Updated guidelines on the application for a tax clearance letter

Updated guidelines on the application for a tax clearance letter for a company, limited liability partnership (LLP) and Labuan entities

The IRB recently published on its website Operational Guidelines No. 3/2021 in Bahasa Malaysia, titled ’Permohonan Surat Penyelesaian Cukai Bagi Syarikat, Perkongsian Liabiliti Terhad Dan Entiti Labuan’ (Operational Guidelines). The Operational Guidelines are dated 30 June 2021 and replace Operational Guidelines No. 2/2019 dated 12 November 2019 (see Tax Alert No. 21/2019).

Similar to the earlier guidelines, the new Operational Guidelines explain the procedures for the application of tax clearance letters (TCLs) and provide guidance on the documents which need to be submitted together with the application, for companies, limited liability partnerships (LLPs) and Labuan entities.

The key changes are outlined below:

• The new Operational Guidelines stipulate that in line with the IRB Client Charter, TCLs will be issued within 14 working days from the date the relevant application forms (together with complete documents and information) are received, subject to conditions. A flowchart has also been included in the new Operational Guidelines to demonstrate the process that will take place in the 14-day period.

• The new Operational Guidelines have been updated to reflect the legislative change to Section 77A(1A) of the ITA with effect from YA 2021, where the Form PT for LLPs is to be furnished to the IRB in an electronic medium or by way of electronic transmission only.

• The new Operational Guidelines stipulate that TCLs will only be issued after the completion of audits. This was not stipulated in the earlier guidelines.

• The application forms as well as the documents which will need to be submitted together in the application for a TCL (outlined in the Appendices of the new Operational Guidelines) have been updated.