Any income obtained from sources within Malaysia and kept in a foreign bank account is liable to be taxed. Individuals who have not made the required tax declarations in this situation are encouraged to make use of the Special Voluntary Disclosure Programme (SVDP) to declare any unreported income they have in foreign bank accounts.
The SVDP is a tax amnesty programme that offers reduced penalty rates to any taxpayers who come forward to disclose any previously undeclared. Those who declare their income and make full tax payment by 31 March 2019 will only be charged a 10% penalty; those who pay up between 1 April to 30 June will be faced with a 15% penalty. After the SVDP ends on 30 June, the penalty for overdue tax payment will continuously increase between 80% to 300%.
"SVDP offers a taxation solution for those with foreign bank accounts but whose income has not been reported to LHDN," said Finance Minister Lim Guan Eng. Individuals who have already declared their income to Lembaga Hasil Dalam Negeri ( LHDN) and later channelled it overseas are not included in this category.
"Opening a foreign bank account is standardised internationally, with further details about registration and taxation information required to be submitted to the foreign country’s authorities," said Guan Eng. He further explained that LHDN had begun to receive financial information under the Automatic Exchange of Information (AEOI) initiative with the Organisation for Economic Cooperation and Development (OECD) since September last year, particularly regarding ownership of overseas bank accounts.
Guan Eng also addressed the confusion surrounding the letters and emails sent out by LHDN regarding SVDP, which prompted many enquiries from those who had received them. According to him, it is the individuals with foreign bank accounts who have not reported their income who need to contact LHDN as requested in the letter. Those who do not fall into this category need not worry if they receive the notification from LHDN. He added that LHDN will be sending out new letters and emails to replace the previous circular to prevent any misunderstanding.
(Image: Utusan Online)
On 1 February, LHDN CEO Datuk Seri Sabin Samitah had said that the 8.3 million letters and emails sent out regarding the SVDP were only meant for those earning RM4,000 and above per month who had not yet disclosed their income last year and that anyone else who received them could disregard them.
To obtain more information about SVDP and your taxpayer status, you can visit a LHDN branch near you, drop an email at [email protected], or call 1-800-88-5436 (local) or +603 77136666.
(Source: New Straits Times)