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Life is too short to spend your precious time trying to convince a person who wants to live in gloom and doom otherwise. Give lifting that person your best shot, but don't hang around long enough for his or her bad attitude to pull you down. Instead, surround yourself with optimistic people.
   --  Zig Ziglar 

Tax Session


Are you ready for the IRB officers visiting t o your doorstep?

With the implementation of self assessment system for sole proprietors, individual, association and etc in the year 2004, we foresee increasing tax audits by the Inland Revenue Board (IRB) to ensure the tax return submitted by taxpayers are correct and prepared in accordance with the provision of law, guideline and ruling issued by the IRB.

Tax audit is the key enforcement tool which generally conducted in two ways namely desk audit and field audit.

Desk Audit-This is a conventional way of tax audit which involves the review of document/information obtained through correspondences and interviews at the IRB’s offices.

Field Audit-This has become the most common way of tax audit under self assessment system. Field audit entails a visit to the taxpayer’s premises for a detailed review of all relevant documents. The selection of taxpayers for a field audit is based on various criterias such as business performance, inconsistency of reporting income, spending habits, past compliance records, third party information and etc. Once the taxpayer is selected for field audit, the taxpayer is usually given 2-4 weeks notice to get the documents ready for audit. The notice may be extended through written request.

What if you were not ready? The penalty regimes awaiting you are as follow:-

Penalties for omission/non disclosure

Voluntary disclosure before selection for audit

< 1 year                    : 15%

1-<3 years                : 20%

5 years and above   : 30%

Voluntary disclosure before audit commences


Non-disclosure (Discovery during audit)


Repeated offences

45% + 10% for each repeated offence not exceeding 100%

Penalty for not providing reasonable facilities and assistance

Fine RM 1,000-RM 10,000   or

Imprisonment <1 year          or


Penalty for failure to keep sufficient records

Fine RM 200 - RM 2,000   or

Imprisonment < 6 months or


Having aware of the risk, there is a need for taxpayers to take a proactive attitude and approach in seeking ways to minimize tax risks.

If you have any queries or even wondering whether you are ready for the tax audit, please feel free to contact us. We shall be pleased to assist you in resolving your queries.

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