Boost your Tax Compliance Position with Special Voluntary Disclosure Program (SVDP) 2.0

SVDP 2.0 is here from 6 June 2023 until 31 May 2024! Learn how to take advantage of this opportunity to boost your tax compliance position.
November 2, 2023
Table of Content

Introduction to Special Voluntary Disclosure Programme 2.0 (SVDP 2.0)

Are you a business owner looking to optimise your tax situation? The Special Voluntary Disclosure Programme (SVDP) 2.0 might just be the solution for you! This informative article will guide you through how SVDP 2.0 can streamline your outstanding tax issues while ensuring maximum compliance with minimal penalties.

Get ready to demystify taxes and welcome peace of mind.

Key Takeaways

  • The Special Voluntary Disclosure Program (SVDP) 2.0 is a program initiated by the Inland Revenue Board of Malaysia ("IRBM") to promote tax compliance among taxpayers.
  • SVDP 2.0 encourages voluntary disclosure of previously undeclared income or corrections for overlooked tax discrepancies, without incurring penalties.
  • Eligible taxpayers include newly registered taxpayers, established taxpayers who haven't submitted income tax returns yet, those with additional unreported income, and duty payers who missed stamping documents within designated timelines.
  • Balancing technicality and practicality, proper documentation and supporting information are crucial for participating in SVDP 2.0, as they demonstrate compliance with guidelines and facilitate efficient review processes.

Understanding the Essence of SVDP 2.0

The Special Voluntary Disclosure Program (SVDP) 2.0, initiated by and the Inland Revenue Board of Malaysia ("IRBM"), provides an advantageous platform to enhance tax compliance among Malaysian taxpayers.

This program, which runs from June 6, 2023, to May 31, 2024, essentially promotes voluntary disclosures of previously undeclared income or corrections for any overlooked tax discrepancies.

At its core, SVDP 2.0 is anchored in the Awareness, Education, and Services ("AES") concept adopted by Lembaga Hasil Dalam Negeri Malaysia - fostering awareness via education and providing services that facilitate better taxation observance.

The initiative fosters transparency between duty payers and national tax administration while presenting an enticing opportunity for participants to settle outstanding taxes without attracting penalties - a key aspect particularly useful to businesses operating under varied categories except employers.

Through SVDP 2.0 both new and existing taxpayers can improve their compliance methodically while strategically managing their respective tax risks.

All You Need to Know about SVDP 2.0

The Special Voluntary Disclosure Program (SVDP) 2.0 is an initiative aimed at expanding taxpayer engagement, fostering tax compliance, and increasing national revenue.

It provides all tax payers (except the employer category) with a unique opportunity to rectify their tax standings without being burdened by penalties or excess charges - marking it as a potentially valuable avenue for business owners and individuals eager to enhance their fiscal responsibility.

The application process has been designed for simplicity and accessibility - guided by detailed operational guidelines that can be found in Operational Guidelines No 2 Year 2023. There are several categories of taxpayers eligible for SVDP 2.0:

  • Newly registered taxpayers
  • Established taxpayers who haven't submitted income tax returns yet
  • Those who have additional income not previously reported
  • Taxpayers who have incorrectly claimed expenses, reliefs, deductions, rebates, capital allowances, or incentives in their previous tax filing
  • Taxpayers who missed reporting on disposal of assets (e.g. properties or shares in real property companies) which may be subjected to Real Property Gains Tax ("RPGT")
  • Duty payers who missed stamping documents within designated timelines.

In line with evolving tech trends, SVDP 2.0 makes use of e-Filing and e-CKHT mechanisms alongside manual submissions tailored to each category's needs to streamline its procedures further. The procedural flowchart below serves as a high-level guide assisting applicants throughout this SVDP 2.0 journey towards better taxation practices.

Moreover, dedicated forms like SVDP 2.0 Additional Income Reporting Form and Voluntary Disclosure Form for Transfer Pricing Cases are accessible online – devised specifically so you can report every detail related to your financial undertakings accurately without any hassle.

All these initiatives coalesce into making SVDP 2.0 an efficient tool on your path towards becoming more accountable while doing due justice to your respective taxable contributions – staying well within laws' purview while also optimising fiscal resources responsibly.

