RPGT: New Section 13A - Amendment of Return

The Finance (No. 2) Bill 2023 introduces a new section, Section 13A, amending the Real Property Gains Tax Act 1976. "Section 13A - Amendment of Return" is read as follows：-

Section 13A(1) Where for a year of assessment a person has furnished a return in accordance with section 13, that person may make amendment to such return in an amended return as prescribed by the Director General in respect of the amount of tax or additional tax payable by that person on the chargeable gains or on the amount of tax which has been or would have been wrongly repaid to him.

Section 13A(2) An amended return under subsection (1) shall only be made after the due date for the furnishing of the return in accordance with section 13, but not later than six months from that date.

Section 13A(3) For the purposes of this section, the amended return shall

1. specify the amount or additional amount of chargeable gains and the amount of tax or additional tax payable on that chargeable gains;

2. specify the amount of tax payable on the tax which has or would have been wrongly repaid to him;

3. specify the increased sum ascertained in accordance with subsection (4); or

4. contain such particulars as may be required by the Director General.

Section 13A(4) The tax or additional tax payable under subsection (1) shall be increased by a sum equal to ten per cent of the amount of such tax or additional tax.

Section 13A(5) The amendment under subsection (1) shall only be made once.

Section 13A(6) Where— (a) a return for a year of assessment has been furnished in accordance with section 13, and (b) the Director General has made an assessment for that year of assessment under section 15, no amendment shall be allowed under this section.”.

Section 13A - Amendment of Return:

Here is an explanation of the new section:

Amendment Provision:

• Subsection (1): Any person who has submitted a return under Section 13 may amend that return in an amended return.

• This amendment is related to the amount of tax or additional tax payable on chargeable gains or on the amount of tax that has been or would have been wrongly repaid.

Time Limit for Amendment:

• Subsection (2): An amended return can only be made after the due date for the original return under Section 13 but not later than six months from that date.

Details in Amended Return:

• Subsection (3): The amended return must specify:

1. The amount or additional chargeable gains and the tax or additional tax payable on those gains.

2. The amount of tax payable on the tax that has been or would have been wrongly repaid.

3. The increased sum calculated as per subsection (4).

4. Any particulars required by the Director General.

Increased Sum:

• Subsection (4): The tax or additional tax payable in the amended return will be increased by a sum equal to 10% of such tax or additional tax.

Limit on Amendments:

• Subsection (5): Amendments under subsection (1) can only be made once.

Restriction on Amendments After Assessment:

• Subsection (6): If the Director General has already made an assessment for a year of assessment under Section 15 after a return has been furnished under Section 13, no further amendment is allowed under Section 13a.

Tax Impact:

Taxpayers can rectify errors or provide additional information related to the amount of tax or additional tax payable on chargeable gains. This can help ensure accuracy in the tax reporting process.

Taxpayers have a limited period to review and make necessary amendments to their returns. Timely corrections can prevent potential issues with tax authorities.

Taxpayers need to carefully review their returns and ensure that all necessary corrections are made in the single opportunity provided by the amendment. It emphasises the importance of accuracy in the initial filing.

There is a penalty in the form of a 10% increase on the tax or additional tax payable through the amended return. This encourages taxpayers to file accurate returns initially and discourages frequent amendments.

Conclusion:

Section 13A aims to strike a balance by allowing taxpayers to rectify genuine errors in their returns while imposing a penalty to discourage misuse of the amendment provision.

However, there is a limitation on the number of amendments, and an increased sum of ten percent is applicable to the tax or additional tax payable.

Taxpayers should be mindful of the limited timeframe and the penalty when considering amendments to their returns.

Consulting with tax professionals can help ensure compliance and minimise potential penalties.