WHAT CONSTITUTES “RECORDS” & “SUFFICIENT RECORDS”?

  1. Books of accounts (i.e. cash book, sales ledger, purchase ledger & general ledger).
  2. Books of accounts must be written up at regular intervals.
  3. Each transaction must be recorded not later than 60 days after the transaction.
  4. Supporting documents (i.e. invoices, bank statement, pay-in-slips, cheque butts, receipts of payments, payroll records, & copies of receipts) must be retained.
  5. Receipts issued should be serially numbered.
  6. Valuation of the stock in trade must be made at the end of the accounting period.

 

WHERE TO KEPT THE RECORDS?

  1. All records and books of accounts must be kept at the registered office or business premises of the taxpayer in Malaysia.
  2. If the records and books of accounts for operations outside Malaysia are kept outside Malaysia, the documents must be produced at the registered office or business premises when requested by the Director-General

 

HOW LONG TO KEEP THE RECORDS?

  • All records are to be retained for at least 7 years from the end of the year to which any income from the business or operation relates.
  • If the return for a year of assessment (Y/A) is not furnished within the time specified under the Act, the relevant records are to be retained for a period of 7 years from the end of the year in which the return is furnished.
  • Where there is an appeal against an assessment, the relevant records are to be retained until the appeal is finally determined.

 

WHAT LANGUAGE OF RECORDS TO BE KEPT?

  • All records and books of accounts must be written in the national language or the English language.
  • If the records and books of accounts are written in a language other than the national language or English, a written translation is to be provided, when requested by the Director General (DG).

 

WHAT CONSEQUENCES IF SUFFICIENT RECORDS ARE NOT KEPT?

  • The chargeable income of the taxpayer may be determined according to the best judgement of the Director General (DG) & an assessment made accordingly.
  • The individual carrying on business (i.e. sole proprietorship or a partnership) may be required by the DG, at the expenses of that individual, to have his accounts audited by a professional accountant.
  • The taxpayer and company directors may be prosecuted & on conviction, may be liable to a fine or to imprisonment, or to both.