eKTP 85

Special Tax Refund For Doctors
Part 1 of 3

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Inland Revenue Board of Malaysia (IRBM) formed a sub-task force unit at Seremban in October 2015 to carry out specific audit assignment against top 20 specialist doctors in the region who operate under a special business vehicle (Sdn Bhd) although most of the contracts are between the Hospital/Medical Centre and respective specialist doctors. Malaysian Medical Association (MMA) being a pressure group for the profession, intervened during sub task force’s audit process to solve the matter amicably. MMA also claimed that they were not advised by their accountants that the specialist doctors are prohibited to practice vide Sdn Bhd despite this practice being in practice for more than three decades.

On 09-09-2016, IRBM released their Director General of Inland Revenue (DGIR)’s decision that specialist doctors are not allowed to declare their income vide Sdn Bhd, whereas the same shall be reported vide Section 4(a) of Income Tax Act 1967 (Act 53). DGIR also extended special pathway for Voluntary Disclosure mechanism only for three year of assessments through the existing tax amnesty programme introduced by the Prime Minister on 28-01-2016.

Whereas on 28-06-2018, the present DGIR issued a fresh direction that excess taxes and penalties for year of assessment 2013 to 2016 will be returned or will be considered for tax credit depending on case to case basis vide statutory appeal application (Form Q) & extension of time application (Form N). IRBM also mentioned that option to continue the practice under special business vehicle (Sdn Bhd) or personal capacity would be determined on case to case basis but the process application is unexplained.

To be continued… Please follow us to next article on appeal procedure.