The Finance Act 2016, which was gazetted on 16 January 2017, introduced penalty provision for failure to furnish country-by-country report. A new Section 112A of the Income Tax Act 1967 is introduced to address the implications on person who fails to furnish a CbCR.
A person who fails to furnish a CbCR in accordance to the provisions made under Section 154(1)(c) and Section 132B of the Income Tax Act, 1967, shall be guilty of an offence and if proven, would be liable to a fine of not less than RM20,000 and not more than RM100,000 or to imprisonment for a term not exceeding 6 months or to both. The burden of proving that a CbCR has been furnished shall be upon the person being accused. The court may make a further order that the convicted person complies with the provision of the rules within a specified period as ordered by the court. This is effective upon coming into operation of the Finance Act 2016.