LHDN’s new Tax Investigation Framework 2020https://themalaysianreserve.com/2020/01/07/...framework-2020/THE Inland Revenue Board Malaysia (LHDN) has issued a new Tax Investigation Framework 2020 to replace the Tax Investigation Framework issued on May 15, 2018.
The new framework, which took effect on Jan 1, 2020, is aimed at informing taxpayers about LHDN’s tax investigation procedures.
In general, the framework outlines the rights and responsibilities of officers, taxpayers and tax agents; assists taxpayers to fulfil their obligations; and informs taxpayers of the legal provisions relating to a tax investigation.
These are the key points.
Investigation ProceduresRequest for Documents and InformationAn investigation can be carried out by issuing letters requesting documents and information from the taxpayer, tax agents and third parties.
The taxpayer may be required to give information and an oral explanation at LHDN offices.
LHDN officers may also visit the taxpayer’s business premises with a written notification given prior to the visit.
Inspection VisitInvestigations can also be carried out by making an inspection visit without prior notice to the taxpayer’s business premises, residences, tax agent’s premises, third parties and other premises as necessary.
Examination of DocumentsThe LHDN officer will inspect the taxpayer’s business documents and/or personal documents. The inspection is to gather evidence of tax evasion and request any party to produce documents in his custody or control.
Record StatementAt least two LHDN officers will be present during the recording of statements from persons related to the case being investigated. Qualified lawyers can be present during the recording of statements as well.
Finalisation of InvestigationAfter completion of the investigation procedures, LHDN will issue a letter to the taxpayer confirming the finalisation of the investigation.
If a settlement is agreed upon, an agreement or letter of undertaking will be signed.
The investigation is considered finalised after the case is approved by the DG of LHDN and an assessment is raised. Taxpayers who have been investigated will be monitored by LHDN.
If the taxpayer does not agree with the investigation findings, the DG may, according to the best of his judgement raise an assessment with a penalty.
Cases which are to be prosecuted will be forwarded to the legal department. Failure of a taxpayer to attend court proceedings after summons are served, may result in a warrant of arrest being issued.