Tax

Public Ruling 10/2023 Pioneer Status Incentive

Public Ruling 10/2023 Pioneer Status Incentive
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(Tax Update) Unlocking the Benefits of Pioneer Status Tax Incentive

Public Ruling 10/2023 Pioneer Status Incentive

The publication of Public Ruling 10/2023 on the Pioneer Status Incentive by IRBM on December 29, 2023, is particularly relevant. As tax agents, we consistently recommend that our taxpayers and investors consult official publications from MIDA.

This incentive is designed to attract and facilitate investment in key sectors, offering substantial tax benefits to qualifying companies. As an investor, understanding these details is critical for making informed decisions about potential investments in Malaysia

Pioneer Status is, in general, given by way of exemption from tax on 70% of the statutory income for five years and the remaining 30% is taxed at the prevailing tax rate.

For a comprehensive understanding of the Pioneer Status tax incentive, we invite you to explore our case study, available on our KTP website at https://www.ktp.com.my/pioneer-status.

Here's a summary of key points of Public Ruling 10/2023 :

Objective

This incentive aims to explain the pioneer status available to companies engaged in promoted activities or producing promoted products in Malaysia.

Pioneer Status

It's a tax incentive under the Promotion of Investments Act (PIA), providing tax relief on statutory business income for companies in certain sectors.

Qualifying Companies

Pioneer status is granted to companies undertaking promoted activities or producing promoted products. This includes sectors like manufacturing, agriculture, hotels, tourism, etc.

Promoted Activities and Products

These are determined by the Minister of International Trade and Industry, in concurrence with the Minister of Finance, and are updated periodically.

Application Process

Applications for pioneer status are handled by the Malaysian Investment Development Authority (MIDA). Companies can apply for pioneer status for multiple activities or products.

Grant of Pioneer Status

The status is granted based on the fulfillment of certain criteria and is subject to conditions specified in the approval letter.

Pioneer Certificate

Companies must apply for this within 24 months of pioneer status approval. It certifies the company as a pioneer company, identifies the pioneer factory, and states the production day.

Withdrawal and Cancellation

Pioneer status can be withdrawn or canceled if the company fails to comply with terms and conditions.

Tax Relief Period

Typically five years from the production day, during which part or all of the statutory income from the pioneer business is exempt from tax. Extension of Tax Relief Period: Companies can apply for an extension of another five years.

Tax Treatment

The ruling details the tax treatment of pioneer companies, including basis periods, computation of pioneer income, and capital allowances.

Pioneer Company Losses

Statutory income of a pioneer business will be fully or partially exempted, but subject to deductions for losses.

Separate Accounts

Companies must keep separate accounts for the pioneer and any other business activities.

Source :

Public Ruling 10/2023 Pioneer Status Incentive https://www.hasil.gov.my/media/wrqhhbta/pr-10-2023-pioneer-status-incentive.pdf

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What is the capital gains tax in 2024 Malaysia?

What is the capital gains tax in 2024 Malaysia?
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(Tax Update) Capital Gain Tax: Filing Deadline

Introduction

Effective from 1st January 2024, company, limited liability partnership, trust body, and co-operative society which receives gains or profits from the disposal of capital assets consisting of:

  1. share of a company incorporated in Malaysia not listed on the stock exchange; or

  2. share of a controlled company incorporated outside Malaysia that owns real property situated in Malaysia or shares of another controlled company or both,

are subject to Capital Gains Tax (CGT) under the Income Tax Act 1967.

Exemption Period

Any disposal for the period of 1st January 2024 to 29th February 2024 is exempted from Capital Gains Tax under The Income Tax (Exemption) (No. 7) Order 2023.

The taxpayer is not required to submit a tax return for the disposal of that capital asset within the above period.

Responsibility of Taxpayers on CGT

Chargeable persons according to the provisions of section 66 to section 75B are responsible for submitting CGT tax returns.

The appointed representatives are responsible for submitting CGT tax returns on behalf of the taxpayer. The representatives are assessable and chargeable to tax and the payment of tax charged.

A licensed tax agent under section 153 of the ITA 1967 can be appointed to submit CGT tax returns.

CGT Filing and Tax Payment Deadline

Taxpayers are to submit CGT tax returns and make tax payments within sixty days of the date of disposal.

For assessments raised under sections 91, 96A, and subsections 90(3), 101(2) of ITA 1967, the tax / balance of tax shall be paid within 30 days from the date of assessment. Nevertheless, a grace period of 7 days is given

Tax Return

Taxpayers are required to submit tax returns through e-Filing (e-CKM Form). Kindly visit MyTax portal at https://mytax.hasil.gov.my to access e-CKM Form from 1st March 2024.

