When an employment ceases, employer may make lump sum payment to the employee in accordance with the terms and conditions of the contract of service.

Lump sum payment may be described by the employer as compensation for loss an employment, ex-gratia, contractual payment, retrenchment payments, gratuity, etc.

The circumstances and nature of payment must be reviewed to determine the real character of the payment
​.
​The amount paid may consist to these two elements which are attributable to the loss of employment (compensation) and past services of the employee (gratuity).

Compensation includes the following:

Tax treatment of compensation:
​

• 100% exempted if due to ill-health
• Exemption of RM10,000 for each completed year of service with the same employer or with companies in the same group effective from 1 July 2008.

 

​If you need further clarification, please do not hesitate to contact our tax team.

Source:

• lampiran1.hasil.gov.my/pdf/pdfam/PR1_2012.pdf
• www.mia.org.my/v2/ppt/tcontent_display.aspx?ID=1081​

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​It is advisable to be wary of any person or syndicate that uses Director General of Inland Revenue’s name to persuade taxpayers to disclose private information or to settle outstanding tax directly via their bank account.

​The syndicate may be carried out in various forms, and most recently through social media in disguise by offering tax services to help taxpayers solve tax compliance issue.

Please note that any tax dues to Inland Revenue have to be paid directly to Inland Revenue’s bank account.
​
Each taxpayer’s tax information is confidential under Section 138 of Income Tax Act 1967 and no Inland Revenue’s officers is allowed to discuss it with unrelated person.

​Inland Revenue does not appoint any 3rd party as intermediaries (i.e. middle man) other than the certified tax agents.

​Should you have any doubts regarding letters, e-mails, messages or phone calls  relating to your tax matters, you may obtain confirmation from Inland Revenue via the following;

1. Contact Hasil Care Line at 1800885436
​2. ​Contact Customer Care Officer (CCO). The list of CCO can be obtained at: ​www.hasil.gov.my/bt_goindex.php?bt_kump=2&bt_skum=5&bt_posi=1&bt_unit=3&bt_sequ=1&bt_lgv=2

​If you need further clarification or information, please do not hesitate to contact our tax advisors for professional consultation.

​As announced by the Finance Minister of Malaysia on 31 May 2018, the contributions made to Tabung Harapan are fully tax deductible under allowable deduction for gift of money to the government, state government of local authorities.

The last date for the contributions and donations to the Tabung Harapan Malaysia was on January 14, 2019.
​
In order to claim the said donation for tax deduction purposes, do keep the receipts of the transactions as stated under Subsection 44(6) of Income Tax Act 1967.

The type of receipts or documents are as follows: 

​If you need further clarification or information, please do not hesitate to contact our tax advisors for professional consultation.

In a statement issued by Ministry of Finance on 7 April 2019, the first phase Special Voluntary Declaration Programme (SVDP) will be extended until 30 June 2019. The special program for voluntary tax disclosure has been extended as follows:​

For individual taxpayers, they can voluntary disclose income earned until 31 December 2017. For company, voluntary disclosure can be made on income earned until accounting period ended 31 March 2018.

In addition, taxpayers who received notification from Inland Revenue Board of Malaysia (IRBM) regarding overseas bank account should come forward to any IRBM Branch to provide clarification and partake in voluntary disclosure, where necessary.

IRBM will accept each voluntary disclosure in good faith and tax audit investigation will not be conducted.

If you need further clarification or information, please do not hesitate to contact us.

Source:
http://www.treasury.gov.my/index.php/galeri-aktiviti/siaran-media/item/5089-siaran-media-program-khas-pengakuan-sukarela-pkps.html
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Tax refunds have always been a popular topic among all, especially on the timing of the receipt. There are several factors that will determine the processing of the tax refund within the time frame. Based on the records gathered by the Inland Revenue Board of Malaysia (“IBRM”), failure in payment of tax refunds to the recipients are due to the following reasons:

• Undelivered cheques due to difference in taxpayer’s address with the address registered in IRBM’s database.
• Mismatch of bank information, account number and identification number / company registration number between IBRM’s database and with that of the bank; and
• Closed or inactive bank account

Hence, taxpayers are advised to update their personal and banking information in the annual Income Tax Return Form (“ITRF”). Checklist for information to be updated are as follows:

• Personal identification number
• Bank account number
• Correspondence address
• Telephone number
• E-mail address
• Company registration number (Company / Organisation category)

Effective 1st January 2020, income tax refund will be fully made using the electronic method of e-payment. IBRM will also increase the use of online tax refund payment transactions via the Electronic Fund Transfer (EFT) method.

If you need further clarification or information, please do not hesitate to contact us.

Source:

• http://lampiran2.hasil.gov.my/pdf/pdfam/IRBMMedia_18032019_Reasons_Why_Tax_Refunds_Fail_To_Be_Processed.pdf
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