What is the Malaysian Income Tax Reporting System (MITRS)?

In Malaysia, publicly listed companies must prepare and submit XBRL financial reports with SSM. The aim of adopting XBRL for financial reporting was to facilitate storing, sharing, and using business data. Apart from financial reporting, Malaysia adopted XBRL for tax computation to achieve a higher tax return compliance rate.

IRBM (the Inland Revenue Board of Malaysia) or LHDNM (Lembaga Hasil Dalam Negeri Malaysia) introduced an online platform to submit tax working sheets electronically, known as the Malaysian Income Tax Reporting System (MITRS). It was developed using the XBRL (eXtensible Business Reporting Language) format, an international standard for digitally sharing financial reports of businesses, replacing paper-based reporting.

The LHDNM issued the XBRL taxonomy framework to reflect information requirements for tax return forms and support tax working sheets. The tax working sheets contain 3 categories: working sheet, financial information, and sole proprietorship financial information (SPFI).

Companies, sole proprietorships, partnerships, associations, and cooperative societies in Malaysia must prepare and submit tax working sheets using MITRS. You can access MITRS using an e-filing digital certificate.

Preparing and Submitting Tax Working Sheets Using MITRS

You can prepare and submit tax working sheets using MITRS via two methods:-

Fill in Web Form

Fill in the related tax working sheets online.
Validate the working sheets online.
After validation, submit the sheets using a digital certificate online.
A QR code will be generated to confirm the submission.
Save and print the tax working sheet.
Save and print the confirmation of receipt of the working sheet.

Import Instance

Download the LHDNM taxonomy file and generate instances using either the XBRL tools or special software (self-developed by the company/ software provider).
Next, upload the instance into MITRS.
Validate the working sheets online.
After validation, submit the sheets using a digital certificate online.
A QR code will be generated to confirm the submission.
Save and print the tax working sheet.
Save and print the confirmation of receipt of the working sheet.

MITRS Implementation

The taxonomy for preparing and submitting tax working sheets using MITRS was announced and published in February 2019. The implementation of MITRS began in phases beginning on 1 September 2020. In the first phase, the submission of tax working sheets is only applicable for Malaysian companies under audit or investigation. The company involved is given an option but encouraged to submit tax working sheets through MITRS because it is user-friendly, saves time, and guarantees data protection.

The phases for submitting tax working sheets by sole proprietorships, partnerships, associations, and cooperative societies under audit or investigation are yet to be announced.

Bottom Line of MITRS

MITRS was introduced by IRBM to help companies save a lot of time while submitting their tax working sheets. To know more about MITRS, you can email at HelpITMITRS@hasil.gov.my. Additionally, to understand how XBRL adoption is benefiting Malaysian companies, including insights on MBRS – XBRL Tagging Service, consider exploring the DataTracks Malaysia Website.

Frequently Asked Questions

What is MITRS and why is it important for Malaysian companies?

The Malaysian Income Tax Reporting System (MITRS) is a digital infrastructure that was implemented by the Inland Revenue Board of Malaysia (IRBM) with the purpose of enabling the submission of tax working sheets and other pertinent documents electronically. Its primary objective is to optimise tax reporting procedures, diminish documentation requirements, and enhance tax compliance efficiency. Adopting MITRS is of the utmost importance for Malaysian businesses, as it expedites the processing of tax documents, streamlines the submission process, and facilitates adherence to Malaysia’s tax regulations.

How can companies start using MITRS for their tax submissions?

To begin using MITRS, companies must first register for an account with the IRBM’s online portal. This involves providing company details and verifying contact information. Once registered, users can access MITRS through the IRBM portal, where they can upload their tax working sheets and other required documents in the prescribed format. For detailed guidance and support, companies can contact IRBM directly at HelpITMITRS@hasil.gov.my.

What are the benefits of using MITRS for tax reporting?

Using MITRS for tax reporting offers several benefits, including increased accuracy in tax submissions due to standardized formats, quicker processing times by eliminating physical document submission, and enhanced security through encrypted digital submissions. Additionally, MITRS provides companies with easier access to their tax submission history, allowing for better record-keeping and financial planning.