In Malaysia, companies may face penalties imposed by Lembaga Hasil Dalam Negeri (LHDN) for late submission or non-payment of taxes, inaccurate reporting, failure to maintain proper records and other non-compliance issues. It's important to stay on top of your tax responsibilities to avoid those penalties and ensure smooth operations for your business.
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The penalties are listed as below:
Late payment of income tax | 10% of tax payable  |
Late payment of tax instalment | 10% of outstanding tax instalment amount  |
Underestimation of tax estimate by 30% of actual tax payable | 10% of difference in actual tax payable and estimated tax  |
Failure to furnish income tax return | Fine not exceeding RM20,000 or imprisonment or both  |
Failure to furnish income tax return for 2 YAs or more | Fine not exceeding RM20,000 or imprisonment or both; and 300% of tax liability  |
Make an incorrect tax return by omitting or understating any income or providing wrong information | Fine not exceeding RM10,000 and 200% of tax undercharged   |
Tax evasion wilfully and intentionally or assisting any other person to evade tax | Fine not exceeding RM20,000 or imprisonment or both and 300% of tax undercharged  |
Attempt to leave the country without paying tax | Fine not exceeding RM20,000 or imprisonment or both  |
Failure to comply with IRB request for information | Fine not exceeding RM20,000 or imprisonment or both  |