Penalties
SALES & SERVICE TAX

Late Payment Penalty:
If the tax is not paid within the stipulated period, a penalty will be imposed at the following rates:

10% of the tax amount for the first 30 days.

An additional 15% for the second 30 days (based on the outstanding balance).

An additional 15% for the third 30 days (based on the outstanding balance).

The maximum penalty rate is 40% after a period of 90 days.

Failure to Keep Record:
Failure to keep records for 7 years can result in a fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years, or both.

Incorrect Return:
Submitting an incorrect or incomplete return is an offence punishable by a fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years, or both.

Improper Tax Deduction:
Anyone who causes a tax deduction exceeding the appropriate amount is liable to a fine not exceeding RM50,000 and a penalty equal to twice the over-deducted amount.

Remission of Penalty:
The Director General has the power to remit (reduce) the whole or any part of the penalty or surcharge if the application is supported by reasonable grounds.