Notify change of financial year end LHDN

Notify change of financial year end LHDN

Public Ruling 6/2021

Public Ruling 6/2021(PR6/2021): Notification of change in accounting period of a company, trust body, co-operative society issued on 29th December 2021, to replaces PR8/2019 on the same subject to reflect current legislation. There are no significant changes in the new PR.

The objective of this PR is to explain the requirement to notify the IRBM on change of accounting period by entity who liable to make payment on tax estimation.

Key takeaways:

You will understand: -

1. How to notify IRBM?

2. When to notify Inland Revenue Board (IRBM)?

3. What are the consequences of failure to notify IRBM?

Summary of learnings:

1. How to notify?

The IRBM has to be notified via Form CP204B.

2. When to notify IRBM?

It depends on whether the new accounting period is less than or more than the original accounting period:

i. the new accounting period is shortened

The IRBM has to be notified no later than 30 days before the end of the new accounting period.

Illustration A:

Original accounting period: 01.01.2021 – 31.12.2021

New accounting period: 01.01.2021 – 30.06.2021 (Shortened)

Notify IRBM: 30 days before 30.06.2021

ii. the new accounting period is extended

The IRBM has to be notified no later than 30 days before the end of the original accounting period.

Illustration B

Original accounting period: 01.01.2021 – 31.12.2021

New accounting period: 01.01.2021 – 30.06.2022 (Extended)

Notify IRBM: 30 days before 31.12.2021

3. What are the consequences of failure to notify IRBM?

The company fails to furnish the Form CP204B within the prescribed period, the following penalty will be imposed by the IRBM:

i. Subsection 107C (9): 10% increase when taxpayer’s failure to make the instalment payments

ii. Subsection 107C (10): 10% increase in respect of underestimation of tax payable (30% difference from actual tax payable).

iii. Subsection 112(3): Imposing penalty on estimated assessment raised under Section 90(3); and

iv. Paragraph 102(1)(i): Initiate prosecution action in respect of failure to notify the IRBM on change of accounting period.

Source:

Public Ruling: 6/2021 Notification of change of accounting period by a company / limited liability / partnership/ trust body/ co-operative society

https://phl.hasil.gov.my/pdf/pdfam/PR_06_2021.pdf

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