HOTEL ISTANA, KUALA LUMPUR filehotel istana, kuala lumpur. 2 presentation outline 1. sales tax &...
Transcript of HOTEL ISTANA, KUALA LUMPUR filehotel istana, kuala lumpur. 2 presentation outline 1. sales tax &...
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ENFORCEMENT, PENALITIES AND OFFENCES GOVERNING SST (2018) IN MALAYSIA
PRESENTED BY D.MARTIN JOSEPH
NATIONAL SEMINAR ON SST IMPLEMENTATION20TH SEPTEMBER 2018
HOTEL ISTANA, KUALA LUMPUR
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PRESENTATION OUTLINE
1. SALES TAX & SERVICE TAX LEGISLATION 2018
2. RESPONSIBILITIES & LIABILITIES OF SST REGISTRANTS 2018
3. SALES TAX OFFENCES & PENALTIES 2018
4. SERVICE TAX OFFENCES & LIABILITIES 2018
5. GENERAL PENALITIES & COMPOUNDING OF OFFENCES,REVIEW & APPEAL
6. ENFORCEMENT OF SALES TAX & SERVICE TAX 2018
7. ANTI PROFITEERING LEGISLATION
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SALES TAX LEGISLATION1. Sales Tax Act 2018
2. Regulation2.1 Sales Tax Regulation 20182.2 Sales Tax (Determination of Sales Value of Taxable Goods) Regulation 2018 (valuation)2.3 Sales Tax (Compounding of Offences) Regulation 2018 (List of Offences)2.4 Sales Tax (Customs Ruling) Regulation 2018
3. Orders3.1 Appointment of Date of Coming into Operation3.2 Sales Tax (Exemption from Registration) Order 2018 (20 items)3.3 Sales Tax (Exemption from Tax) Order 2018 (Nil ST)3.4 Sales Tax (Imposition of Tax in Respect of Designated Area) Order 2018 (Labuan & Tioman)3.5 Sales Tax (Imposition of Tax in Respect of Special Area) Order 2018 (Free Zones)3.6 Sales Tax (Persons Exempted from Payment of Tax) Order 2018 (Sch. A, B, C)3.7 Sales Tax (Rate of Tax) Order 2018 (Sch. 1 & 2)3.8 Sales Tax (Total Value of Taxable Goods) Order 2018 (threshold)
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1. Service Tax Act 2018
2. Regulation
2.1 Service Tax Regulation 20182.2 Service Tax (Compounding of Offences) Regulation 2018 (List of Offences)2.3 Service Tax (Customs Ruling) Regulation 2018
3. Orders3.1 Appointment of Effective Date for Charging & Levying of Service Tax 3.2 Service Tax Appointment of Coming into Operation (the Act)3.3 Service Tax (Imposition of Tax for Taxable Service in Respect of Designated & Special Areas) Order 20183.4 Service Tax (Rate of Tax) Order 2018
