Asklegal
Home banner 84f7f9d6 494c 4095 95db 5fd678b6c0c6

General

5 tax offences you probably didn't know exist in Malaysia

2021-03-04 691b2141 a707 421f 8f92 2bc2c1a7f386 Mikaela A

37

Shares

A+

A-

This article is for general informational purposes only and is not meant to be used or construed as legal advice in any manner whatsoever.

A+

A-


If you’re wondering why you’ve been seeing a tonne of tax articles lately, that’s because it’s time to file your taxes! As of March 1st 2021, e-Filing for last year’s returns have started. In case you missed it, we just wrote about the tax reliefs and rebates you can get this year. We’ll leave the link to that at the end of this article.

Now, before you start filing your taxes, it’s important to know the types of tax offences that we have in Malaysia. We’ve covered some of them before:

[READ MORE5 common Malaysian tax offences you don’t want to accidentally commit]

So this article is more of a part two to that, and we’ll be looking at some lesser-known offences here.

 

1. Not informing LHDN of your new address

Image from MakeAGif

Section 89 of the Income Tax Act 1967 says:

Every person chargeable to tax who changes his address in Malaysia...for another address in Malaysia shall within three months inform the Director General of the change by notice in writing.

This means that if you move to a new place within the country, you need to send a letter to the Director General of the Inland Revenue (LHDN) telling them your new address within 3 months of moving. The penalty for failing to do this can be found in Section 120 of the same Act, where it says:

(1) Any person who without reasonable excuse— 
(d)...contravenes section 89...
shall...be liable to a fine of not less than two hundred ringgit and not more than twenty thousand ringgit or to imprisonment for a term not exceeding six months or to both

TLDR: If they find you guilty of this offence, you can be fined anywhere between RM200- RM20,000, be jailed for a maximum of 6 months, or both. The section also says you’ll be penalized if you do it ‘without reasonable excuse’. So if you did have a good reason for failing to notify them of your change in address, you might be off the hook.

 

2. Leaving Malaysia without paying your taxes

Image from RojakDaily

Section 104 of the Income Tax Act says:

(1) The Director General, where he is of the opinion that any person is about or likely to leave Malaysia without paying—
(a) all tax payable by him (whether or not due or due and payable);
(b) all sums payable by him under subsection 103(1A), (3), (4), (5), (6), (7) or (8) or subsection 107B(3) or (4) or subsection 107C(9) or (10)*; and
(c) all debts payable by him under subsection 107A(2) or 109(2), 109B(2) or 109F(2)*,

*We know this is a LOT of subsections, and we can’t type them all out here in detail, but essentially, they are the types of taxes and debts you need to pay to the government.

The section goes on to say that you if you don’t pay all of the above and keep evading them, the Director General can issue a certificate which has all the details of your unpaid tax to the police or immigration, preventing you from leaving the country until you pay your dues. Section 115 of the Act goes on to say that if you know you’re prevented from leaving the country, but you still leave or try to leave, you can:

  • be fined anywhere from RM200-RM20,000
  • be jailed up to 6 months
  • receive both of the penalties above
  • be arrested by the police or immigration without a warrant if they suspect that you’re about to leave/have left the country

[READ MORE6 reasons Malaysians can be stopped from leaving the country]

 

3. Not letting an officer do their job

Image from Pepitih

Generally, preventing an officer or official from carrying out their duties is a no-no, and the same applies to tax officers. It’s a pretty long section, but Section 116 of the Income Tax Act says that a person who:

  • prevents an officer from entering a land or building for investigations
  • refuses to provide any books or documents requested by the officer
  • refuses to help with any investigations done by the officer
  • refuses to answer any important questions lawfully asked by the officer

can be fined anywhere between RM1,000-RM10,000, be jailed for a maximum of one year, or both.

 

4. Employers who don’t provide EA forms for employees

Image from The Star

If you’re a boss of a company, this one’s for you. Just before the start date to file taxes, employers are supposed to give an EA form to each employee. This form will detail how much you earned the previous year, what deductions were made (such as EPF and EIS), and how much your taxable income is, among others. The duty to do can this be found in Section 83(1A) of the Act, which is pretty long, and that’s why we’ve summarized it for you.

The penalty, however, can be found in Section 120: Employers who fail to provide this form can be fined RM200-RM20,000, be jailed up to 6 months.

 

5. Helping someone commit tax offences

Image from GIPHY

Yes, you read that right. Even if you yourself didn’t commit any of these offences (but you helped someone to), you can be in trouble with the law. 

Section 121(2) of the Income Tax Act says:

Any person who aids, abets or incites another person to commit an offence under section 113, 115, 116 or 118 shall be deemed to have committed the same offence and shall be liable to the same penalty.

The 4 offences listed above are:

  • Section 113- incorrect returns (underpaying your taxes/giving LHDN wrong information)
  • Section 115- leaving Malaysia without payment of tax
  • Section 116- obstruction of officers (preventing officers from carrying out their duties)
  • Section 118- offences by officials (tax officials themselves committing offences)

If you’re caught helping someone commit any of these offences, you can be given the same punishment as the offender.

So be careful not to break the law, whether accidentally or purposefully, as these penalties aren’t exactly light. If you’re unsure about something, do get in touch with LDHN to clarify your doubts. And if you’ve already started filing your taxes, take note of the tax reliefs you can get this year:

[READ MORE: 4 tax reliefs you can get in Malaysia in 2021]

Tags:
immigration
tax relief
lhdn
cukai
tax
income
revenue
691b2141 a707 421f 8f92 2bc2c1a7f386

About the Author Mikaela A

Don't talk to me until I've had my Milo

37

Shares

A+

A-