Taxpayers shall have a Tax Identification Number (TIN) and Digital Certificate to access e-CKM.

Past Blog on CGT

Read our past blog on CGT

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What Is The Surcharge For Transfer Pricing (TP) Malaysia?

What Is The Surcharge For Transfer Pricing (TP) Malaysia?
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(Tax update) What Is The Surcharge For Transfer Pricing (TP) Malaysia?

Surcharge 5%

With effect from 1 January 2021, the IRBM may impose a surcharge of up to 5% on any increase in income or reduction of any deduction / loss arising from these adjustments.

A surcharge is imposed on a Transfer Pricing (TP) adjustment made under Section 140A of the Income Tax Act 1967 (ITA) which results in an increase in income or a reduction of any deduction or loss. When any taxpayer does not comply with the arm’s length principles, a surcharge will be imposed on that adjustment regardless of whether the taxpayer is in a loss position or a tax exempt company.

The imposition of surcharge of up to 5% on any transfer pricing adjustment under Section 140A(3C) was released on 18 January 2024 in Frequently Asked Question (FAQ) in IRBM website.

Key Takeaways of the FAQ

Surcharge on incorrect transfer prices

Starting from January 1, 2021, the IRB can impose a surcharge of up to 5% on any transfer pricing adjustments. This applies even if the adjustment doesn’t result in additional tax payable, affecting loss-making or tax-exempt companies.

Application of surcharge

The surcharge applies to tax audits initiated from January 1, 2021, onwards, regardless of the financial year being audited. Only a surcharge will be imposed in cases where transfer pricing adjustments result in additional income, not a penalty for submitting an incorrect return.

Non-appealability of surcharge

The surcharge, which is not a tax, cannot be appealed through legal processes but only to the Director General of Inland Revenue on a case-by-case basis.

Penalties for not furnishing documentation

Failure to provide contemporaneous transfer pricing documentation within 14 days of request can result in penalties ranging from RM20,000 to RM100,000, and potentially a prison term of up to six months.

Mutually Exclusive with Section 113 (2)

The FAQ states that the surcharge is mutually exclusive with the penalty under Section 113(2).

What is the new TP rule in Malaysia?

The documentation must be prepared before the due date for submitting income tax returns and must include the date of completion.

The IRB scrutinizes various aspects like sales/purchase margins, profitability, intragroup services, and intragroup financing. Lack of benchmarks, consistent losses, and insufficient supporting documents are some of the red flags.

Even companies enjoying tax holidays or incurring losses must adhere to transfer pricing rules, as any adjustments by the IRB will attract a surcharge.

Taxpayers are advised to scrutinize their related company transactions to ensure compliance with the arm's length principle to avoid penalties and fines.

Failure to provide contemporaneous transfer pricing documentation within 14 days of request can result in penalties ranging from RM20,000 to RM100,000, and potentially a prison term of up to six months.

The transfer pricing scene in Malaysia is rapidly evolving, and taxpayers are advised to stay informed and compliant to avoid severe penalties and fines.

Sources

IRBM : FAQ on TP 18/1/2024

https://www.hasil.gov.my/media/w0ag5bsp/faq-on-matters-arising-from-subsection-140a-3c-ita-1967.pdf

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Real Property Company Tax 2024

Real Property Company Tax 2024
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(Tax update) Real Property Company (RPC) under Capital Gain Tax (CGT)

What is an RPC?

A Real Property Company (RPC) in the context of Malaysian tax law is typically a company whose primary business is dealing with real property, such as land or buildings. This can include activities like buying, selling, developing, or renting real estate.

Technically speaking, we use 75% of the value of the company’s total tangible assets as benchmark to define RPC .

Tax Treatment of RPCs:

Traditionally, gains or profits from the disposal of shares in Malaysian RPCs were subject to Real Property Gains Tax (RPGT) under Paragraph 34A, Schedule 2 of the Real Property Gain Tax Act 1976.

However, with the introduction of Capital Gains Tax (CGT), there have been amendments to these provisions.

Tax Computation and Formula:

The specific computation and formula for the taxation of RPCs under RPGT would depend on various factors such as the period of holding the property, the nature of the gains (capital or income), and specific exemptions or relief available.

Typically, RPGT is calculated based on the difference between the acquisition cost and the disposal price of the real property or shares in the RPC. The tax rates range from 0% to 30% depending on the factors mentioned above.

