The proposal is in line with the provisions of the Companies Act 1965, which also requires companies to keep records for seven years. The Bill further provides that where a person carrying on a business does not submit the income tax returns within six months of the end of its accounting period, the accounting records relating to the accounts of that particular year of assessment will have to be retained for a period of seven years after the end of the year in which the return is furnished. To illustrate, a company carrying on business has its financial year ending on 31 December 2002. The deadline for the submission of the tax return for Year of Assessment 2002 would be 30 June 2003. Where the company submits its tax return by the due date it would be required to retain its accounting records for the financial year ending 31 December 2002 until 31 December 2009.
All records relating to any business in Malaysia are to be kept and retained in Malaysia.
This proposal is in line with the relevant provisions in the Companies Act 1965, which require that all records relating to any business in Malaysia be retained in Malaysia. Maintenance of Records in an Electronically Readable Form Where a taxpayer retains records in an electronically readable form, the records should be readily accessible and convertible into writing. Further, it is proposed that where a taxpayer converts records previously maintained in manual form into an electronic form, the original manual records should be retained. The above amendments are proposed to come into effect in Year of Assessment 2001. The Bill also seeks to increase the penalties that can be imposed for the failure to maintain business records.