Tax Audits and Investigations: Principles and the Practical Aspects

INTRODUCTION

This webinar will be guided by Revenue’s Audits & Investigation Framework and the core Objective is to assist participants learn the following:

1. Trigger Factors that Inland Revenue Board may rely on to select cases for Tax Audit or Investigation

2. Providing effective responses to the many queries Inland Revenue will raise

3. Foreign Source Income; Finance Acts 2021 and 2022

A major weakness that surfaces when taxpayers including companies, professionals, and businessmen are tax audited or investigated is that they do not know the impact of queries and computations done by Inland Revenue and how to respond to them. As such, they are unable to provide an appropriate reply and this could result in a less favourable conclusion and settlement of the case.

This programme will also cover the practical steps to be taken right from the commencement of business, as well as the records and documents that need to be maintained. In addition, the evidence to be submitted in support of the taxpayer’s arguments and defence will be examined.

This webinar helps participants understand how information furnished in Return Forms will be utilised by the Inland Revenue Board of Malaysia (IRBM) for enforcement purposes—simple data and details may not be that innocent after all.

Further, the programme will provide a detailed explanation on the Capital Statements required of directors and other individuals, as well as determining income deficits. Capital Statements (or Means Tests) are particularly difficult to complete.

COURSE OUTLINE

SESSION 1: Records and Accounts to be maintained

• Day-to-day records and documentation

• Bank statements and full reconciliation with accounts

• Profit & Loss Account, Balance Sheet, Supporting Notes

• Evidence of income and expenses— receipts, bills, vouchers, agreements

SESSION 2: Trigger Factors From Form B, Form C, Form P, and Form PT

• Analysis of financial and accounting position

• Data relationships, income tax computations

• Related Party Transactions and Documentation

• Partners, Directors, Shareholders; current accounts and shareholdings

SESSION 3: Basis of income recognition; performance and benchmark ratios

• Declaration verification – from records, bank statements, etc

• Examination of expenses – nature, quantum, relevance

• Documentary evidence to support expenditure

• Computation of income—shortfall, additional assessments and penalties

SESSION 4: Capital Statements and Estimate of Living Expenses

• How to identify and report assets and liabilities

• Foreign Source Income and Overseas Accounts

• Cost or market value; acquisitions and disposals of assets

• How revenue would compute income discrepancy or surplus

• How to make an Effective Well-Supported Appeal

PROFILE(s)

Vincent Josef began his career with the Inland Revenue Board in 1968 and over the next 35 years, he served in various Branches. Prior to his retirement, he was with the Operations Division of the Board Headquarters where he held the position of Assistant Director General. In addition, He has wide experience in lecturing at IRB events and Malaysian professional institutions including Chartered Tax Institute of Malaysia, Malaysian Institute of Accountants, CPA Australia, MAICSA and Commerce Clearing House (CCH) Malaysia. With his 50 years’ experience in the field of taxation, he also manages his own practice providing taxation consultancy services focusing on Tax Audits and Investigations. He has written a book “Tax Audit and Investigation Guide – Malaysia” published by CCH Malaysia and served as their Consultant Editor in respect of the Malaysian Master Tax Guide.