00042_Keeping Sufficient Records (Companies & Operatives) - PR 04-00 (010300)

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Public Ruling No. 4/2000 KEEPING SUFFICIENT RECORDS (COMPANIES & CO-OPERATIVES) 1.0 TAX LAW This Ruling applies in respect of section 82 of the Income Tax Act, 1967. 2.0 THE APPLICATION OF THIS RULING This Ruling considers: 2.1 2.2 3.0 what constitute sufficient records that a company or a co-operative needs to keep; the consequences of failing to keep sufficient records. HOW THE TAX LAW APPLIES 3.1 A company or a co-operative must keep and retain sufficient records to enable the income or loss
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  Public Ruling No. 4/2000   KEEPING SUFFICIENT RECORDS (COMPANIES & CO-OPERATIVES)  1.0 TAX LAW  This Ruling applies in respect of section 82 of the Income Tax Act, 1967.2.0 THE APPLICATION OF THIS RULING  This Ruling considers:2.1what constitute sufficient records that a company or a co-operativeneeds to keep;2.2the consequences of failing to keep sufficient records.3.0 HOW THE TAX LAW APPLIES  3.1A company or a co-operative must keep and retain sufficientrecords to enable the income or loss from the business to be readilyascertained.3.2This Ruling gives general guidelines on the records that are to beretained for the purpose of income tax.3.3Records / Books of Accounts3.3.1A company or a co-operative must keep records andbooks of accounts including a cash book, a salesledger, a purchases ledger and a general ledger. Thetype of books that should be kept will depend on thenature and the size of the business. These books of accounts should be written up at regular intervals.Appropriate entries for each transaction should berecorded as soon as possible (in any case not later than60 days after the transaction). Supporting documentssuch as invoices, bank statements, pay-in slips, chequebutts, receipts for payments, payroll records andcopies of receipts issued should be retained. Where thegross takings for a year exceeds RM150,000 from thesale of goods or RM100,000 from the performance of services, receipts issued must be serially numbered. Avaluation of the stock in trade should be made at theend of the accounting period and the appropriaterecords maintained.3.3.2These books and other records in manual or electronicform should be sufficient to explain the transactions  and to enable a true and fair profit and loss accountand a balance sheet to be prepared.3.3.3If computers are used to record the transactions,srcinal source documents such as invoices andreceipts should be retained. Where the srcinaldocuments are in electronic form, the documents canbe retained in such form. The system documentationincluding the accounting manual, chart and code of accounts should be maintained.3.3.4Records and books of accounts should be kept at theregistered office or the business premises of thecompany or the co-operative in Malaysia. If therecords and books of accounts for operations outsideMalaysia are kept outside Malaysia, the records andbooks of accounts should be produced at the registeredoffice or the business premises of the company or co-operative in Malaysia, when requested by the DirectorGeneral.3.3.5Records and books of accounts are to be retained for atleast six years from the end of the calendar year inwhich the accounts are closed .Where there is anappeal against an assessment, the relevant records andbooks of accounts are to be retained until the appeal isfinally determined.3.3.6Records and books of accounts should be written inthe national language or the English language. If therecords and books of accounts are written in alanguage other than the national language or English,a written translation is to be provided, at the expenseof the company or the co-operative, when requestedby the Director General.3.4The Consequences if Sufficient Records Are Not Kept3.4.1The chargeable income of the company or the co-operative will be determined according to the best judgement of the Director General and an assessmentwill be raised accordingly.3.4.2The company or the co-operative or personsresponsible may be prosecuted and, on conviction,may be liable to a fine of not less than RM200 and notmore than RM2,000 or to imprisonment for a term not  exceeding six months, or to both.4.0 INTERPRETATION  For the purpose of this Ruling:4.1 Persons responsible include the manager or other principalofficer in Malaysia, the directors, the secretary and any person(however styled) exercising the functions of any of the personsmentioned earlier.4.2 Records include original source documents. (Date of Issue: 01/03/2000)  
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