Introduction

The Malaysian Income Tax Reporting System (MITRS) is a pivotal digital initiative introduced by the Inland Revenue Board of Malaysia (LHDN) to simplify tax compliance and modernize document submission processes. This platform aligns with Section 82B of the Income Tax Act 1967 (ITA), ensuring greater efficiency and accuracy for taxpayers, particularly companies and Limited Liability Partnerships (LLPs). Below is an in-depth analysis of the system, its implementation, and its implications, viewed through the lens of a tax professional and corporate secretary.

Understanding Section 82B and Its Integration with MITRS

Effective from the Year of Assessment 2025, taxpayers filing a Return Form under Section 77 or 77A of the ITA 1967 must submit specified documents electronically via MITRS within 30 days of the Return Form’s deadline. These documents are essential for accurately determining chargeable income and tax payable.

Phased Implementation:

MITRS began its initial rollout on 1 September 2020, focusing on companies under audit or investigation. Effective 1 April 2025, the system’s scope will expand to include all taxpayers under the company (C) and LLP (PT) categories. The first batch of taxpayers impacted will be those with January financial year-end where their YA2025 MITRS will be due in September 2025.

This phased approach enables organizations to adapt progressively while enhancing the efficiency of tax administration.

MITRS: Before VS After

(Sample “Love Letter” from LHDN)

Compliance Under Section 82B of ITA 1967

Under Section 82B, taxpayers are required to:

• Submit a Return Form as per Section 77 or 77A of the ITA 1967.
• Provide additional information and furnish documents determined by LHDN electronically.
• Ensure submission of these documents within 30 days after the due date for filing the Return Form.

Failure to comply may lead to penalties, emphasizing the importance of adhering to this requirement.

Specified Documents Under Section 82B

Taxpayers are required to upload the following documents for determining taxable income:

• Audited Financial Statements or Accounts
• Tax Calculation
• Complete Schedule of Capital Allowance and Schedule 3 of ITA 1967
• Calculation of Claimed Incentives (if applicable)

Submission Process and Requirements for MITRS

Taxpayers can access MITRS via the MyTax Portal, with submission capabilities extended to authorized representatives such as director, authorised representative and licensed tax agents through the Tax Agent e-Filing (TAeF) system.

Submission Guidelines:

• Document Format: All uploads must be in PDF, limited to 15 MB per document.
• Languages: Documents must be in Malay or English. If prepared in other languages, translations are required.

Penalties for Non-Compliance

Failure to comply with Section 82B constitutes an offense under paragraph 120(1)(d) of the ITA 1967. Upon conviction, offenders may face:

• A fine ranging from RM200 to RM20,000, or
• Imprisonment for a term not exceeding six months, or
• Both.

Professional Guidance and Proactive Planning

As a company secretary or tax professional, it is imperative to guide businesses in adopting MITRS. Early engagement with licensed tax agents and corporate advisors is crucial for ensuring that all specified documents are prepared, translated (if necessary), and submitted correctly.

Recommendations:

1. Utilize the MyTax Portal to familiarize yourself with MITRS functionalities.
2. Conduct thorough reviews of financial statements and tax computations ahead of submission deadlines.
3. Regularly consult LHDN’s guidance notes and updates to stay informed about compliance requirements.

Conclusion

MITRS is a transformative step forward in digitizing Malaysia’s tax compliance processes. By shifting from manual document requests to an integrated digital platform, businesses can expect greater transparency and reduced administrative burdens. As the system becomes mandatory for companies and LLPs, the role of professionals in ensuring seamless compliance cannot be overstated.

For further details, resources, and support, visit the MyTax Portal or schedule appointment with us.

FAQ

What makes the Malaysian Income Tax Reporting System (MITRS) essential for companies in Malaysia?

The Malaysian Income Tax Reporting System (MITRS) plays a critical role for businesses in Malaysia by streamlining tax reporting processes and reducing administrative burdens. Its primary goal is to optimize the preparation and submission of tax-related documents, minimize the need for extensive paperwork, and enhance overall compliance with Malaysia’s tax laws.

For companies, adopting MITRS is essential as it accelerates the processing of tax documentation, simplifies submission workflows, and ensures adherence to statutory tax requirements, promoting operational efficiency and regulatory compliance.

What advantages does the Malaysian Income Tax Reporting System (MITRS) offer for tax reporting?

Improved Accuracy: Standardized formats ensure precise and error-free tax submissions.

Faster Processing: Eliminates the need for physical document submission, speeding up the process.

Enhanced Security: Digital submissions are encrypted, ensuring data confidentiality and protection.

Better Record-Keeping: Easy access to submission history supports efficient record maintenance.

Facilitates Financial Planning: Streamlined access to historical data aids in strategic financial management.