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Related Topics: | Tax Advice | Tax Administration | |
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Filing, payment procedures for individuals in business |
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Extracted from the Star
Publications, 24/04/00 By Dr K. Jeyapalan EVERY person who is chargeable to tax is
required to file a return of his income with the Inland Revenue Board. It
is this filing requirement that sets the wheel of administrative machinery
into motion. The tax filing programme of companies was
discussed in the previous "Tax Matters" column. It was mentioned
that every company is required to furnish to the Director General of
Inland Revenue a tax return in the prescribed form for each year of
assessment within six months from its financial end. Individuals,
associations, partnerships, trusts and co-operatives In this article, the filing and payment
procedures for individuals operating a business, associations,
partnerships, trusts and co-operatives are discussed. For individuals, associations,
partnerships, trusts and co-operatives, Return Forms were issued by IRB in
early part of year 2000. Final notices are to be issued at a later date
for persons that have not filed in their returns. Filing deadlines
Return Forms must be filed within 30 days
from the date of service of the notice. These Forms were issued in the
early part of the year 2000. It has been the practice of IRB to grant
concessions to extend the deadlines normally upon written application by
the taxpayer. Filing extension may usually be extended to 31 May. Assessments
Income tax assessments for the year of
assessment 2000 on a preceding year basis and current year basis are now
discussed. Year of
assessment 2000 (preceding year basis) Prior to 1.1.2000, income for a person
was taxed on a preceding year basis. For example, income for 1998 is taxed
in the year of assessment 1999. In situations where the income tax of
individuals operating a business; associations, partnerships, trusts and
cooperatives is completely waived, then the IRB will not issue a notice of
assessment. However a notification confirming the
losses and capital allowances to be carried forward will be sent to the
taxpayer. In cases where the tax is only partially waived, IRB will issue
a computation of income on which tax is waived together with a notice of
assessment and computation of repayment (if any) indicating the balance of
tax payable or refundable. Appeals The appeal procedure is the same as for
any other year and the provisions are contained in Section 99 Income Tax
Act (ITA). Appeals must be made within 30 days from the date of service of
the notice of assessment. Year of
assessment 2000 (current year basis) As from 1.1.2000, the current year basis
of assessment will not only involve companies but also individuals,
associations, partnerships, trusts and co-operatives. The new filing
program Under the new assessment system, IRB will
not issue the return form quarterly as in the case of companies. Instead,
the Return Form will be issued in early 2001 for individuals, businesses,
partnerships, trusts and co-operatives. Individuals operating a business,
associations, partnerships, trusts and co-operatives chargeable to tax
must notify the IRB on or before 15 April 2001, if it had not yet been
required to make a return by then by the IRB. The IRB will issue a notice
of assessment based on the return submitted. Payment of taxes
The payment schedules applicable to
companies will not apply for individuals operating a business,
associations, partnerships, trusts and co-operatives. Instead, the IRB will issue a notice of
bi-monthly instalment payment (Form CP 200) in January and February 2000
to all individuals operating a business, associations, partnerships,
trusts or cooperatives. Installments will start in March 2000 and
will be completed by January 2001. All installment payments must be paid
within 30 days of the. due date. Failure to do so will attract a penalty
of 10% on the balance outstanding. A further five (5)% on the amount
outstanding will be imposed after a period of 60 days. Collections
(revised estimates) Individuals operating a business;
associations, partnerships, trusts and co-operatives are allowed to make a
revision to its estimates before the 15th of April 2000. The IRB will then
issue an amended notice of installment payment using Form CP 203 to the
taxpayer. Payments must be remitted to the IRB
either through the post, the Bank Bumiputra Commerce or credited at any of
the IRB payment counters. In all cases taxes must be settled within 30
days from the date of issue of a notice of assessment or 30 days after the
last installment is due. |
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Note: Dr K. Jeyapalan is an expert in taxation and was working in the IRB of Malaysia. |
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