What is tax recovery action by LHDN?

What is tax recovery action by LHDN?
View Full Size

What is tax recovery action by LHDN?

Background story from a Facebook post

Last year, I was fined by LHDN for under-declaring the tax and I was fined RM30K with 2 years instalments. Because of the MCO this year, I did not pay the money on time. Originally, it was the 11th issue this month, but I was only going to the seventh issue.…

I suddenly received a letter from ''Kes Mahkamah'' the day before yesterday. I opened it and saw that it said that I would go to court on December 20 and I had to pay more than RM25k in one go. ….…

Can I really continue to pay in instalments? Can't it be the 11th issue if I return him on time now?

LHDN tax recovery action

LHDN can file a recovery action against the taxpayer if no payment is made after 30 days from the services of the Notice of Assessment (NOA).

Judgement in Default

A writ saman (writ of summons) and pernyataan tuntutan (statement of claim) will be served to the taxpayer. If the taxpayer does not enter appearance within 14 days, a judgement in default of appearance (JID) will be entered against the taxpayer. Once a JID is entered, LHDN can proceed to execute the JID against the taxpayer.

Summary of Judgement

If summary judgement is entered, LHDN will proceed to file bankruptcy proceedings against taxpayer to recover the taxes. Once summary judgement is entered, taxpayer must by lumpsum. Thus, negotiate for instalment scheme before summary judgement is entered.

A summary judgement means a judgment can be entered against taxpayer without having to go for a trial. The Court will not entertain any challenges on the correctness of the assessment. The challenges can only be done at the Special Commission of Income Tax.

Instalment scheme S103(7) ITA 1967

Where any tax is payable in accordance with subsection (2), the Director General may allow the tax to be paid by instalments in such amounts and on such dates …. in the event of default in payment of any one instalment on the date specified for payment the balance of the tax then outstanding shall be due and payable on that date and shall without any further notice being served … and that sum shall be recoverable as if it were tax due and payable under this Act.

Consent Judgement

A consent judgment will be recorded before the Court when both parties (taxpayer and LHDN) agree to the instalment plan.

A lapse in any one of payment, the Consent Judgement will be revoked and the tax will become due and payable immediately.

No bankruptcy/winding-up proceeding will be filed against the taxpayer as long as payment is made.

Visit Us

  • Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

  • Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Account, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.

#Ktp #Thks

 

 


 

THK Management Advisory Sdn Bhd

Wisma THK, No. 41, 41-01, 41-02, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru, Johor, Malaysia.
+6012-771 7903
+607-361 3443
 
Switch to Mobile Version
Subscribe Newsletter