You want to disclose but only if you need to. Do you know for certain that you do not need to do so?
- related party transactions but no pricing policy for such transactions and no transfer pricing documentation;
- foreign transactions;
- no tax returns filed for sales and service taxes;
- your company or companies engaging in construction and property development; and
- your company’s or companies financial records are wanting because of the following
- cash transactions and missing source documents;
- agent commissions;
- constant transactions with a director’s account;
- no stock record system in place.
- cryptocurrency investments;
- cash transfers with different individuals;
- active trading of assets; and
- foreign investments.
If you answer is a yes to any of the abovementioned, you could be facing a tax audit soon.
Could be? How could you know for sure?
You could undergo a tax risk assessment conducted by an experienced tax adviser to find out for certain.
Our aim is to help you mitigate your tax risk.
Thus, our service is about mitigating your tax risk, and tax risk assessment is carried out as part of that endeavour.
However, we are not a package vending machine. Our service is divided into two parts in the following sequence:
Each part is charged separately, and you may choose between undergoing the entire process or just the tax risk assessment.
Before we could help mitigate your tax risk, we would need to establish the level of tax risk that you are facing. In order to do so, we would examine your company financial records, including tax returns, in order to check whether all of your company’s tax compliance have fully met the requirements set out by LHDNM and JKDM.
For example, if your company had engaged in transactions with related companies or individuals, we would check all records on those transactions in order to determine whether the transactions were properly documented and also whether they had strictly abided by the arm’s length principle.
Upon completing our checking, we would compile and share the results with you, outlining the extent of tax risk that your company is facing, and also in which area of tax compliance that your company is lacking in.
Currently, our tax risk assessment is priced at RM30,000. However, we are running a special promotion at this time. The first 10 clients to sign up for our tax risk management will get it for only RM20,000.
Be one of the first 10 now to saving on tax and our tax risk assessment service.
Once specific areas of tax risks are identified, you may proceed with mitigating tax non-compliance in specific areas. The report from our tax risk assessment (Stage 1) would also tell you whether your company’s tax risks are low or high.
If it is low, you may choose between proceeding with Stage 2 or mitigate the issues either by yourself or with the help of another vendor. We would recommend you proceed with Stage 2 if the tax risk identified in Stage 1 is high.
In Stage 2 or tax risk mitigation, we would get to work on the risk hotspots identified in Stage 1.
For example, if we have identified that your related party transactions have not been documented properly, and also have been priced not in accordance with the arm’s length princiole, then, as part of our tax risk mitigation effort, we would proceed with the following:
- we would help you draft transfer pricing (TP) documentation for those transactions; and
- calculate the amount of tax that your company still owes because of the transactions having been priced not in accordance with TP rules.
Having proper TP documentation lowers your company’s risk of being caught and penalised for not being able to produce them when requested to do so. Knowing the amount of tax owed helps to better prepare for disclosure to LHDNM.
Given that we cannot say what needs to be done under Stage 2 until Stage 1 is completed, the pricing for Stage 2 will be calculated once the areas of tax risk that you wish to mitigate has been narrowed down. We could then issue a quote based on your requirements. The best of part of this is that we can advise you what you should do but it is you who will decide what Stage 2 will do for you, and hence how much you will spend on Stage 2.
Tax risk mitigation is not a easy thing to do. You need a firm tax adviser with years of experience in helping many companies.
Well, Cheng & Co Taxation Service has a great track record. In 30 years, we have helped 10,000 SME companies of different kinds to manage their tax risks. Furthermore, as part of Cheng & Co Group of Companies, we are also a one-stop centre for professional solutions. It is not just tax. We have experts in accounting, company secretarial, and business finance as well to provide you with comprehensive solutions to your company’s problems.
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20+ years’ tax experience
Expert on Malaysian Taxation System.
Leading our team consulting clients on various assignments, including:
10+ years’ tax experience.
Associate member of CTIM and specialist in corporate tax compliances.
Provides taxation service to business in a variety of industries, including:
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Frequently Asked Questions
Do I really need the help of a tax adviser to disclose under SVDP 2.0?
There is no requirement for engaging a tax adviser to help you with SVDP 2.0.
If you already know precisely every instance of tax non-compliance, then you could go with LHDNM or JKDM in order to disclose them.
However, if you do not know them, then having a seasoned tax adviser not only would get things moving but also ensure that your tax risk assessment is done properly.
Having it done by anyone with no real tax experience could yield inaccurate results. Suppose that, in doing so, you believed that you have the final, correct figure of taxable income undeclared, and, so, you disclose that amount to LHDNM. However, after SVDP 2.0 ends, it turns out that the correct amount is actually more than the figure you derived. If you disclose that additional amount by then, you will have to pay the amount of tax owed, together with surcharge and penalty.
Therefore, having an experienced tax adviser, albeit requiring you to spend a little bit on service fees, would only serve to help you to assess your tax risks, mitigate your tax risks, and disclose unreported income or overclaimed tax reliefs correctly and punctually.
What does tax risk assessment has to do with tax planning?
The tax risk assessment service that we offer looks into the past, particularly on your company’s dealings that affect income and expenses. Tax planning is about strategising your upcoming business efforts towards achieving better tax compliance and becoming more tax efficient.
Thus, tax risk assessment is about assessing your tax risk, which, in our case, is to help you disclose all tax non-compliance. Tax planning is about helping your company to avoid the need to disclose by being a better, efficient taxpayer.
Does the figure RM30,000 seem logical for me to spend on just to know my company’s tax risk?
It may seem illogical if you have been fully compliant with tax laws in the past. With so many dealings in the past, how can you know for sure?
Furthermore, SVDP 2.0 has several caveats. One of these limitations is that you are not eligible for SVDP 2.0 is a tax audit or investigation has been launched against your company. So, if you decide against getting professional help and then a tax audit is launched, whatever non-compliance discovered by LHDNM will lead to tax amount payable, along with surcharges and penalties.
Lastly, many offences listed by LHDNM come with fines amounting to anywhere between RM200-RM20,000 each. Suppose that your company has not complied on 10 separate ocassions, and the penalty for each is RM20,000. Thus, you could be looking at paying at least RM200,000.
By paying RM30,000 to an experienced tax adviser would help you discover your tax risk more precisely and punctually, as opposed to it being done by someone inexperienced who will probably would not be able to work with LHDNM’s or JKDM’s pace.
What other tax services you provide besides tax risk assessment and TP documentation?
We also offer our services in tax planning, tax filing, and tax audit and investigation.
If my company is being audited or investigated by LHDNM or JKDM, could you still help me?
Of course, we can still help you. Although a tax audit or investigation would end your chances with SVDP 2.0, it does not mean that nothing can be done to help you.
Our tax audit and investigation is aimed at helping you through tax audits and investigations. We would not wait for a tax audit or investigation to be launch. If you have not yet been audited or investigated, we would assess your tax risk in order to how and where likely you will face a finding if a tax audit is conducted. This would help you to know how to comply better in the future, and, if you are still eligible for SVDP 2.0, you could disclose those issues to LHDNM or JKDM.
In the event a tax audit or investigation, we could act as your tax adviser and also your liaison with LHNDM and JKDM. Pursuant to the goal of helping you making the best out of a bad situation, we could help you appeal to LHDNM and JKDM for findings and penalties levied.
Please refer to our Tax Audit & Investigation Advisory for more information.