should be made during this period? Payment of withholding tax which falls between 18 March 2020 to 14 April 2020 can be made beginning 1 April 2020 up to 30 April 2020. No penalty will be imposed on late payment.
(i) Will compound payment for Monthly Tax Deduction (MTD) which should be paid during this period be deferred? Payment can be made before 30 April 2020.
(i) Will compound payment for Monthly Tax Deduction (MTD) which should be paid during this period be deferred? Payment can be made before 30 April 2020.
4. REAL PROPERTY GAINS TAX (RPGT)
(a) Is extension of time provided for the submission of RPGT return forms and payment? For the submission of RPGT return forms and payment of RPGT (section 21B or payment of notice of assessment) where the due date falls within 18 March to 30 April 2020, the deadline for filing of the forms and payment is 30 April 2020.

2. The Due Date For Data Submission As Well As Monthly Tax Deduction (MTD)/CP38 Payment

The IRBM announced on 26 March 2020 that the due date for data submission as well as Monthly Tax Deduction (MTD)/CP38 Payment for March 2020 remuneration will be extended to 30 of April 2020.

Updates by RMCD

1. Due Date For Submission Of Returns And Payments

The RMCD has announced through their media release on 25 March 2020 that any returns/forms (including Sales and Service Tax returns) that are due to be submitted to RMCD on 31 March 2020 are allowed an extension until 30 April 2020.

Any penalty which may be due or imposed for the submission of the returns / forms to the RMCD on or before 30 April 2020 will be given full remission.

Payment via online or by postal services is encouraged.

MEDIA RELEASE

INSENTIF POTONGAN CUKAI BAGI SUMBANGAN KEPADA TABUNG COVID-19.

Source: http://lampiran1.hasil.gov.my/pdf/pdfam/Media_LHDNM_26032020_INSENTIF_POTONGAN_CUKAI_BAGI_SUMBANGAN_KEPADA_TABUNG_COVID19.pdf

 

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