Are businesses exempt from penalties during the interim relaxation period?

LHDN/HASiL states that the interim relaxation includes relief from penalties for eligible taxpayers who comply with the conditions of the arrangement. The published schedule lists the relaxation for taxpayers with annual turnover or revenue up to RM5 million in the relevant phase as continuing until 31 December 2027. However, the below-RM3-million exemption introduced in 2026 may mean that some taxpayers are outside the mandatory scope, subject to the applicable conditions and exceptions.

The relaxation is not blanket immunity from every tax obligation or every form of non-compliance. Businesses should verify the latest Specific Guideline, including Section 16, and the current General FAQ to confirm the requirements and relief that apply to them.

Key points

• Eligible taxpayers may receive relief from penalties during the applicable relaxation period.
• The published guidance states a period through 31 December 2027 for the relevant phase with turnover or revenue up to RM5 million.
• The below-RM3-million exemption and its conditions must also be considered.
• The relaxation applies only to the requirements and concessions stated in official guidance.
• Retain compliance records and check the latest LHDN/HASiL guidance before relying on relief.