Indirect Taxes Voluntary Disclosure & Amnesty Programme

The Royal Malaysian Customs Department (“RMCD”) has introduced a Special Voluntary Disclosure & Amnesty Programme (“VA Programme”) to encourage taxpayers  both to come forward and voluntarily declare any indirect taxes, duties or levies that have been underpaid or erroneously reported, as well as to voluntarily settle any outstanding debts without dispute with the RMCD.

What should you do?

Taxpayers now have a unique opportunity to get things right on their indirect taxes compliance without incurring any penalties. As such, you should now undertake a general review of your indirect taxes or do a more targeted assessment on specific areas of concern, e.g. customs duty, sales tax and/or service tax where mistakes are likely, such as:

  • Misclassifying services as non-taxable

  • Incorrectly using B2B exemption by failing the same service test or the personal consumption test 

  • Not meeting conditions for service tax Policy exemptions

  • Wrongly applying the service tax intra-group relief by failing the 5% de minimis test

  • Late or non-registration for service tax

  • Not accounting for imported service tax

  • Misusing or erroneously using customs duty and sales tax exemptions

  • Failing to meet the conditions for sales tax drawback

  • Not adjusting for import duty and sales tax after making transfer pricing adjustments

  • Underpaying tax by incorrectly omitting royalties, assists, commission payments

  • Incorrect import pricing or incorrect tariff classification

  • Under declaring excise duty and sales tax by motor vehicle manufacturers

What are the benefits of undertaking a review and participating in VA?

  • Uncover any historical errors from misunderstanding or oversight

  • Eliminate (or reduce) the potential penalties 

  • Mitigate any future risk exposures from such errors

  • Obtain further insight into any other areas of improvement on compliance

  • Gain confidence overall in your governance and risk management for indirect taxes

What are the key features of the VA Programme?

  • This programme will run from 1 January 2022 to 30 September 2022 (9 months).

  • The key incentives being offered are full penalty remission for disclosures and payments made in the first six months of the programme, or 50% penalty remission for those made in the last three months. 

  • In addition, there may be a further remission of 10% to 30% of the primary tax in some cases.

  • The VA Programme will cover the following indirect taxes administered by RMCD: Sales Tax, Service Tax, GST, Tourism Tax, Departure Levy, Import Duty, Export Duty and Excise Duty.

  • RMCD will accept any voluntary disclosure made in good faith, and will not commence any audit of the periods and activities involved.
  • Persons eligible to participate in the VA Programme include:


Non-compliances (non-exhaustive)


Registered person

Incorrectly submitted NIL return

Did not submit a return

Under declared & underpaid tax / levy


Company / individual liable to be registered (but failed to register) 

Has imposed tax / levy but has not paid to RMCD


Company / individual liable to be registered (but failed to register) 

Did not collect tax / levy from customers


Company / individual not liable to be registered

Has imposed tax / levy but has not paid to RMCD


Company acquired imported taxable services

Has not accounted for GST / service tax


Company / individual who utilises duty / tax exemptions / facilities

Did not fulfill the prescribed conditions


Sales tax registrant 

(under Sales Tax Act 1972 or Sales Tax Act 2018)

Incorrect sales tax valuation / declaration for sales between related parties


Importer / exporter / manufacturer / Licensed Manufacturing Warehouse / Licensed Warehouse

Underpaid duty / tax during import & export declaration of goods

Incorrect tariff code used during declaration

Errors while utilising any exemption facilities

Incorrect import valuation

Not adjusting for duty / tax after making year end adjustment (for related party transactions) 


Importer of used/new CBU cars 

Under-declaration of vehicle value leading to under-payment of duty / tax


Importer of used CBU cars

Vehicles stored in Licensed Warehouse for >4 years


Importer of new CBU cars

Vehicles stored in Licensed Warehouse for >4 years


Local manufacturer of CKD cars

Excise duty not paid on vehicles not sold for >4 years


How can we help?

Our team has significant experience in performing reviews for indirect taxes and liaising with the authorities for voluntary disclosures. We can help you by:

  • Performing the health check assessment to uncover mistakes or errors

  • Quantifying any exposure and potential risks

  • Advising you through the VA Programme application to tax authorities

  • Providing guidance on potential changes to existing procedures and processes

  • Assisting with amending past returns

  • Liaising with tax authorities

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Contact us

Raja Kumaran

Raja Kumaran

Tax Director, Indirect Tax, PwC Malaysia

Tel: +60 (3) 2173 1701

Geeta Balakrishnan

Geeta Balakrishnan

Director, Tax, PwC Malaysia

Tel: +60 (3) 2173 1652

Chandrasegaran Perumal

Chandrasegaran Perumal

Director, Tax, PwC Malaysia

Tel: +60 (3) 2173 3724