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Tax Planning: offshore account holders come clean with taxman Pathma Subramaniam / The Edge Malaysia This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on January 14, 2019 - January 20, 2019. Malaysians with assets and income kept in tax-free or low-tax jurisdictions could avoid being slapped with steep penalties in the future by responding to the Inland Revenue Board’s (IRB) special voluntary disclosure programme (SVDP), says Stefanie Low Geok Ping, executive director of business tax, tax audit and investigation at Deloitte Tax Services Sdn Bhd. She explains that prior to the ratification and implementation of the Standard for Automatic Exchange of Financial Account Information in Tax Matters in 2017, there was no compulsion for taxpayers to reveal assets outside Malaysia as the country practises a territorial tax system. But now, signatories of this agreement have the ability to harness financial information for auditing purposes. So, taxpayers with cross-border accounts have to be prepared to answer for their financial transactions. “Take the British Virgin Islands, which is a tax-free jurisdiction. If you park your [business] profits there, you do not pay any taxes. However, if those profits originated from business activities in Malaysia, then the income should be considered sourced in Malaysia and subject to Malaysian tax laws. Just because you have it paid to a British Virgin Islands bank account does not mean that tax does not have to be paid in Malaysia,” says Low. “To avoid being taxed, some people may have two sets of accounts, where one captures some of the income in Malaysia while the rest is pushed to an offshore entity. So, you pay tax on the Malaysian portion, but not the overseas portion. That is considered tax evasion. “Such practices have been prevalent for many years. Many people think that by keeping money in an offshore account, they are protected from the Malaysian tax authorities. People did not expect this international collaboration on the automatic exchange of information to take place. This is a new rule and it is effective in more than 100 participating countries. So, there is really nowhere to hide.” The automatic exchange of financial account information was set up by the Organisation for Economic Cooperation and Development (OECD) to boost global transparency and deter tax evasion tactics. Malaysia is one of 109 countries — including global offshore financial centres such as the British Virgin Islands, Liechtenstein and Luxembourg — that have agreed to implement this regulation. The standard has two components — the Model Competent Authority Agreement, which contains the detailed rules on the exchange of information, and the Common Reporting Standard (CRS), which contains the rules for reporting and due diligence. Financial institutions are required to hand over financial details under the CRS. The agreement, which is on a reciprocal basis, allows for the automatic exchange of information (AEOI) related to financial accounts held by financial institutions — such as depository institutions, custodial institutions, investment entities and specified insurance companies — with other jurisdictions annually. In tandem with the exchange of information exercise, which began in June 2017, the IRB announced the SVDP in November last year to give taxpayers the opportunity to report and pay tax on undeclared income derived in Malaysia. Low points out that