The Extension of Time applies to two categories of VA Program participants:
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.
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.
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:
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.
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.
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:
|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
(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)
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.
||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.
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.