How Long to Keep Tax Records: 7 Years (Sections 82 & 82A)

Introduction

How long must you keep receipts, invoices and tax documents? The short answer: 7 years — but the starting point of that period differs according to the legal provisions and your situation.

This article explains the record-keeping obligations under Section 82 (business records & receipts) and Section 82A (documents to determine chargeable income) of the Income Tax Act 1967 (ACP 1967), as well as the penalty under Section 119A.

Section 82 — business records & receipts

Every person who carries on a business must keep and maintain adequate records for 7 years from the end of the year to which the business income relates (s.82(1)).

If the amount of gross receipts exceeds RM150,000 (sale of goods) or RM100,000 (services), you must:

Issue printed receipts with serial numbers for every amount received; and
Keep copies of those receipts.

If a return has not been filed for a year, records must be kept until 7 years after the end of the year in which the return is filed (s.82(1A)).

Source: ACP 1967, s.82 (R1).

Section 82A — documents to determine chargeable income

Every person who is required to file an income return (including individuals) must keep sufficient documents for 7 years from the end of that year of assessment (s.82A(1)).

If a return has not been filed — the period is 7 years after the end of the year in which the return is filed (s.82A(2)).

"Documents" include income & expenditure statements, invoices, vouchers and receipts (s.82A(6)).

Source: ACP 1967, s.82A (R1).

Form of records & how to keep them

Electronic records: may be kept in a machine-readable form as long as they are easily accessible and convertible into writing (s.82(7)); original records converted to electronic form must continue to be kept.
Entries: must be made within 60 days for each transaction (s.82(6)).
Location: records relating to a business in Malaysia must be kept in Malaysia (s.82(8)).
"Records" include account books, invoices, vouchers, receipts and other necessary documents (s.82(9)).

Source: ACP 1967, s.82 (R1).

What should individuals keep?

According to the HASiL FAQ, taxpayers must keep records, documents and worksheets for 7 years for audit purposes. For example:

Form EA/EC;
Dividend vouchers;
Insurance premium receipts;
Book/medical/donation/zakat receipts;
Birth/marriage certificates;
Worksheets.

These documents do not need to be submitted with the return (except for certain refund cases), but must be kept.

Source: HASiL — Frequently Asked Questions (Individuals); Form B/BE Explanatory Notes (R2, R3, R4).

Penalty — Section 119A

Failing to comply with an order/notice under s.82(3)/(5), or contravening s.82(1)/(1A)/(6)/(7)/(8), is an offence. If convicted:

A fine of not less than RM300 and not more than RM10,000; or
Imprisonment for up to 1 year; or
Both.

Source: ACP 1967, s.119A (R1); HASiL FAQ (R2).

this item still awaits official confirmation from HASiL — check again with HASiL before deciding. notes from research

Frequently Asked Questions (FAQ)

Q. How long do I need to keep tax receipts? A. Generally 7 years — the period is counted from different starting points according to the provision: the end of the year of the related income (s.82, business), the end of the year of assessment (s.82A), or the end of the year in which the return is filed (if the return has not been filed).

Q. I am a salaried employee, not a trader. Do I also need to keep records? A. Yes — s.82A applies to every person who is required to file a return, including individuals. Keep documents such as Form EA/EC, dividend vouchers, relief receipts and worksheets for 7 years.

Q. Do records need to be submitted with the tax return? A. No — except for certain refund cases. They must be kept and produced upon request by HASiL.

Q. Can I keep records electronically? A. Yes — as long as they are easily accessible and convertible into writing; original records converted to electronic form must continue to be kept. Malaysian business records must be kept in Malaysia.

Q. What happens if I do not keep business records? A. It can be an offence under s.119A — if convicted: a fine of RM300–RM10,000 or imprisonment for up to 1 year or both.

Glossary

ACP 1967 — Income Tax Act 1967.
Records — account books, invoices, vouchers, receipts and other necessary documents.
Documents (s.82A) — include income & expenditure statements, invoices, vouchers, receipts.
Worksheet — supporting calculations for the return.
YA — Year of Assessment.