Introduction
- Tax system in Msia governed by ITA 1967
- Tax administration handled by IRB
- Head of IRB: Director General
- Self-assessment system replaced official
assessment system in YA2004
Functions of IRB
- Act as agent to the govn in administering,
assessing, collecting & enforcing payment
of various taxes
- Advise govn on matters relating to
taxation & to liaise with the appropriate
ministries/statutory bodies
- To participate in & outside Msia; taxation
matters
- Perform such other functions as conferred
on the Board by any written law
Power of Director General
- Call for other persons to give infos
(orally/written)
- Access to lands, buildings, books & other
documents
- Prevent taxpayer from leaving country
- Appoint an agent
- Grant an appeal
- Raise advance, additional & protective
assessment
- Demand for any
documents/books/translation
Chargeable person
- Individuals
- Companies & bodies of persons -
managemnet
- Company in liquidation – liquidator
- Incapacitated person – -
parents/guardian/agents
- Non-residents/deceased person – agent
- Trust body – trustee
- Sea & transport undertakings – captain
- Hindu joint family – Karta
- Rulers & ruling chief – agent
Types of returns
Returns : Tax forms that need to be filled in,
signed and sent back to IRB by taxpayers
- B : Individual having business income
- BE : Indv. w other income than business
- M : Non-resident
- C : Companies
- C1 : Co-operative society
- P : Partnership
- E : Employer
- T : Trusts, deceased person, club,
association, societies, Hindu joint family
Responsibility of Employees
- Submits BE return form not later than 30
Apr in the following YA
- Inform IRB any change of address (within 3
months)
- Settle tax liability within stipulated time
- Keep proper records for at least seven YA
- Pay penalty, if any
- Declare actual income from all sources
- Furnish all information requested
Responsibility of Employer
- Form EA/EC ; details of remuneration paid,
EPF contribution & tax deduction for each
employee
- Give notice of commencing employment to
IRB – new employee chargeable to tax
(CP22)
- Give notice on cessation of employment to
IRB (CP22A)
- Inform IRB of employee leaving M’sia for
more than 3 months (CP21)
Retains money due to employee
- Comply with Schedular Tax Deduction
Types of assessment Advance assessment (prediction) earlier than
OA
Original assessment
- Arises when:
- DG accept & prepare assessment to
i) Taxpayer ceases to carry on a business
determine chargeable inc & tax payable
ii) Taxpayer commences to receive
- Tax return submitted is deemed Notice of
employment income, pension, annuity
Assessment
& other periodical payment
- Cannot be altered
iii) Taxpayer about to leave Msia & his
income about to cease upon leaving
Additional assessment (appeal)
iv) Taxpayer carrying on business sea/air
- Raised by DG if taxpayer omitted certain
transport
income, tax refunded to the taxpayer by an
v) Where basis period of
error, additional inc not declared in return
business/investment source not same
form
with calendar year
vi) Taxpayer receives income after
Reduced assessment (appeal)
cessation of business
- To reduce income tax liability
- Arise when appeal made against an
Protective assessment
assessment where taxpayer reach
- Issued to avoid assessment being time
agreement with DG during review of
barred (to avoid exceeding 5 yr limit)
assessment (unaware), or win the case thru
appeals to Special Commissioner/ court
Appeal – right to appeal (dissatisfied with
decision
assessment made by IRB)
- File appeal within 30 days of date of
Composite Assessment
submission of tax return/ within 30 days
- Arise when taxpayer
after the service of a notice of additional
i) Default in furnishing a return (wrong
assessment from IRB
type of forms)
- Specify details & state grounds of appeal
ii) Fails to give notice of chargeability
iii) Makes incorrect return form
Situations that allow taxpayers to make appeal
iv) Give incorrect info that affect his own
- Taxpayer dissatisfied with the deemed
chargeability
notice of assessment or add. Assessment
- Issued when total amt is made up out of tax
- Personal relief has not been appropriately
lost & penalty may be imposed by DG
given
- Once Comp.A(CA) was issued, the tax would
- Forgot to claim certain expenses for relief
be final & conclusive (no appeal)
- Error on the assessment issued by IRB
officers
Increase Assessment
- Issued when: Condition – Final & Conclusive Appeal
i) Taxpayer reaches an agreement with - No appeal made within 30 days
DG - No application to extend appeal time
ii) Special Commissioner has decided the - Taxpayer & DG reaches an agreement
issue in dispute and result in increase - Court has determined an appeal and there
assessment no right of further of appeal
- Final & conclusive - Taxpayer dies before appeal & no request
to proceed with the hearing
Collection of taxes
i) Compulsory Installment Scheme
DG will direct amount & time taxpayers
should pay
ii) Schedular Tax Deduction Scheme (pay
earlier/in advance)
Employers responsible to deduct taxes
from employees’ monthly remuneration
iii) Deduction of tax from pensions
Payer responsible for tax deduction
against income

Recovery of taxes
i) Joint assessment – recover from
wife/husband
ii) Persons leaving Msia – prevent from
leaving Msia until taxes are paid (S 104)
iii) Refusal of customs clearance (business) –
clearance from port/airport refused until
taxes paid (S 105)
iv) Recovery by civil suit (saman) – Tax
payable even if appeal has been made (S
106)