SERVICE TAX LEGISLATION
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RESPONSIBILITIES AND LIABILITIES OF AN SALES TAX REGISTRANT
1. Imposition of Sales Tax (s.8) [ taxable goods sold, disposed off or used &taxable goods imported]
2. Determination of value (s.9) [ valuation of manufactured & imported goods]
3. Rate of Tax (s.10) [10%, 5% or specific]
4. Sales Tax due (s.11) [ sold, disposed of otherwise than by sale or first used otherwise than in mfg.]
5. Application for registration (s.13) [ liable to be registered 1st day of following month]
6. Notification of cessation of liability (s.18) [notify DG within 30days of cessation]
7. Invoices (s.21) [ Bahasa or English, prescribed particulars]
8. Duty to keep records (s.24) [all records relating to sales tax, Bahasa or English, 7 years]
9. Furnishing of returns (s.26) [according to taxable period & payment of sales tax]
10. Evasion of sales tax (s.86) [ incorrect info, false statement , omits info to fraud in return]
11. Giving incorrect information (s.87) [relating to liability to sales tax]
12. Improperly obtaining refund (s.88) [obtaining refund thru fraud]
13. Obstruction (s.92) [obstructs, assaults or hinders officer ]
14. Offence by companies (s.93) [directors, partners , compliance officer, secretary & manager of company]
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RESPONSIBILITIES AND LIABILITIES OF AN SERVICE TAX REGISTRANT
1. Imposition of Service Tax (s.7) [prescribed taxable service by registrant]
2. Taxable service (s.8) [prescribe by minister]
3. Determination of value of taxable service (s.9) [ connected, not connected, free, betting & gamming, insurance]
4. Rate of service tax (s.10) [6% & specific]
5. Service tax due (s.11) [when payment received by registrant]
6. Liability to be registered (s.12) [ threshold reached, historical or future method whichever is the earlier]
7. Application for registration (s.13) [not later than the last day of the month following the month he is liable]
8. Notification of cessation of liability (s.19) [notification to DG within 30 days of cessation]
9. Invoices (s.21) [prescribed particulars, national language & English]
10. Duty to keep records (s.24) [all records relating to tax , National Language or English , 7 years]
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RESPONSIBILITIES AND LIABILITIES OF AN SERVICE TAX REGISTRANT
11. Furnishing of returns and payment of tax (s.26) [last day of the month following taxable period with payment]
12. Liability of directors (s.33) [directors, partners , compliance officer, secretary & manager of company, office bearers
of society severely liable]
13. Persons bound to give information (s.57) [bound to give information anything relating to tax]
14. Access to places or premises (s.58) [ provide facilities, provide , all documents , goods, articles , take copies of
documents]
15. Evasion of tax (s.71) [ incorrect info, false statement , omits info to fraud in return]
16. Giving incorrect information (s.72) [incorrect info relating to his liability to tax]
17. Improperly obtaining refunds (s.73) [obtaining refund thru fraud]
18. Obstruction (s.77) [obstructs, assaults or hinders officer ]
19. Offence by companies (s.78) [directors, partners , compliance officer, secretary & manager of company]
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OFFENCES PENALTIES
LIABILITY TO BE REGISTERED S.12
- Any manufacturer who is liable to be registered
shall apply not later than the last day of the month
following the month he is liable to be registered)
Any manufacturer who fails to register
commits an offence S13(5)
• Fine : Not exceeding RM 30,000;(S.94)
• Imprisonment : Not exceeding 2 years
• Or both
NOTIFICATION OF CESSATION OF LIABILITY S. 18
- A manufacturer who ceases manufacturing taxable
goods or who ceases to be liable to be registered, shall
notify DG within 30 days from the date of cessation.
Any person who contravenes commits an
offence S18(2)
• Fine : Not exceeding RM 30,000;(S.94)
• Imprisonment : Not exceeding 2 years
• Or both
INVOICES S.21(1)- (1) Every registered manufacturer who sells any taxable
goods shall issue an invoice.- (2) No invoice showing sales tax if not taxable goods or if
not a registered manufacturer- (3) Amount of ST shall be collected for the taxable goods
Any person who contravenes subsection (1),
(2) or (3) commits an offence
• Fine : Not exceeding RM 30,000;(S.94)
• Imprisonment : Not exceeding 2 years
• Or both
SALES TAX ACT 2018
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OFFENCES PENALTIES
DUTY TO KEEP RECORDS S.24
- Every taxable person shall keep complete & true records
up to date of all transactions
- Kept for 7 years; in BM or English in Malaysia
- Records readily accessible; admissible in court
Any manufacturer who contravenes commits
an offence & shall be liable to a fine not
exceeding Fifty thousand ringgit or
imprisonment Not exceeding 3 years or to
both S24(6)
FURNISHING OF RETURNS & PAYMENT OF SALES
TAX DUE AND PAYABLE S.26
- A registered person is required to furnish a return and
shall pay to the DG the amount of Sales Tax due and
payable.
A taxable person who contravenes section
26; OR furnishes an incorrect return commits
an offence & shall be liable to a fine not
exceeding Fifty thousand ringgit or
imprisonment Not exceeding 3 years or to
both
LATE PAYMENT PENALTY s.26(9)- Where any Sales Tax due & payable is not paid wholly or partly, the taxable person shall pay late penalty charges
First 30 days – Penalty of 10 %
Second 30 days – Penalty of 15 %
Third 30 days – Penalty of 15 %
(of the amount unpaid)
SALES TAX 2018
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EVASION OF SALES TAX (S.86)
Any person who, with intent to evade or to assist any other
person to evade Sales Tax –
Omits from a return any information;
Makes any false statement or entry in any return, claim or application;
Gives any false answer to any Question or information under this Act;
Prepares or maintains any false book of accounts; invoices or falsifies any records; or
Makes use of any fraud, artifice (deception) or contrivance
Any person who commits the above offence shall, on conviction be liable –
o First offence - Fine not less than 10 x & not more than 20 x of amount of Sales Tax
OR Imprisonment Not exceeding 5 years or to both
o Second or subsequent offence – Fine not < than 20 x & not > than 40 x of amount of
Sales Tax OR Imprisonment Not exceeding 7 years or to both
o If amount of Sales Tax cannot be ascertained – Fine of not < than RM50,000.00 & not
> than RM500,000.00 or to imprisonment Not exceeding 7 years or to both.
