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Following the re-tabling of the Malaysian Budget 2023 on 24 February 2023, the Malaysian Inland Revenue Board (IRB) and Royal Malaysian Customs Department (RMCD) have reintroduced the Special Voluntary Disclosure Programme (SVDP) 2.0 and the Voluntary Disclosure Programme (VDP) which apply to direct taxes and indirect taxes respectively. A similar programme was previously implemented in 2022 for indirect taxes and in 2019 for direct taxes, although there are some key differences in respect of the scope and incentives.

Given that there are usually no formal voluntary disclosure routes for taxes in Malaysia, it would be an opportune time for businesses to carry out internal due diligence and address any tax compliance gaps through the SVDP 2.0 and/or VDP.

In terms of timeline, the VDP and SVDP 2.0 will be implemented from 6 June 2023 to 31 May 2024, and any overdue taxes that have been disclosed must be paid in full by 31 May 2024. The incentives offered under these programmes include, among others, a 100% penalty remission for the relevant voluntary disclosure made. Further, businesses that have participated in VDP and SVDP 2.0 will also be granted a period of audit immunity, provided that the disclosure is made in good faith and there is no element of fraud.

However, as opposed to the previous VDP in 2022, the current VDP for indirect taxes would not include export duties and taxes imposed on the importation of goods into Malaysia.

In view of the complete penalty waiver, the Malaysian tax authorities anticipate that the current proposed VDP and SVDP 2.0 will be well received by Malaysian businesses and result in a relatively significant collection in tax revenue.

Despite the incentives of the VDP and SVDP 2.0, taxpayers are encouraged to undertake a comprehensive review of their tax positions and assess the pros and cons of participating in the programmes before making a conclusive decision to undertake the disclosure.


Adeline Wong heads the Tax, Trade and Wealth Management Practice Group of Wong & Partners and the Tax and Trade Practice Group of Baker McKenzie member firms in the Joint Asian Offices. She has over 30 years of experience in the area of corporate tax planning, advisory, audit and investigation work. Adeline won the Euromoney Asia Women in Business Law Awards for the Tax category in 2013, 2018 and 2020. Her practice was named the Tax and Trusts Law Firm of the Year by the Asian Legal Business Malaysia Law Awards in both 2020 and 2021. She is ranked as a Band 1 practitioner by Chambers Asia Pacific for Tax and by the Chambers High Net Worth Guide for Private Wealth Law. Clients commend her as "a leading tax lawyer" and a "standout name in the private wealth market in Malaysia" in the Chambers guides. She is also listed as a Leading Individual by Legal 500 Asia Pacific and as an Elite Practitioner by Asialaw Profiles for Tax. The International Tax Review also ranks Adeline as a Highly Regarded practitioner among its Tax Controversy, Indirect Tax and Women in Tax Leaders Guides. She has presented in both domestic and international tax conferences, including conferences organised by the Tax Executive Institute in the US, Society of Trust and Estate Practitioners in Singapore and Bloomberg BNA's Global Transfer Pricing Conference in Shanghai. She is also a regular contributor to established publications on tax-related legislation and developments in Malaysia, such as Bloomberg BNA and the International Bureau of Fiscal Documentation.


Wei Lit Wong is a Legal Assistant in Wong & Partners, Kuala Lumpur office.


Chloe Ng is a Legal Assistant in Wong & Partners, Kuala Lumpur office.

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