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| Related Topics: | Tax
Advice | Tax Audit
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Tax
Penalty, Offences & Compound
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An
offence is committed under the Income Tax Act 1967 under the
following circumstances :
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1.
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Failure
to notify chargeability ( Subsection 77(2) or 77(3) )
Rate of penalty
10% of the total tax payable subject to a minimum of RM 300 and a
maximum of RM 5,000.
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2.
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(a)
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Late
submission of Return Form (Subsection 77(1) and 77(1A))
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(b)
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Taxpayer's
wife fail to declare her source of income after making a
declaration in the Return Form.
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-
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Rate
of Penalty Under Subsection 112(3)
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A.
Employment Case (SG) (except directors of control company)
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Offences
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Rates
on tax payable
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Min
(RM)
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Max
(RM)
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First
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2%
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50
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100
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Second
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5%
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100
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200
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Third
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10%
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150
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300
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Fourth
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10%
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200
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500
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Fifth
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10%
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250
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750
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Sixth
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15%
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300
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1,000
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Seventh
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15%
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350
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1,500
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Eighth
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15%
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400
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2,000
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Ninth
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15%
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450
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2,500
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Tenth
and above
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20%
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500
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3,000
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B.
Non-employment case (including directors of a control company) |
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Offences
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Rates
on tax payable
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Min
(RM)
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Max
(RM)
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First
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5%
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200
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2,000
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Second
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10%
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300
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3,000
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Third
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10%
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500
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5,000
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Forth
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15%
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600
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6,000
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Fifth
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15%
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800
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8,000
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Sixth
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15%
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1,000
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10,000
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Seventh
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20%
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1,200
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12,000
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Eighth
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20%
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1,500
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15,000
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Ninth
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20%
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1,800
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18,000
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Tenth
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20%
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2,000
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20,000
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3.
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(a)
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Late
submission of Return Form after 2 years when the case is being
audited or investigated.
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(b)
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Fraud,
omissions and understatements.
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Rate
of penalty under Subsection 113(2)
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Duration
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Rate
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Voluntary
declaration (before the case being taken up for audit or
investigation)
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<
1 year
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15%
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1
year - < 3 years
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25%
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3
years - < 5 years
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40%
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5
years & above
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50%
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Voluntary
declaration (after taxpayer being informed but before the
commencement of audit)
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50%
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Findings
during audit
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60%
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For
repeated case.
Rate of penalty:
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60%
of tax payable plus 10% for every repeated offence but the total
penalties increased are subject to a maximum of 100%.
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For
Investigation cases :
Rate of penalty :
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A.
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For
offences involving omissions from or understatements in the
Return Form not supported by accounts due to negligence.
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60%
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B.
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For
offences involving omissions from or understatements in the
Return Form supported by accounts due to wilful default.
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75%
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C.
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For
fraud offences which involve understatements either in the
Return Form or accounts of a deliberate nature.
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100%
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D.
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Deliberate
and persistent understatements.
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Not
less than
100%
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4.
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Failure
to comply with Notice.
Rate of compound
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Offences
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Compound
payment
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First
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RM 200 to RM 300
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Second
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RM 300 to RM 500
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Third
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RM 500 to RM 700
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Fourth
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RM 700 to RM 1,000
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Fifth
and above
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Minimum of RM 800 and maximum of RM 2,000
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5.
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Failure
by companies to submit estimate according to subsections 107C(2),
107C(3) and 107C(4)(a).
Rate of compound
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Estimate
of Tax Payable
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Compound
Payment
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RM
500 and less
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RM
300
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RM
501 to RM 1,000,000
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RM
500
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More
than RM 1,000,000
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RM
1,000
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