Chapter 3

TAX ADMINISTRATION
SELF ASSESSMENT
SYSTEM (SAS)
• Year pf implementation companies – 2001
individuals – 2004

• Under SAS, tax payers estimates the tax payable for the following
year of assessment and pay the tax in instalments.

• At the end of the basis period, they determine their taxable income,
compute their tax payable and submit the appropriate tax returns.
SELF ASSESSMENT SYSTEM (SAS)
FOR INDIVIDUALS
• Taxpayer estimates income tax payable for the year of
assessment.

• Taxpayer with business source pays tax to IRB (either in 6 bi-

monthly instalments or through the Schedular Tax Deduction
system (STD); and employees by monthly instalments.

• Taxpayer can revise their estimate of tax payable two times

during the year.
TAX RETURNS & ASSESSMENT
UNDER SAS FOR INDIVIDUALS
• Under SAS, the tax return submitted or electronically filed by a
taxpayer is deemed to be a notice of assessment on the day the return
is submitted (submission by 30 April)

• Where a person has furnished a return to the DGIR, the DGIR is

deemed to have made on that day an assessment on the chargeable
amount and the tax payable by that person (Sec. 90(1)).

• If the assessment is not contested by the taxpayer (Sec, 97) within a

prescribed time, it will become final & conclusive.
 SELF ASSESSMENT SYSTEM
(SAS) FOR COMPANIES

Companies shall Estimates shall not Companies may File tax return
provide the estimate be less than 85% of revise their within 7 month of
of the tax payable its previous year’s estimates in the the financial year
one month prior to estimate. sixth and ninth end.
the commencement month of the basis
of the business. period.
RESPONSIBILITY TO KEEP DOCUMENTS (Sec. 82)
• All business records must be kept and retain in safe custody for a
period of 7 years.

Any other records as Books of account recording:

specified by the • Receipts & payments
DGIR Records • Income & Expenditure

Invoices, vouchers, receipts and such other documents

necessary to verify the entries in any books of account.
COLLECTION OF TAX PAYABLE –
INDIVIDUALS
Schedular Tax Deduction System (STD/PCB) – for employed
individuals)

• A mechanism to collect tax from employees on the monthly basis

notwithstanding that the employee has not submitted the return.
• Employer will take into account the employee’s:
1. monthly remuneration,
2. Contribution to EPF/Pension fund
3. marital status,
4. working status of the wife, and
5. number of children.

** Employer must pay to IRB by 10th of every calendar month

 COLLECTION OF TAX PAYABLE
– INDIVIDUALS

Payment of tax
payable by individuals
Payment of tax
Refund
with business income payable balance

They can either pay IRB will refund the tax

They can pay through
lumpsum amount or on overpaid directly to the
instalments
instalment employee upon request
COLLECTION OF TAX PAYABLE –
COMPANIES
 PENALTY

If tax remain unpaid within 30

Further penalty of 5% will be
days of the date of notice
imposed if it remain unpaid
(submission of return), 10%
within 60 days after the
penalty will be added to the
imposition of the 10% penalty
tax payable (sec. 103(5))
 Recovery from wife
(joint assessment)
RE
CO Recovery from husband
VE (joint assessment)
RY
Recovery from person leaving Malaysia
(S. 104)

Refusal of Customs Clearance – in case of

transporting passengers by agent

Recovery by suit
(S.106)
 RIGHT TO APPEAL
• A taxpayer has the right to object, by writing to IRB, if they are dissatisfied
with the deemed Notice of Assessment.

• The written appeal must be made within 30 days from the NOA.

• If taxpayer are not able to appeal within 30 days, they may apply for
extension.

• The extension usually given if:

• He was not in Malaysia
• He was sick
• Change of address
• Other reasonable course
 FINAL & CONCLUSIVE OF AN
ASSESSMENT

No valid notice of appeal been given

within 30 days from the NOA

valid notice of appeal given after the

period of 30 days from the NOA, and a
notice of extension was given, but the
DG rejects the application for extension.
 FINAL & CONCLUSIVE OF AN
ASSESSMENT

Extension application received & DG is

satisfied with the reasons for extension
application. DG review the NOA and came
to an agreement with taxpayer

Extension application received & DG is not satisfied

with the reasons for extension application. DG
forward the case to the Special Commissioner (SP)
and the SP will issue the Deciding Order
THREE TYPES OF AGREEMENT MAY BE REACHED
BETWEEN DG & TAXPAYER

Written agreement with the Oral Agreement -with the

taxpayer. The original taxpayer. DG will follow up with
assessment may be confirm or a written confirmation with the
reduced, or increased or agreement
discharged. (S.101(2))

Written proposal and the

taxpayer may accept or reject
the proposal within 30 days
from the service of the
proposal.