Malaysia imposes travel restrictions on taxpayers with outstanding tax arrears after six months
Malaysia’s enforcement of tax arrears includes travel restrictions for taxpayers who fail to settle their dues within six months and do not respond to notices from the Inland Revenue Board of Malaysia. Deputy Finance Minister Liew Chin Tong said the measure does not apply solely because of a failure to pay CP500 instalments, as the actual tax liability is determined only after an income tax return is filed.
Highlights
- Malaysia will impose travel restrictions on individuals who fail to settle outstanding income tax or real property gains tax after six months.
- The power to impose travel restrictions is provided for under Section 104 of the Income Tax Act 1967 and Section 22 of the Real Property Gains Tax Act 1976, and applies only to confirmed tax arrears, not delayed CP500 instalments.
- The Inland Revenue Board of Malaysia advises taxpayers to use the MyTax portal to check their arrears status before planning overseas travel.
This article was translated from the original. Read the original version by our correspondent here.
Travel restriction rules and scope of tax arrears
As reported by The Edge Malaysia, Liew told the Dewan Rakyat that the Inland Revenue Board of Malaysia can impose travel restrictions on individuals who fail to settle outstanding income tax or real property gains tax. He said this power is provided for under Section 104 of the Income Tax Act 1967 and Section 22 of the Real Property Gains Tax Act 1976.Liew explained that failure to pay CP500 instalments does not, by itself, result in a travel restriction. According to him, the final tax payable is calculated only after the CP500 instalments already paid are deducted, and only the remaining amount that is still unpaid after the specified period is classified as tax arrears.
CP500 is a bi-monthly tax instalment scheme administered by the Inland Revenue Board of Malaysia for individuals who earn non-employment income, including rental income, royalties and business profits.
Implications for taxpayers and status checks
The travel restrictions are intended to track down debtors and taxpayers who continue to fail to settle their outstanding obligations even after receiving reminders. The statement indicates that enforcement is aimed at confirmed arrears, rather than instalment schedules alone.To avoid disruption to overseas travel, the Inland Revenue Board of Malaysia advises taxpayers to check their arrears status before making travel plans. Tax arrears can be checked through the MyTax portal, while the status of travel restrictions imposed by other agencies can be checked on the Immigration Department’s website.
In earlier coverage, we examined the extension of the MyIMMs contract to ensure Malaysia’s legacy immigration system remains operational until 2029.
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