Public Ruling No. 4/2000 (Revised) Keeping Sufficient Records (Companies & Co-Operatives)

A company or a co-operative is required under the Income Tax Act 1967 to keep and retain in safe custody sufficient records to enable the income or loss of the company or co-operative for the basis period for any year of assessment to be readily ascertained.

Records / Books of Accounts

1. General requirements

A company or a co-operative must keep records and books of accounts including a cash book, a sales ledger, a purchases ledger and a general ledger. These books of accounts should be written up at regular intervals. Appropriate entries for each transaction should be recorded as soon as possible (in any case not later than 60 days after the transaction). Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, receipts for payments, payroll records and copies of receipts issued should be retained. Where the gross takings for a year exceeds RM 150,000 from the sale of goods or RM 100,000 from the performance of services, receipts issued must be serially numbered. A valuation of the stock in trade or work in progress should be made at the end of the accounting period and the appropriate records maintained.

2. Sufficiency of records 

Records in manual or electronic form should be sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared.

3. Records maintained in electronic form 

If computers are used to record the transactions, original source documents such as invoices and receipts should be retained. Where the original documents are in electronic form, the documents can be retained in such form.

4. Place for keeping records 

Records and books of accounts should be kept at the registered office or the business premises of the company or the co-operative in Malaysia. If the records and books of accounts for operations outside Malaysia are kept outside Malaysia, the records and books of accounts should be produced at the registered office or the business premises of the company or co-operative in Malaysia, when requested by the Director General.

5. Period for keeping records 

A. Records are to be retained for at least 7 years from the end of the year to which any income from the business or operations relates. 

Example The financial year of a company is the year ending 30.06.2002. 

The records of the company for the financial year ending 30.06.2002 should be retained until 31.12.2009 [7 years from the end of 2002 (the year to which the records relate)].

B. If the return for a year of assessment [Y/A] is not furnished within the time specified under the Act, the relevant records are to be retained for a period of 7 years from the end of the year in which the return is furnished.

Example The financial year of a company is the year ending 31.03.2002. The company fails to furnish its return for the Y/A 2002 by 30.09.2002 as required under the Act. The return is furnished on 23.05.2003. 

The records of the company for the financial year ending 31.03.2002 should be retained until 31.12.2010 [7 years from the end of 2003 (the year in which the return is furnished)].

C. Where there is an appeal against an assessment, the relevant records are to be retained until the appeal is finally determined.

6. Records to be kept in the national language or English

Records and books of accounts should be written in the national language or the English language. If the records and books of accounts are written in a language other than the national language or English, a written translation is to be provided, at the expense of the company or the cooperative, when requested by the Director General.

The Consequences If Sufficient Records Are Not Kept

The chargeable income of the company or the co-operative may be determined according to the best judgement of the DG and an assessment made accordingly.

The company or the co-operative or the persons responsible may be prosecuted and, on conviction, may be liable to a fine of not less than RM 300 and not more than RM 10,000 or to imprisonment for a term not exceeding 12 months, or to both.

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Edited by: 浪子

Source: http://lampiran2.hasil.gov.my/pdf/pdfam/PR4_2000_Rev.pdf