Real Property Gain Tax Penalty
The consequences of non-compliance with the RPGT Act 1976 are costly. Are you aware of that?
3 Types of Penalties
There are 3 types of penalties and increments for 3 different scenarios.
1. Subsection 30(2) (RPGT ACT 1976)
• Action: Disposer makes incorrect return or incorrect information on disposal of the asset.
• Consequence: Penalty amount equal to the amount of tax under-declared.
2. Subsection 29(3) (RPGT ACT 1976)
• Action: Disposer/acquirer fails to submit CKHT 1A or CKHT 1B within 60 days from the date of disposal of property or out of the extension period. OR
• Action: Disposer fails to declare the disposal of property
• Consequence: Penalty will be charged up to 3 times the tax charged (Subsection 29(3a))
3. Subsection 14(5) (RPGT ACT 1976)
• Action: The acquirer remitted the payment wrongly because the disposer made an incorrect return.
• Consequence: An additional surcharge of 10% on the amount of tax charged will be imposed on the disposer.
How to avoid such penalties?
1. Disposers are required to:
• Submit the form CKHT 1A or CKHT 1B within 60 days from the date of disposal.
• Submit tax exemption form and supporting documents (eg: water bills, rental agreement, etc).
• Submit form CKHT 3 together with CKHT 1A or CKHT 1B.
• Submit a copy version of CKHT 3 to acquirer.
2. Acquirers are required to:
• Submit form CKHT 2A within 60 days from the date of acquisition.
• Submit supporting documents such as sale and purchase agreement and CKHT 502 payment receipt/payment slip/completed form CKHT 3.
• Receive a copy of completed form CKHT 3 from disposer.
Real Property Gains Tax Act 1976
Imposition Of Penalties And Increases Of Tax
Responsibility Of Disposer And Acquirer
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Published : 20-Oct-2022