the main advantage of the programme is that any taxpayer who makes a voluntary disclosure from Nov 3, 2018, to June 30, 2019, will be accorded a reduced penalty rate of 10% or 15%. Separately, the IRB has assured that information received during the exercise will be kept confidential in accordance with Section 138(2) of the Income Tax Act 1967, which states that no classified material shall be produced or used in court or otherwise, except for the purposes of the Act or another tax law. “Moreover, the IRB has publicly announced that it will accept the voluntary disclosures in good faith. In other words, no further review will be made on the information disclosed by the taxpayer, provided that the disclosure is in sync with the information obtained via the AEOI network,” says Low. “Let’s say you have been reporting your income for the past five years and your income is only RM10,000 a year, but you have S$10 million in your Singaporean bank account. This clearly does not make sense. So, you have to be able explain where the excess comes from. “If services are rendered in Malaysia, the remuneration associated with such services rendered in the country should be taxable in Malaysia. Just because a taxpayer uses a foreign entity to sign a contract and have the fees paid into a foreign account does not automatically mean that income is not sourced from Malaysia.” Under normal circumstances, when a tax audit is conducted and discrepancies are found, the ramifications include a penalty of up to 100% of the shortfall in tax (in cases where the returns are incorrect) or 300% of the shortfall in tax (in cases where the taxpayer fails to file tax returns). For cases in the latter category, there may be imprisonment upon conviction. “But under the SVDP, the penalty has been reduced to 10% (Nov 3 to March 31) and 15% (April 1 to June 30). After that, the minimum penalty will be 80%. The maximum allowed by the legislation is 100% for incorrect filing of tax returns or 300% if you do not file your tax returns. And do not forget, the IRB could pursue criminal prosecution if it suspects tax evasion,” says Low. The golden rule when it comes to keeping records of tax returns is seven years. According to the IRB, you can be audited for up to five years of assessment and there is no time limit on the audit if there is fraud or tax evasion. It is worth noting that capital gains are not taxed in Malaysia, except for gains derived from the disposal of real property or the sale of shares in a real property company. “Every year, you will have an opening and closing balance. So, you must be able to explain what is in between. You will have to do an honest declaration because if you expect the IRB to accept in good faith, you will also need to come forward in good faith. Good faith works both ways,” says Low. One of the biggest problems she foresees is poor record keeping. “Most individuals and businesses are not very good at keeping records. Those that have taken the position that the source of their funds is not subject to tax in Malaysia may not even keep any records. Hence, they need to consider how they should approach the SVDP,” she says. “Let’s say you have an account in the British Virgin Islands, the source of income may be from dividends sourced outside Malaysia. You just need to make sure that all your records are in order and that you have no problem explaining the source of the funds. “In the event that you suspect that you will have a problem explaining