Navigating the Taxation Assessment Appeal Process in Malaysia: A Guide to Form Q and Form N

Navigating the Taxation Appeal Procedure in Malaysia: A Guide to Form Q and Form N

1. How to Appeal an Assessment / Additional Assessment ? 
   To appeal an assessment made by the IRBM, the taxpayer must submit a Form Q within 30 days after the notice of assessment has been served. Besides, the appeal shall be made against a best judgement assessment made under Section 90(3) of the Income Tax Act (ITA) and must be accompanied by a tax return for the relevant Year of Assessment (YA).

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2. What is the appeal procedure ?
   To submit an appeal, the taxpayer must follow the following steps:
   i. Submit four (4) copies of Form Q for each YA, with at least one (1) original and the other three (3) copies may be photocopied.
   ii. Complete the Form Q with the grounds of appeal and submit it to the IRBM branch handling the taxpayer’s income tax file.
   iii. Form Q cannot be signed by a tax agent or lawyer.
   iv. Incomplete Form Q will be returned to the taxpayer.

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3. What if Form Q has not been submitted within 30 days after the notice of assessment has been served?
   If the taxpayer fails to submit the Form Q within 30 days after the notice of assessment, they can apply for an extension of time by submitting Form N. The application must be justified with valid reasons such as hospitalisation for a long period of time, absence from the country, a natural disaster or other acceptable and valid reasons.

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4. How to apply an extension of time by submitting Form N?
   To apply for an extension of time, the taxpayer must follow the below steps:i. Submit a Form N to the Director General of IRBM (DGIR) within 7 years from 30 days after the notice of assessment was served.
   ii. Submit two copies of Form N for each YA, with at least one original and the other photocopied.
   iii. Form N must be sent to the IRBM branch handling the taxpayer’s income tax file.

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5. If the Inland Revenue Board of Malaysia (IRBM) approves an application for an extension of time (Form N), What is the next step?
   If the application for an extension of time is approved, the IRBM will issue Form CP15A to inform the taxpayer of the extended date for submitting Form Q (30 days from the date of CP15A).

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6. If the Inland Revenue Board of Malaysia (IRBM) reject an application for an extension of time (Form N), What is the next step?
   If the application for an extension of time is not approved, Form N and a statement of rejection by the DGIR (Form CP15B) will be forwarded to the Special Commissioners of Income Tax (SCIT). The DGIR will inform the taxpayer in writing and shall furnish a copy of the statement of reasons to the taxpayer. The taxpayer may make a written representation to the SCIT within 21 days of receiving the notification.

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7. If the extension of time is approved by the Special Commissioners of Income Tax (SCIT), What is the next step?
   If the SCIT agrees to allow an extension of time, they will notify both the taxpayer and the DGIR and state the date by which Form Q must be submitted.
8. If the extension of time is approved by the Special Commissioners of Income Tax (SCIT), What is the next step?
   If the SCIT rejects the application for an extension of time, both the taxpayer and the DGIR will be notified.

   The decision of SCIT granting an extension or refusing an application is final and both appellant and DGIR has no right to appeal against the decision.

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9. How long was the time taken by Inland Revenue board Malaysia (IRBM) to review the assessment?
   The period of time for reviewing the assessment is within twelve (12) months from the date of receiving the notice of appeal. The Minister of Finance may extend the period not exceeding six (6) months if the DGIR requires more time to review.

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10. What is the review of the assessment procedure?
    The DGIR may require the appellant to provide additional information or other documents related to the assessment for the purpose of reviewing the assessment. The appellant may also be required to attend or be represented for giving evidence (if necessary under oath). Based on the review, a proposal may be made to settle the appeal by confirming, reducing, increasing or discharging the assessment.
    If an agreement cannot be reached between the appellant and the DGIR during the review of the assessment procedure, the appeal will be forwarded to the SCIT for further resolution. The SCIT is the next level of appellate authority and has the power to hear and decide on appeals regarding direct tax disputes. The decision of the SCIT is binding on both the appellant and the DGIR.

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11. What are the other important assessment provisions?
    Provisions 90(3) :

    Where a person failed to furnish a return in accordance to s.77 or s.77A, Director General may according to the best of his judgement determine the amount of chargeable income of that person for that year and make an assessment accordingly.
    Provisions 91(1) :
    

    Time Bar Provision : Director General may in that year or within five (5) years after its expiration make an assessment or additional assessment

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