Malaysia: Extension of Payment Period for Phase 1 of the VA Program

In brief

The Ministry of Finance Malaysia (MOF) and the Royal Malaysian Customs Department (RMCD) have made an announcement in respect of the Voluntary Disclosure and Amnesty Program for indirect taxes ("VA Program") on 29 June 2022. The announcement1 relates to an extension of the payment deadline for Phase 1 of the VA Program from the original deadline of 30 June 2022 to 14 July 2022 ("Extension of Time"). The Extension of Time introduced on the final two days of Phase 1 gives VA participants an additional two weeks period to obtain the relevant approvals from RMCD (i.e., Form VA-02) and to make the relevant payments to qualify for Phase 1 remission and penalty rates.


The Extension of Time applies to two categories of VA Program participants:

  1. Those who have submitted their VA Program application via Form VA-01 ("VA-01") and received their letter of confirmation of eligibility via Form VA-02 ("VA-02") on or before 30 June 2022.

  2. Those who have submitted their VA-01 on or before 30 June 2022 but have not received their VA-02.

The Extension of Time will be given automatically to the eligible VA Program participants, and no separate application to the RMCD is required.

Additionally, the Extension of Time relates only to Phase 1 of the VA Program. The timeline for Phase 2 of the VA Program will remain unchanged.


Wong & Partners' comment: The Extension of Time is likely in response to the recent hike in the volume of VA applications that RMCD has received and an avalanche of VA participants at the payment counter of various RMCD branches. For now, all payments have to be made in person at the RMCD payment counter. The Extension of Time will not only benefit businesses who are trying to prepare their payment instruments by 30 June 2022, but it would also encourage businesses to submit their VA-01 as soon as possible, on or before 30 June 2022 to enjoy the more favorable remission and penalty rates.

Payment process

The payment process has not changed in view of the Extension of Time. When making payments for the VA Program, businesses should be aware of the salient points below:     

  1. Queue and ticket system - Some of the RMCD branches have introduced queue or ticket systems to address the large number of VA applicants attempting to make payments, and businesses are advised to attend to the payment as early as possible during working hours.

  2. Separate payment instruments - If the payment will be made via bank draft or cheque, separate bank drafts or cheques must be prepared for the: (i) amount of shortfall in duty or tax payable; and (ii) amount of compound.

  3. Two copies of documents - VA participants would need to present two copies of the: (i) VA-02; (ii) Form 2 (i.e., Borang 2) in relation to the compound; and (iii) Form 3 (i.e., Borang 3) in relation to the acceptance of the compound, during payment.

Incentives under the VA Program  

For ease of reference, we have set out below the difference in incentives between Phase 1 and Phase 2 of the VA Program below:

Incentive Phase 1 Phase 2
Blanket remission on the amount of shortfall in taxes and duties payable

Up to 30% remission for categories of non-compliances enlisted under the voluntary disclosure program

10% remission for circumstances encompassed under the amnesty program.

Generally, half of the remission rates offered under Phase 1.
Blanket remission on any penalty or surcharge 100%
(However, any outstanding penalty on a bill of demand issued on or before 31 October 2021 is only eligible for 90% remission rate)


(However, any outstanding penalty on a bill of demand issued on or before 31 October 2021 is only eligible for 80% remission rate)

Nominal compound

RM 500 compound per disclosure where the total amount of duties and taxes payable is less than RM 100,000.

RM 1,000 compound per disclosure where the total amount of duties and taxes payable is RM 100,000 and above.

Audit immunity No audits will be conducted on the activity and period disclosed by the business unless there is strong evidence that the disclosures were made fraudulently. Additionally, participants of the VA Program will be given one (1) year audit immunity from 1 October 2022.


Please click here to view our previous client alert published in relation to the VA Program for further information.

1 The announcement on the Extension of Time can be found on RMCD's website here.


LOGO Malaysia_Wong & Partners_KualaLumpur

This client alert was issued by Wong & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner or equivalent in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. 

Contact Information

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.