Challenges in RPC Tax Computation (Past) and Taxpayer Preferences

Previously, calculating taxes for Real Property Companies (RPCs) in Malaysia was complex due to complicated Real Property Gains Tax (RPGT) rules. Factors like how long the property was held, various exemptions, and the property's market value made the process challenging.

This complexity led many Malaysian taxpayers to consult lawyers instead of tax agents for RPGT issues, believing lawyers were better suited to handle the legal aspects of property taxes.

We HATE RPC companies as most of them trust lawyers than us.

Summary of Income Tax (Exemption) (No.7) Order 2023:

This order provides an exemption from income tax on gains or profits from the disposal of shares in unlisted Malaysian companies between 1 January 2024 and 29 February 2024.

This exemption does not apply to gains or profits taxable as business income under section 4(a) of the Income Tax Act 1967.

For RPC shares, traditionally subject to RPGT, there seems to be a ''2-month tax holiday period'' due to the CGT exemption and the lack of simultaneous reversal of amendments in RPGTA.

Our Comments on RPC Shares

Before CGT, gains from disposal of shares in Malaysia were considered capital gains and not subject to income tax.

With CGT's implementation, RPGT on gains from disposal of RPC shares by companies, LLPs, trust bodies, or co-operative societies (except Labuan entities) is not applicable from 1 January 2024.

However, due to the 2-month CGT exemption on unlisted shares and no simultaneous amendment reversal in RPGTA, there's a temporary ''tax holiday'' for gains from RPC shares disposals.

Past Blog

Capital gain tax https://www.ktp.com.my/blog/malaysias-budget-2024-capital-gain-tax-part1/23nov23

Exemption Period on CGT https://www.ktp.com.my/blog/capital-gain-tax-malaysia-2024/04jan24

What is the compensation for late refund of overpayment of tax?

What is the compensation for late refund of overpayment of tax?
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{Tax Update} Compensation of Late Tax Refund 2%

2% Compensation

Recently many taxpayers received an email from IRB on the approval of a 2% compensation payment for delayed refund of overpaid income tax. The payment, processed by an approved bank in Malaysia, follows a formula under subsection 111D(2) of the Income Tax Act 1967.

It also includes a legal disclaimer indicating that the Director-General of Inland Revenue retains the right to recover the payment if it's found to have been made erroneously or based on the taxpayer's incorrect information.

Operational Guideline Updates: Compensation on Late Refund of Overpayment of Tax

Updated on 21 May 2021 from IRB, this guideline is to clarify payment of compensation for late refund of overpayment of tax made by IRB. under Section 111D of the Income Tax Act 1967 (ITA).

What are the criteria for compensation?

It's imperative to submit the income tax return form accurately and comprehensively by the specified deadline, or within any extended timeframe granted by the Inland Revenue Board (IRB).

The deadlines are as follows:

  • Individuals with employment income: Submission is required by April 30th.

  • Individuals with business income: The deadline is set for June 30th.

  • Companies, Limited Liability Partnerships, and Societies: Submissions should be made within seven months following the day after the business's accounting period concludes.

Type of tax payment eligible for tax refund

Only the following type of payment will get a tax refund:

  • PCB: Monthly tax deduction

  • CP500: Installment Payment Notice

  • CP204/CP205: Estimated Tax Payable by Companies/Limited Liability Partnership/Society

Timelines of calculation of compensation

The compensation is calculated on a daily basis, starting from the first day after the period stated below:

  • via E-filling: After 90 days from the submission deadline

  • via post/courier: After 120 days from the submission deadline

How to calculate?

Compensation of 2% shall be paid in accordance with the following formula:

𝑻𝒂𝒙 𝒓𝒆𝒇𝒖𝒏𝒅 ×𝑻𝒐𝒕𝒂𝒍 𝒏𝒐.𝒐𝒇 𝒅𝒂𝒚𝒔 𝒍𝒂𝒕𝒆 𝟑𝟔𝟓/𝟑𝟔𝟔 𝒅𝒂𝒚𝒔 × 2%

Taxpayers who are not eligible to be paid compensation

  • Tax returns submitted after the due date in accordance with the ITA.

  • Tax set off under Section 110 of the ITA is in excess of tax payable.

  • Assessment raised by IRB under Sections 90(3), 91, 91A, 92 and 96A of the ITA.

  • The taxpayer applied for an extension of time for the submission of the tax return.

  • There's an appeal against the assessment.

  • There is an additional tax payable from IRB audit during the 90 or 120 days from the submission deadline.

  • The excess tax paid is not from installment payments under Sections 107, 107B and 107C of the ITA.