Key Tax Perspectives of SVDP 2.0

SVDP 2.0 emphasizes compliance, balancing technicality and practicality, the importance of documentation and supporting information, as well as effective tax risks management. Discover how these perspectives can benefit your business.

Emphasising Compliance

Compliance is at the heart of SVDP 2.0, and for good reason. This programme by Lembaga Hasil Dalam Negeri Malaysia not only encourages taxpayers to meet their tax obligations accurately but also promotes a culture of honesty in reporting income.

It’s a direct response to growing concerns about tax evasion or avoidance, aimed squarely at fostering responsible financial practices among business owners. Underscoring this point further is the zero percent penalty rate offered under SVDP 2.0 - a compelling incentive designed to motivate voluntary disclosure and deter noncompliance.

As part of your participation in this initiative, remember that accurate documentation and supporting information are crucial: these will form an essential part of your submission on MyTax Portal whether you're filing as a new taxpayer or updating unreported income from previously submitted Income Tax Return Forms (ITRF) or Real Form of Real Property Gains Tax (RPGTRF).

Simply put, compliance isn't just obligatory; it's beneficial, helping you avoid penalties while contributing positively towards national revenue enhancement efforts guided by the AES concept practiced at IRBM.

Balancing Technicality and Practicality

In the Special Voluntary Disclosure Program (SVDP) 2.0, one important aspect is the need to balance technicality and practicality when it comes to tax compliance. While adhering to the legal requirements and regulations is crucial, it is equally important for businesses to navigate these complexities in a practical manner.

The program recognizes that businesses may face challenges in understanding and meeting their tax obligations, especially if they are not familiar with the intricacies of taxation laws.

By striking a balance between technicality and practicality, SVDP 2.0 aims to provide businesses with clear guidelines on how to comply with their tax obligations without getting overwhelmed by complex procedures.

It strives to simplify processes while still ensuring accuracy and reliability in reporting income and filing taxes.

This approach benefits business owners by making it easier for them to understand and fulfill their tax responsibilities efficiently. It also helps prevent inadvertent errors or omissions that could result in penalties or audits later on.

The SVDP 2.0 encourages voluntary disclosure of unreported income or other discrepancies by offering taxpayers an opportunity to rectify any mistakes without facing penalties or sanctions. This allows business owners to proactively address any issues they may have encountered during previous years' filings while maintaining good standing with the authorities.

Importance of Documentation and Supporting Information

Proper documentation and supporting information play a crucial role in participating in the Special Voluntary Disclosure Program 2.0 (SVDP 2.0) as a business owner. By ensuring accurate and comprehensive documentation, you can provide evidence of your tax computations, income reporting, and transfer pricing cases, if applicable.

This is essential to demonstrate your compliance with the SVDP 2.0 guidelines and avoid any potential disputes or penaltiesfrom the Inland Revenue Board of Malaysia (IRBM). Remember to keep all relevant records such as financial statements, invoices, contracts, and any other documents that support your voluntary disclosure.

By maintaining thorough documentation, you not only showcase your commitment to transparency but also make it easier for the IRBM to review your case efficiently during the SVDP 2.0 process.

Effective Tax Risks Management

Effective tax risks management is a crucial aspect of participating in the Special Voluntary Disclosure Program (SVDP) 2.0. As a business owner, it's important to understand and address potential tax risks proactively to ensure compliance with tax regulations.

By identifying and managing these risks effectively, you can mitigate any future penalties or legal issues.

One key area of tax risks management is emphasising compliance. It's essential to accurately report your income and tax computations in line with the guidelines provided by the Inland Revenue Board of Malaysia (IRBM).

This includes understanding the specific requirements for different categories such as companies, businesses, partnerships, or transfer pricing cases.

Balancing technicality and practicality is another critical factor when managing tax risks effectively. While it's important to adhere to technical aspects of taxation laws, it's equally vital to ensure practical implementation within your business operations.

Striking this balance helps you avoid any unintended non-compliance due to operational challenges or complexities.

Documentation and supporting information play a significant role in effective tax risk management. Keeping proper records is essential not only for preparing accurate tax computations but also for providing evidence should there be an audit or assessment from IRBM authorities.

