Tax Appeal Form Q (Malaysia)

A Tax Appeal Form Q in Malaysia sets out the income, deductions, and tax position to be reported to the authority.

Section 99 of the Income Tax Act 1967 provides that any person who is aggrieved by an assessment made on him under the Act may appeal to the Special Commissioners of Income Tax. The appeal must be in writing and must be made within 30 days from the date of the Notice of Assessment or the date the assessment is deemed to have been made. Under the Income Tax Act 1967, the assessment date is the date stated on Form J, or — where LHDN issues a deemed assessment upon filing of the return — the date of filing.

The Special Commissioners of Income Tax is an independent quasi-judicial tribunal established under the Income Tax Act 1967, functioning separately from LHDN. SCIT hearings are formal proceedings where taxpayers may be represented by a tax agent licensed under the Tax Agents Rules 2010, a lawyer admitted to the Malaysian Bar under the Legal Profession Act 1976, or appear in person. The SCIT applies the rules of evidence, and parties must submit documentary evidence, examination witnesses, and argue legal and factual issues before the panel of Special Commissioners.

Before lodging Form Q with the SCIT, the taxpayer should consider whether to pursue the pre-appeal administrative objection process. Under Section 101 of the Income Tax Act 1967, a taxpayer may first submit a formal written objection to the LHDN Director General (using a separate letter, not Form Q), asking LHDN to review and revise the assessment without tribunal involvement. If LHDN upholds the assessment after the Section 101 review, the taxpayer then has the right to proceed with Form Q to the SCIT within the remaining appeal period. In practice, the Section 101 objection and the Form Q appeal are often filed simultaneously to preserve the appeal deadline while negotiation with LHDN continues.

Successful SCIT appeals are published as decided cases under the Income Tax Act 1967 and form part of Malaysian income tax jurisprudence — decisions of SCIT may be further appealed to the High Court under Section 114 of the Income Tax Act 1967, and then to the Court of Appeal and the Federal Court on questions of law.

A Tax Appeal (Form Q) in Malaysia is needed whenever a taxpayer disagrees with an assessment raised by LHDN and wishes to challenge it formally.

Form Q is required when LHDN issues a Notice of Additional Assessment (Form J) following a tax audit under Section 91 of the Income Tax Act 1967, increasing the taxpayer's tax liability beyond what was self-assessed. The taxpayer has 30 days from the date of the additional assessment to file Form Q. Missing this deadline forfeits the right to appeal under Section 99(2) of the Income Tax Act 1967.

Form Q is needed when LHDN rejects a deduction claimed by a company or individual — for example, disallowing entertainment expenses beyond 50%, rejecting a capital allowance claim, or denying a tax incentive under the Promotion of Investments Act 1986. The taxpayer disagrees with LHDN's interpretation of the law and wishes to have the issue determined by the SCIT.

Form Q is required when LHDN raises a transfer pricing adjustment under the Income Tax (Transfer Pricing) Rules 2012, increasing the company's chargeable income on the grounds that related party transactions were not at arm's length. Transfer pricing appeals before the SCIT involve complex economic analysis and typically require expert reports from transfer pricing specialists.

Form Q is needed when LHDN invokes Section 140 of the Income Tax Act 1967 (general anti-avoidance) to re-characterise a transaction for tax purposes, increasing the taxpayer's liability. Section 140 appeals involve fundamental disputes about the legal form versus economic substance of transactions.

Form Q is required when an individual's personal income tax assessment is disputed — for example, where LHDN has included income that the taxpayer believes is exempt (foreign-sourced income, gifts, or capital receipts) or has disallowed relief claims under Section 46 of the Income Tax Act 1967.

A complete and valid Tax Appeal (Form Q) for Malaysia must contain the following essential elements.

Taxpayer Identification: The full legal name, NRIC/passport number or SSM registration number, and LHDN income tax reference number of the appellant must be stated. The tax reference number must match the one on the Notice of Assessment being appealed.

Assessment Reference: The year of assessment, the Form J reference number, and the date of the Notice of Assessment being appealed must be stated. If multiple assessments across different years are being appealed, separate Form Q appeals must be filed for each year of assessment under Section 99 of the Income Tax Act 1967.

Amount of Tax Assessed: The total income tax assessed and the balance of tax in dispute must be stated. The taxpayer must specify whether they are disputing the entire assessment or only part of it — and if disputing part, which specific items are in dispute (e.g., disallowed deductions, omitted exemptions).

Grounds of Appeal: A clear and specific statement of the grounds of appeal must be provided. Grounds should cite the relevant provisions of the Income Tax Act 1967 (e.g., 'LHDN has incorrectly disallowed a deduction under Section 33(1)(a) for professional fees of RM X incurred in producing business income') and may reference relevant decided cases of the SCIT, High Court, or Federal Court.

Relief Sought: The taxpayer must state the specific relief requested — for example, cancellation of the additional assessment, reduction of chargeable income from RM X to RM Y, or recognition of a specific deduction or exemption.

Payment of Tax Pending Appeal: Section 103(1) of the Income Tax Act 1967 requires that the assessed tax be paid by the due date even if an appeal is pending. The taxpayer may apply for a stay of payment under Section 103(6) if the appeal will cause hardship, but a stay is not automatic and must be approved by the LHDN Director General or the SCIT.

Representation: The name and contact details of the taxpayer's tax agent or lawyer (if any) must be stated. The Form Q must be signed by the taxpayer or their authorised representative.

Additional compliance elements for a Tax Appeal Form Q (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.