Special Voluntary Disclosure Programme (SVDP)
11 Mar 2019
As announced by the Finance Minister during the tabling of the 2019 Budget last year, the government will launch the SVDP beginning 3 November 2018 to 30 June 2019. The SVDP offers a reduction in the penalty rate from 300% to 10% if the declaration is made in the first phase which runs from 3 November 2018 until 31 March 2019, and subsequently 15% if the declaration is made in the second phase beginning 1 April 2019 until 30 June 2019.
Malaysia, together with more than 100 countries, have signed an agreement to partake in the Automatic Exchange of Information (AEOI) initiative under the Organisation for Economic Co-operation and Development (OECD) on financial information, particularly bank account ownership and has begun receiving this information from September 2018. Therefore, the SVDP offers tax solutions to taxpayers who have bank accounts overseas from income generated from within Malaysia but the income has yet to be reported to IRB.
Letters and e-mails to taxpayers with bank accounts overseas are in the process of being issued by Inland Revenue Board (IRB). The government calls on taxpayers with overseas bank accounts who receive these notifications from IRB to immediately come forward to any IRB branch to provide clarification and subsequently partake in the SVDP if necessary. The government welcomes voluntary disclosures (if any) from taxpayers who do not have overseas bank account but still have income derived from Malaysia yet to be reported to IRB. Taxpayers in this category are still eligible for the reduced penalty rate of 10% or 15%, should they join the SVDP.
To those who have made voluntary disclosures through this programme for Year of Assessment 2017 and prior Years of Assessment, IRB will accept the declaration made in good faith and no audit or investigation will be carried out in the future for the period in which the declaration was made.