the source of the funds, then it is better to own up while the SVDP is ongoing. Otherwise, you may be audited and will still need to explain the source of the funds. Where taxpayers take the view that the funds in the financial accounts overseas are not taxable in Malaysia, they must be in a position to explain why this is so.” In a Nov 13 statement, the IRB said notices had been sent to 79,786 individuals, companies, organisations, cooperatives and other entities with property and extraordinary wealth that have yet to pay tax. According to IRB CEO Datuk Seri Sabin Samitah, these taxpayers will be sent an offer to voluntarily confess as well as a notice under Section 79 of the Income Tax Act 1967 to provide more information or clarification. They have 30 days to respond to the notice. If they do not, they can be fined a maximum of RM20,000, jailed up to six months, or both. Low says the IRB has assured that the voluntary disclosure process is simple and straightforward as one is required to write in a letter or submit an email with the necessary details. source:http://www./article/tax-planning-offshore-account-holders-should-come-clean-taxma （以下为谷歌自动翻译，非科林翻译。） 税务规划：离岸账户持有人应主动联系税务机关 有资产和收入保留在免税或低税收管辖区的马来西亚人可以通过回应内陆税收局（IRB）的特殊自愿披露计划（SVDP）避免受到严厉处罚，Stefanie Low Geok Ping说。 Deloitte Tax Services Sdn Bhd的营业税，税务审计和调查总监。 她解释说，在2017年批准和实施“税务事项自动交换金融账户信息标准”之前，由于该国实行地域税收制度，纳税人没有强制要求披露马来西亚境外的资产。但现在，该协议的签署者有能力利用财务信息进行审计。因此，拥有跨境账户的纳税人必须准备好回答他们的金融交易。 “以英属维尔京群岛为例，这是一个免税管辖区。如果您将[业务]利润存放在那里，则不需要缴税。但是，如果这些利润来自马来西亚的商业活动，则应将收入视为马来西亚的收入，并受马来西亚税法的约束。仅仅因为你将它支付给英属维尔京群岛的银行账户并不意味着不必在马来西亚支付税款，“Low说。 “为了避免被征税，有些人可能会有两套帐户，其中一套记录了马来西亚的部分收入，而其余的则被推到离岸实体。因此，您需要为马来西亚部分纳税，而不是海外部分。这被视为偷税漏税。 “这种做法多年来一直很普遍。许多人认为，通过将资金存入离岸账户，他们可以免受马来西亚税务机关的侵害。人们没想到这种自动交换信息的国际合作会发生。这是一项新规则，在100多个参与国家有效。所以，真的无处可藏。“ 经济合作与发展组织（经合组织）设立了自动交换金融账户信息，以提高全球透明度并遏制逃税策略。马来西亚是109个国家之一，包括英属维尔京群岛，列支敦士登和卢森堡等全球离岸金融中心，它们已同意实施该条例。 该标准有两个组成部分 - 模型主管当局协议，其中包含有关信息交换的详细规则，以及共同报告标准（CRS），其中包含报告和尽职调查的规则。金融机构必须在CRS下交出财务细节。 该协议是互惠的，允许每年与其他司法管辖区自动交换与金融机构（如存款机构，托管机构，投资实体和指定保险公司）持有的金融账户相关的信息（AEOI）。 在2017年6月开始的信息交流活动中，IRB于去年11月宣布SVDP为纳税人提供报告和支付马来西亚未申报收入税的机会。Low指出，该计划的主要优势在于，从2018年11月3日至2019年6月30日进行自愿披露的纳税人将享受10％或15％的减免罚款。 另外，IRB保证根据1967年“所得税法”第138（2）条对行动期间收到的信息保密，该法规定，不得在法庭或其他方面生产或使用分类材料，但该法案或其他税法的目的。 “此外，IRB已公开宣布将真诚地接受自愿披露。换句话说，如果披露信息与通过AEOI网络获得的信息同步，纳税人将不会对纳税人披露的信息进行进一步审查，“Low说。 “假设您过去五年一直在报告您的收入，而您的收入仅为每年1万令吉，但您的新加坡银行账户中有1000万新元。这显然没有意义。所以，你必须能够解释多余的来源。 “如果在马来西亚提供服务，与该国提供的此类服务相关的报酬应在马来西亚纳税。仅仅因为纳税人使用外国实体签订合同并将费用支付给外国账户并不意味着收入不是来自马来西亚。“ 在正常情况下，当进行税务审计并发现差异时，其后果包括最高100％的税收差额（如果收益不正确）或300％的税收差额（在案件中）纳税人未提交纳税申报表的地方）。对于后一类案件，一经定罪可判处监禁。 “但根据SVDP，罚款已降至10％（11月3日至3月31日）和15％（4月1日至6月30日）。之后，最低罚款将是80％。如果您没有提交纳税申报表，立法允许的最高限额为100％不正确的纳税申报表或300％。并且不要忘记，如果IRB怀疑逃税，IRB可以追究刑事诉讼，“Low说。 保存纳税申报表的黄金法则是七年。根据IRB，您可以接受最多五年的评估审计，如果存在欺诈或逃税，则审计没有时间限制。 值得注意的是，除了出售不动产或出售不动产公司股份所得的收益外，马来西亚不征收资本收益。 “每年，你都会有一个期初和期末余额。所以，你必须能够解释它们之间的内容。你必须做一个诚实的声明，因为如果你希望IRB真诚地接受，你也需要善意地挺身而出。诚信是双向的，“Low说。 她预见的最大问题之一是记录保存不佳。“大多数个人和企业都不擅长保存记录。那些认为其资金来源在马来西亚不征税的人甚至可能不会保留任何记录。因此，他们需要考虑如何接近SVDP，“她说。 “假设你在英属维尔京群岛拥有一个账户，收入来源可能来自马来西亚以外的股息。您只需要确保所有记录都有序，并且您没有解释资金来源的问题。 “如果您怀疑解释资金来源时遇到问题，那么最好在SVDP正在进行时拥有。否则，您可能会接受审计，仍需要解释资金来源。如果纳税人认为海外金融账户中的资金在马来西亚不征税，他们必须能够解释为什么会这样。“ 在11月13日的声明中，IRB表示已向79,786个个人，公司，组织，合作社和其他拥有尚未纳税的财产和特殊财富的实体发出通知。根据IRB首席执行官Datuk Seri Sabin Samitah的说法，这些纳税人将收到一份自愿承认的要约以及根据1967年“所得税法”第79条发出的通知，以提供更多信息或澄清。他们有30天的时间来回复通知。如果他们不这样做，他们可能被罚款最高RM20,000，被判入狱六个月，或两者兼而有之。 Low表示，IRB已确保自愿披露流程简单明了，因为要求您写信或提交包含必要详细信息的电子邮件。 |
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