LHDN Tax Appeals in Malaysia: Form Q and the Special Commissioners of Income Tax
If you disagree with an income tax assessment raised by LHDN, you challenge it by appealing to the Special Commissioners of Income Tax (SCIT, or Pesuruhjaya Khas Cukai Pendapatan), an appeal body under the Ministry of Finance that is independent of LHDN. The appeal starts with Form Q, which must be filed within 30 days after the notice of assessment is served (section 99, Income Tax Act 1967).
NZSK prepares grounds of appeal, takes part in settlement discussions, conducts hearings before the Special Commissioners, and handles appeals to the High Court and Court of Appeal. We work with your tax agent or accountant on the computations, and we advise after reviewing your documents at a consultation.
Key Deadlines
30 Days
To appeal an LHDN assessment on Form Q
30 Days
For a Customs review or Tribunal appeal
1 Month
To claim goods seized by Customs
5 Years
Usual LHDN look-back for additional assessments
How do you file a tax appeal on Form Q?
Form Q is the notice of appeal against an assessment. It must:
- be filed within 30 days after the notice of assessment is served;
- set out the grounds of appeal fully, because the appeal is argued on the grounds stated; and
- be signed by the taxpayer or, for a company, an authorised officer.
If the 30 days have passed, apply for an extension of time on Form N (section 100), explaining why the appeal is late. A letter disagreeing with LHDN is not an appeal. Errors in a return you filed yourself are usually corrected by an application for relief under section 131, generally within five years, rather than by Form Q.
What happens after Form Q is filed?
LHDN reviews the appeal and may settle it by agreement, including through a Dispute Resolution Proceeding (DRP) that you can request. LHDN has 12 months to review the assessment and try to settle, which can be extended (section 101).
If there is no agreement, LHDN forwards the appeal to the Special Commissioners. Their client charter aims to register an appeal within three working days of receiving it, and to hear and decide it within 12 months of the first full hearing date.
What happens at a hearing before the Special Commissioners?
Appeals are heard in private. The appellant usually opens, calls witnesses and produces documents, and generally has to show that the assessment is excessive or wrong; LHDN then presents its case. The hearing runs much like a trial, with bundles of documents, witness statements, cross-examination and written submissions. The Special Commissioners may confirm, reduce, increase or discharge the assessment, and record their decision in a deciding order. The evidence given before them is the record for any further appeal, so the case needs full preparation at this stage.
Do you have to pay the tax while the appeal is pending?
Yes. Tax under an assessment is due and payable whether or not you appeal (section 103). Late payment attracts a 10% increase, with a further 5% if still unpaid 60 days later. If the tax is not paid, LHDN can sue for it as a debt, and in that suit the court will not entertain a plea that the amount is excessive, incorrectly assessed or under appeal (section 106(3)). LHDN can also restrict travel for unpaid tax: see our Travel Ban & Tax Recovery page. You can ask for instalments while the appeal is pending, and tax found not due after the appeal is repaid.
Can you appeal the Special Commissioners' decision?
Either party can appeal to the High Court on a question of law against the deciding order, by filing a notice of appeal with the Secretary to the Special Commissioners within 21 days (paragraph 34, Schedule 5). A further appeal lies to the Court of Appeal. Because these appeals are limited to questions of law, the Special Commissioners’ findings of fact usually stand, which is another reason to prepare the evidence thoroughly the first time.
Judicial review is a separate, exceptional route for decisions tainted by illegality or a lack of jurisdiction, and for decisions that cannot be appealed, such as a travel restriction.
How NZSK handles tax appeals
Bring the notice of assessment with the date it was served, the audit findings and correspondence, your returns and computations, and the documents behind the disputed items. We confirm the deadline, draft Form Q grounds that keep every arguable point open, prepare settlement proposals, and conduct the hearing: documents, witnesses, cross-examination and submissions. Your tax agent or accountant prepares the figures, and we work with them throughout. Fees depend on the amount and years in dispute, the volume of evidence and how far the matter goes; we give a fee quotation after the consultation.
Frequently Asked Questions
Speak to a Tax & Customs Lawyer Now!
- (+60)12-401 4799 | (+60)3-8060 0267
- [email protected]
Consultation by appointment — Mont Kiara, Kuala Lumpur & Puchong, Selangor
