Voluntary Disclosure Program (VDP): Indirect Taxes

We are pleased to inform you that the Royal Malaysian Customs Department (RMCD) will be reintroducing a Voluntary Disclosure Program (VDP) for indirect taxes, as announced by the Minister of Finance during the Budget 2023 speech on 24th February 2023.

The VDP will cover mistakes or omissions related to indirect taxes previously unknown or undiscovered by the RMCD.

Implementing this program will involve penalty remission incentives under specific acts and subsidiary legislation, except for taxes imposed on the importation of goods.

Participants who meet the conditions will be granted 100% penalty remission.

The acts included are as follows:

1. Sales Tax Act 1972;
2. Service Tax Act 1975;
3. Goods and Services Tax Act 2014;
4. Tourism Tax Act 2017;
5. Sales Tax Act 2018; and
6. Service Tax Act 2018.

The “Guideline on Voluntary Disclosure Program for Indirect Taxes” and “Frequently Asked Questions (FAQ)” were published by the Royal Malaysian Customs Department on 02 June 2023

The purpose of these guidelines is to provide clarity on the implementation of the VDP. It aims to:

1. Explain the program’s implementation process.
2. Provide information on the duration of the program.
3. Provide details about the incentives offered under the VDP.

The FAQ section addresses common queries to provide further clarity. it explains:

1. voluntary disclosure program policy;

2. application procedure;

3. payment method; and

4. Who can taxpayers contact if they have any questions regarding VDP?

These publications reflect the commitment of the Royal Malaysian Customs Department to promoting transparency and ensuring a smooth implementation of the VDP.

We encourage all individuals and businesses to take advantage of this program to rectify any mistakes or omissions related to indirect taxes.

This voluntary disclosure initiative will allow taxpayers to come forward, correct their tax records, and benefit from the penalty remission incentives.

The “Guideline on Voluntary Disclosure Program for Indirect Taxes” and “Frequently Asked Questions (FAQ)” documents are available for download from the attachments below:-

1. Guideline on Voluntary Disclosure Program for Indirect Taxes

2. Frequently Asked Questions (FAQ)

If your company is eligible to participate in VDP, those procedures that your company go through:-

1. Application for registration using Form VDP-01 through the MyVDP system,
2. Acceptance of Participation Eligibility Letter (VDP-02),
3. Ensure all taxes involved are paid in full no later than 31 May 2024,
4. Submit proof of payment,
5. The VDP Approval Letter (VDP03) will be issued after the company pays in full the amount of tax declared. We highly encourage all users to obtain and read the complete context of these resources in order to gain a comprehensive understanding of the Voluntary Disclosure Program (VDP) for indirect taxes.

By familiarising yourself with the guidelines and FAQs, you will be equipped with the necessary information to make informed decisions and participate effectively in the VDP.

Should you have any further questions or require assistance, please do not hesitate to reach out to the Royal Malaysian Customs Department.

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