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OFFENCES PENALTIES
LIABILITY TO BE REGISTERED S.12
- Any person who is liable to be registered shall apply not
later than the last day of the month following the month
he is liable to be registered)
Any person who fails to register commits an
offence S13(5)
• Fine : Not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both (S.79)
NOTIFICATION OF CESSATION OF LIABILITY S.19
- A person registered person who ceases to carry on
business providing taxable goods or who ceases to be liable
to be registered, shall notify DG within 30 days from the
date of cessation.
Any person who contravenes commits an
offence S19(2)
• Fine : Not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both (S.79)
INVOICES S.21(1)- (1) Every registered person who provides any taxable services
shall issue an invoice.- (2) No invoice showing Service Tax if not taxable service or if
not a registered person- (3) Amount of ST payable shall be collected in respect of the
taxable services.
Any person who contravenes subsection (1),
(2) or (3) commits an offence
• Fine : Not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both(S.79)
SERVICE TAX OFFENCES & PENALITIES
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OFFENCE PENALTIES
GIVING INCORRECT INFORMATION
RELATING TO LIABILITY OF SERVICE TAX
S.72
• Fine : not exceeding RM30,000;
• Imprisonment : not exceeding 2 years
• Or both (s.79)
IMPROPERLY OBTAINING REFUND S.73 • Fine : Not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both (s.79)
OFFENCES BY AUTHORIZED &
UNAUTHORIZED PERSONS S.76
(defrauds, embezzles, uses position to deal
wrongfully)
• Fine : not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both (s.79)
OBSTRUCTION S.77 • Fine : Not exceeding RM100,000;
• Imprisonment : Not exceeding 5 years
• Or both (s.77)
GENERAL PENALTY S.79
(Any offence under this Act for which no penalty is
expressly provided)
• Fine : Not exceeding RM 30,000;
• Imprisonment : Not exceeding 2 years
• Or both
SERVICE TAX OFFENCES & PENALITIES
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OFFENCES PENALTIES
DUTY TO KEEP RECORDS S.24
- Every taxable person shall keep complete & true
records up to date of all transactions
- Kept for 7 years; in BM or English in Malaysia
- Records readily accessible; admissible in court
Any taxable person who contravenes
commits an offence & shall be liable to a fine
Not exceeding Fifty thousand ringgit OR
Imprisonment Not exceeding 3 years or to
both; S24(6)
FURNISHING OF RETURNS & PAYMENT OF
SALES TAX DUE AND PAYABLE S.26
- A registered person is required to furnish a return and
shall pay to the DG the amount of Service Tax due and
payable.
A taxable person who contravenes section
26 OR furnishes an incorrect return
commits an offence & shall be liable to a
fine not exceeding Fifty thousand ringgit or
imprisonment Not exceeding 3 years or to
both S.26(6)
LATE PAYMENT PENALTY s.26(8)- Where any Sales Tax due & payable is not paid wholly or partly, the taxable person shall pay late penalty charges
First 30 days – Penalty of 10 %
Second 30 days – Penalty of 15 %
Third 30 days – Penalty of 15 %
(of the amount of service tax unpaid) S.26(8)
SERVICE TAX OFFENCES & PENALITIES
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EVASION OF SERVICE TAX (S.71)
Any person who, with intent to evade or to assist any other
person to evade Service Tax –
Omits from a return any information;
Makes a false statement or entry in any return, claim or application;
Gives any false answer to any Question or information under this Act;
Prepares or maintains any false book of accounts; invoices or falsifies any records; or
Makes use of any fraud, artifice or contrivance
Any person who commits the above offence shall, on conviction be liable –
o First offence - Fine not less than 10 x & not more than 20 x of amount of Sales Tax
OR Imprisonment Not exceeding 5 years or to both
o Second or subsequent offence – Fine not < than 20 x & not > than 40 x of amount of
Sales Tax OR Imprisonment Not exceeding 7 years or to both
o If amount of Sales Tax cannot be ascertained – Fine of not < than RM50,000.00 & not
> than RM500,000.00 or to imprisonment Not exceeding 7 years or to both. S.71(2)
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GENERAL PENALTIES, COMPOUNDING OF OFFENCES, REVIEW & APPEAL
SALES TAX SERVICE TAX
• GENERAL PENALITIES S.94
• FINE NOT EXCEEDING RM30K OR 2 YEARS JAIL OR BOTH
• COMPOUNDING OF OFFENCES S.95(2)
• NOT EXCEEDING 50% OF THE MAXIMUM FINE PROVIDED
• Sales Tax (Compounding of Offences) Regulation 2018
• Review & Appeal S. 96• Appeal to DG within 30 days of
notification (except compound)
• GENERAL PENALITIES S.79
• FINE NOT EXCEEDING RM30K OR 2 YEARS JAIL OR BOTH
• COMPOUNDING OF OFFENCES S.80
• NOT EXCEEDING 50% OF THE MAXIMUM FINE PROVIDED
• Service Tax (Compounding of Offences) Regulation 2018
• Review & Appeal S.81 • Appeal to DG within 30 days of
notification (except compound)
