So you missed the Income Tax Form BE submission deadline, what now ?

The deadline for submission of Income Tax Form BE for 2008 was 30 April 2009. There may be many who missed the deadline for various reasons.

What happens next ? What are the penalties ?

Let us examine the Income Tax Act (ITA) to see what penalties are there and what the IRB’s practice is.

Section 112(1) of the ITA states that if you default in submitting the Form B or BE before the deadline ‘without reasonable excuse’, you are liable to a fine not exceeding RM1,000 or 6 months jail or both ‘on conviction’.

In practice, the IRB seldom use this Section to charge you (unless you are a big fish). This is because in order for them to apply this Section, they have to charge you in court and get a conviction. Note that there is still an escape clause “without reasonable excuse”. You may have a reasonable excuse and in order to get a conviction from the court, it may take years.

Section 112(3) says that if no prosecution in instituted, then the IRB may require you to pay a penalty equal to ‘three times the amount of tax payable’ (before any set-off, repayment or relief). If you have paid the penalty under Section 112(3), then you shall not be charged under Section 112(1) again.

So in practice, the IRB will usually fine you under Section 112(3). For normal salaried workers who file in Form BE, they usually impose a fine of RM50 for the first offence. If you are still late next year, they may impose a fine of RM100. The next year, RM150 etc.

It is interesting to note that Section 112(3) allows the IRB to impose a fine only if you are taxable. Note the wordings ‘three times the amount of tax payable’. If your tax payable is ‘0’, three times ‘0’ is still ‘0’.

So if your ‘Tax payable’ under item E9 of the Form BE is ‘0’, then you need not worry this year as the IRB will not be able to impose a fine on you. However, the IRB will take note that this is your first offence. If you are late again next year, they may fine you RM100 right away if you have tax payable.