Maintaining well-organized documentation helps demonstrate transparency and can contribute positively during the SVDP 2.0 process.

Lastly, consider implementing robust systems and processes that enable effective risk management throughout your organization. By adopting proactive measures like regular internal audits, reviewing transfer pricing arrangements if applicable, staying updated on relevant guidelines issued by IRBM through their official portal or briefing sessions - all these steps contribute towards efficient risk mitigation under SVDP 2.0.

Understanding the Benefits of SVDP 2.0

The Special Voluntary Disclosure Program (SVDP) 2.0 offers numerous benefits for business owners looking to improve their tax compliance and settle any outstanding taxes. Firstly, the program provides an opportunity to resolve tax issues without incurring penalties or interest charges.

This can significantly reduce financial burdens for businesses, allowing them to allocate resources towards other areas of growth and development.

Additionally, participating in SVDP 2.0 demonstrates a commitment to transparency and ethical business practices. By voluntarily disclosing any unreported income or tax discrepancies, businesses can build trust with the authorities and ensure compliance moving forward.

Furthermore, SVDP 2.0 supports sustainability in national tax administration by expanding the number of taxpayers and increasing revenue collection. By encouraging both new and existing taxpayers to participate in this program, the government aims to bridge any gaps in tax compliance and strengthen the overall economy.

Participating in SVDP 2.0 is a proactive step towards better financial management for businesses as well. Through this program, business owners have access to professional opinions on their tax obligations and indirect taxes which can help them gain valuable insights into their financial practices.

Overall, SVDP 2.0 presents a unique opportunity for business owners to rectify past mistakes while enjoying various benefits such as penalty waiver, improved credibility with authorities, enhanced financial management practices, and contributing towards sustainable national tax administration.

How to Participate in SVDP 2.0

To participate in SVDP 2.0, follow these simple steps:

  1. Visit the official IRBM website and navigate to the SVDP 2.0 section.
  2. Download the relevant Income Tax Return Form (ITRF) or Real Property Gains Tax Form (RPGTRF) based on your tax obligations.
  3. Ensure you have all the necessary supporting documents and information ready, such as financial statements, receipts, invoices, and any other relevant documentation.
  4. Use MyTax Portal or e-Filing to submit your completed ITRF or RPGTRF electronically. If you prefer manual submission, visit your nearest IRB service counter to submit your forms physically.
  5. Fill out the form accurately and provide all required details, including your Tax Identification Number (TIN) and tax computations.
  6. For additional income reporting beyond regular business activities, use the SVDP 2.0 Additional Income Reporting Form and follow the provided filing guide.
  7. If you have transfer pricing cases to disclose voluntarily, use the Voluntary Disclosure Form for Transfer Pricing Case and refer to the filing guide for proper submission.
  8. In case of stamp duty non - compliance, utilize the Stamp Assessment And Payment System (STAMPS) to submit your documents for stamping within the SVDP 2.0 period.
  9. If needed, consult the Operational Guidelines for detailed instructions on specific scenarios or check Frequently Asked Questions (FAQ) for further clarification.
  10. Consider participating in briefing sessions organized by IRBM or reach out to if you require more information or assistance.

Conclusion on SVDP 2.0

In conclusion, the Special Voluntary Disclosure Program (SVDP) 2.0 is a significant initiative by the Royal Malaysian Customs Department and the Inland Revenue Board of Malaysia to enhance tax compliance and increase national revenue.

With its zero percent penalty rate, SVDP 2.0 offers taxpayers an opportunity to voluntarily settle their outstanding taxes without facing any penalties. Whether you're a new taxpayer or an existing one with unreported income, participating in SVDP 2.0 can bring numerous benefits while ensuring you meet your tax obligations effectively.

Don't miss out on this opportunity to rectify any past non-compliance and contribute to Malaysia's progress as Malaysia Madani.".

General disclaimer
The information provided in this article is for general reference only and shall not be construed as legal or professional advise. Please seek further consultation from Centry or your preferred professionals for your specific scenario and business case.

Your digital accountant & company secretary

Centry helps Malaysian Startups and SME alleviate the painful back-office & compliance work so that you can focus on growth.
Explore our digitalised services:
Centry Client Success Team
Centry Client Success Team
Hi there 👋🏼 How can we help you today?