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Malaysian Income Tax Reporting System

2025-09-12
The Inland Revenue Board of Malaysia (“IRBM”) has introduced the Malaysian Income Tax Reporting System (“MITRS”) as part of its broader efforts to modernise the national tax administration framework. Starting from the Year of Assessment (“YA”) 2025, MITRS aims to improve tax compliance and simplify the process for submitting documents as required under Section 82B of the Income Tax Act 1967 (“ITA”).

This initiative reflects Malaysia’s commitment to greater transparency, accountability, and digital transformation in tax reporting, particularly for corporate taxpayers and limited liability partnerships (“LLPs”). Starting from 1 April 2025, corporate taxpayers and LLPs will be required to submit specific documentation electronically as required by IRBM under Section 82B of the ITA through the MITRS platform.

  1. Regulatory Framework and Objectives

    Section 82B of the ITA empowers the Director General of Inland Revenue to require taxpayers to furnish specific documents for the purpose of determining chargeable income and tax payable. MITRS will serve as the official system for these submissions, helping to ensure consistency, reduce discrepancies in tax filings, and facilitate more efficient enforcement of tax regulations.

    The introduction of MITRS is also aimed at improving the quality of data received by the IRBM, minimising administrative burdens, and supporting a more structured audit process through standardised document formats and procedures.

  2. Scope and Compliance Requirements

    The obligation to submit specific documents via the MITRS currently only applies to companies and LLPs which is obliged to file their Income Tax Return Form (“ITRF”) under Section 77 or 77A of the ITA. These entities must furnish the specific documents through the MITRS platform within thirty (30) days from the ITRF filing deadline. Failure to comply with this requirement may result in penalties and may also increase the risk of audit by the IRBM.

    The specific documents required to be submitted includes:
    • Audited financial statements or unaudited financial statement for the relevant year;
    • A complete income tax computation for the YA;
    • A detailed schedule of capital allowances which claims under Schedule 3 of the ITA;
    • Computations relating to any tax incentives claimed.

    All documents must be submitted electronically and only Bahasa Melayu or English is applicable. Any documents prepared in other languages must be accompanied by certified translations into one of the applicable languages.

  3. Professional Representation and the Role of Tax Agents

    To support taxpayers in fulfilling these new obligations, Section 153 of the ITA allows for the appointment of licensed tax agents to manage the MITRS submission process. Given the technical nature of the documentation required and the relatively short submission window, engaging a qualified professional may be prudent, especially for businesses with complex financial structures or multiple incentive claims.

  4. Preparing for the Transition

    The implementation of MITRS is more than a regulatory requirement, it offers a timely opportunity for businesses to strengthen their tax governance frameworks. Accurate and timely documentation is not only essential for tax compliance but also contributes to better internal decision-making and long-term risk management. Businesses that adopt a proactive approach to this transition will be better positioned to meet regulatory expectations and minimise potential complications in the future.

    Our team is well-prepared to support businesses through this transition. With deep expertise in Malaysian tax law and practical experience with digital reporting platforms, we offer comprehensive services ranging from document preparation to full representation under Section 82B of the Income Tax Act. We understand that each business has its own set of circumstances, and we are committed to delivering tailored, practical solutions that align with your specific needs.

For further information, please visit the official website of the Inland Revenue Board of Malaysia at https://www.hasil.gov.my/en.

KAIZEN Group, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

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