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ENFORCEMENT POWERS UNDER SST 2018
1. Power to assess (s.27)
2. Recovery of tax as civil debt (s.28)
3. Power to collect tax from persons owing (s.29)
4. Persons bound to give information (s.62)
5. Power to take samples (s.63)
6. Access to places or premises (s.64)
7. Access to recorded information (s.65)
8. Search with warrant (s.66)
9. Search without warrant (s.67)
10. Power to stop & search conveyance(s.68)
11. Seizure of goods (s.69)
12. Power of arrest (s.72)
1. Power to assess (s.27)
2. Recovery of tax as civil debt (s.28)
3. Power to collect tax from persons owing (s.29)
4. Persons bound to give information (s.57)
5. Access to places or premises (s.58)
6. Access to recorded information (s.59)
7. Search with warrant (s.60)
8. Search without warrant (s.61)
9. Seizure of goods (s.62
10. Power of arrest (s.63)
SALES TAX SERVICE TAX
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POWER TO ASSESS S.27 SALES TAX
WHERE ANY TAXABLE PERSON –
(a) Fails to apply for registration under section 13;
(b) Fails to furnish a return under section 26; or
(c) Furnishes a return which appears to the DG to be
incomplete or incorrect
THE DG MAY ASSESS –
To the best of his judgement;
Amount of Sales Tax due and payable
The penalty payable under section 26(9)
Notify him in writing
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LIABILITY OF DIRECTORS S.34 SALES TAX
Where Sales Tax due & payable, surcharge is accrued, or penalty,
fee or other money is payable by any Co, LLP, Firm , Society or
other body of persons -
The Directors of the Company;
Partners of the firm;
Office-bearers of the society;
Compliance officer of LLP; etc
Shall together with the Co, LLP, Firm, Society or other body of
persons be jointly & severally be liable for Sales Tax due &
payable, surcharge, or penalty, fee or other money.
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ACCESS TO PREMISES OR PLACES S.58 SERVICE TAX
Any senior officer of service tax shall at all times have access to any place
or premise –
Persons to provide reasonable facilities (failure to provide is an offence under s.58(5)
Produce any goods, documents, articles or things which relates to the Act;
Examine any goods , documents, articles or things & take copies;
Seize & detain any goods, documents, articles or things as evidence
Require any person present therein to answer any questions relating to goods etc.
Require any container, envelope, or other receptacle therein to be opened or
At the risk & expense of the person therein open & examine any package or goods
If necessary use force to enter premise & open receptacle as he thinks fit
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SEARCH MAY BE MADE WITHOUT WARRANT S.61 SERVICE TAX
Senior officer with reasonable cause to believe that items are concealed in any place,
premise or conveyance any goods, documents, articles or things which may afford
evidence of offence;
Reasonable grounds to believe that by reason of delay in obtaining a warrant the goods etc.
are likely to be removed;
He may enter the place
Arrest any person
Break open outer or inner door
Remove by force any obstruction
Detain every person therein
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LEGISLATION – ANTI PROFITEERING
The objective of the anti-profiteering laws –
NOT to prevent businesses from making any profit.
To Protect Consumers by from unethical traders & businesses
from making unreasonable high profit or profiteering
To ensure the Rights of consumers are not jeopardised
Price Control & Anti Profiteering Act 2011
Price Control & Anti Profiteering (Amendment) Act 2014
Price Control & Anti Profiteering (Mechanism to Determine
Unreasonably High Profit of Goods) Regulations 2018
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The Price Control and Anti-Profiteering (Mechanism to Determine
Unreasonably High Profit) Regulations 2018 effective 6 June 2018
all businesses in supply of goods & services are governed by the 2018
Regulations
IMPLICATIONS FOR BUSINESSES
Businesses should undertake review of its pricing policies
Consumer awareness – Price comparison & initiate complaints
Businesses must ensure compliance & be able to substantiate the price
increase (adequate documentation & justification) to MDTCA (KPDNKK)
ANTI PROFITEERING LEGISLATION
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PRICE CONTROL & ANTI – PROFITEERING ACT 2011
OFFENCE TO PROFITEER S.14 Any person who, in the course of trade or business, profiteers in selling or offering to sell
or supplying or offering to supply any goods or services commits an offence
“Profiteer” means making profit unreasonably high
OFFENDERS FIRST OFFENCE SECOND OFFENCE
Individual Fine – Not more than RM100,000
Imprisonment – Not > than 3
years
Or both
Fine – Not more than RM100,000
Imprisonment – Not > than 3
years
Or both
Body Corporate Fine – Not more than
RM500,000
Fine – Not more than
RM1,000,000
PENALTY