Real Property Gain Tax Penalty

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Real Property Gain Tax Penalty

The consequences of non-compliance with the RPGT Act 1976 are costly. Are you aware of that?

3 Types of Penalties

There are 3 types of penalties and increments for 3 different scenarios.

1. Subsection 30(2) (RPGT ACT 1976)

• Action: Disposer makes incorrect return or incorrect information on disposal of the asset.

• Consequence: Penalty amount equal to the amount of tax under-declared.

2. Subsection 29(3) (RPGT ACT 1976)

• Action: Disposer/acquirer fails to submit CKHT 1A or CKHT 1B within 60 days from the date of disposal of property or out of the extension period. OR

• Action: Disposer fails to declare the disposal of property

• Consequence: Penalty will be charged up to 3 times the tax charged (Subsection 29(3a))

3. Subsection 14(5) (RPGT ACT 1976)

• Action: The acquirer remitted the payment wrongly because the disposer made an incorrect return.

• Consequence: An additional surcharge of 10% on the amount of tax charged will be imposed on the disposer.

How to avoid such penalties?

1. Disposers are required to:

• Submit the form CKHT 1A or CKHT 1B within 60 days from the date of disposal.

• Submit tax exemption form and supporting documents (eg: water bills, rental agreement, etc).

• Submit form CKHT 3 together with CKHT 1A or CKHT 1B.

• Submit a copy version of CKHT 3 to acquirer.

2. Acquirers are required to:

• Submit form CKHT 2A within 60 days from the date of acquisition.

• Submit supporting documents such as sale and purchase agreement and CKHT 502 payment receipt/payment slip/completed form CKHT 3.

• Receive a copy of completed form CKHT 3 from disposer.

Reference:

Real Property Gains Tax Act 1976

https://www.lowpartners.com/real-property-gains-tax-act-1976/

Imposition Of Penalties And Increases Of Tax

https://www.hasil.gov.my/en/rpgt/imposition-of-penalties-and-increases-of-tax/

Responsibility Of Disposer And Acquirer

https://www.hasil.gov.my/en/rpgt/responsibility-of-disposer-and-acquirer/

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