As part of the Malaysian Budget 2022 speech last year, the Minister of Finance announced that it will introduce a special voluntary disclosure program for indirect taxes as part of concerted measures to increase tax revenue for the Malaysian Government. The guidelines1 underpinning the foregoing program (“Guidelines“) was recently published by the Royal Malaysian Customs Department (“Customs“) with a notable inclusion of an amnesty element (discussed below) within the framework of the rebranded Voluntary Disclosure and Amnesty Program for indirect taxes (“VA“).
For the business community in Malaysia, the VA is a reminiscence of the special voluntary disclosure program for direct taxes which was introduced in 2018 by the then Malaysian Government which has had mixed reactions from participating Malaysian taxpayers. This is primarily given the lack of guaranteed audit immunity on the disclosed compliance affairs and the potential domino effect that the voluntary disclosure may have on the participant’s audit risks moving forward, which may neutralize any anticipated benefits.
Source Baker & McKenzie
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