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Personal Tax Relief 2023 Malaysia

Personal Tax Relief 2023 Malaysia
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{Tax Update} Personal Tax Relief 2023 Malaysia

Personal Relief Year Assessment 2023

Welcome to the latest insights on Personal Tax Relief for the year 2023, brought to you by KTP , Malaysia's trusted authority in auditing and tax services.

As we navigate the complexities of the new tax year, understanding the updated tax reliefs can significantly impact your financial planning. From 'Family and Dependent Care' to 'Lifestyle and Technology' benefits, our comprehensive guide dives deep into the six (6) essential categories of tax deductions available for Malaysian taxpayers.

Whether you're a working professional, a parent, or planning for your future, stay informed with KTP's expert analysis and strategies to maximize your tax savings this year.

royalty withholding tax malaysia

royalty withholding tax malaysia
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{Tax Update} Withholding Tax on Royalties

Latest Development on Royalties

In a significant development impacting cross-border software and intellectual property transactions, the Inland Revenue Board (IRB) has recently issued Practice Note No. 3/2023 dated 5th December 2023.

This document provides essential clarifications on the tax treatment of copyright and software payments made by distributors and resellers to non-residents.

This update highlights the categorization of such payments as royalties, bringing them under the purview of withholding tax as per Section 109 of the ITA, thereby affecting numerous businesses engaged in digital transactions and software distribution.

Key Takeaway of PN 3/2023 Tax Treatment on Copyright and Software Payments by Distributor & Reseller to Non-Resident

  • The payments for the use or right to use copyright and software, even when modified, exploited, or distributed, are considered royalties.

  • These royalties are subject to withholding tax under section 109 of the Income Tax Act 1967, especially when paid to non-residents who do not have a permanent establishment in Malaysia.

  • This applies regardless of the rights granted to the distributor or reseller.

  • Reference should be made to Double Taxation Avoidance Agreements for specific cases.

     

Drafted PR on Tax Treatment Regarding Royalties for Payment of Software to a Non-Resident on October 2023

Key points include:

Definition of royalties and service fees:

Royalties are defined as payments for the purchase or use of, or the right to use, an application, including purchases where the intellectual property belongs to the original owner.

Service fees, on the other hand, refer to payments for services provided by the non-resident, such as developing relevant functions for the payer's use.

Withholding tax implications:

Royalty payments to non-residents are subject to withholding tax under section 109 of the Income Tax Act 1967. This is a critical point as failure to comply with withholding tax requirements can result in significant penalties.

Payments considered service fees fall under a different category and are subject to withholding tax under section 109B of the ITA.

Consequences for non-compliance:

If a payer fails to deduct and remit the required withholding tax, the unpaid amount will increase by 10%, becoming a government debt.

Additionally, payments that are not compliant with withholding tax requirements may be disallowed as expenses in the taxpayer's tax computation.

Relief and appeal processes

The ruling also discusses relief and appeal processes in cases where taxpayers believe their software royalties' tax treatment is incorrect. This could involve Double Taxation Avoidance Agreements (DTA) and domestic tax laws.

Consult a tax professional opinion to examine the transaction and understand the potential implications.

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Transfer Pricing 2023

Transfer Pricing 2023
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{Tax Update} Malaysia's 2023 Transfer Pricing Rules Update: Navigating New Challenges

Latest Development on Trans Pricing (TP) Rules 2023

The technical update on the changes in Transfer Pricing (TP) ruling in Malaysia from the TP Rules 2012 to TP Rules 2023 highlights several key areas where modifications have been made.

Here's a refined comparison and outline of the changes:

Definition of CTPD (Controlled Transaction Pricing Documentation)

TP Rules 2012: Defined as documentation created during the development or implementation of a controlled transaction and updated for material changes.

TP Rules 2023: Redefined to emphasize documentation prepared before the due date of a tax return in the year a controlled transaction is entered.

Timeline to Furnish the CTPD

TP Rules 2012: No specific timeline for furnishing CTPD upon request.

TP Rules 2023: CTPD must be available within 14 days upon request by the Malaysia Inland Revenue Board (MIRB).

Content of CTPD

TP Rules 2012: Lacked requirements for including MNE Group information, detailed business information, completion date, and applicability indication.

TP Rules 2023: Mandates inclusion of extensive MNE Group information, detailed business information guidance, completion date, and indications of inapplicable information.

Definition of Arm’s Length Range

TP Rules 2012: No definition, but practice often used the 25th to 75th percentile range.

TP Rules 2023: Defined as a range or a single figure between the 37.5th to 62.5th percentiles of the benchmarking data set.

TP Adjustment

TP Rules 2012: Silent on adjustment specifics within or outside the arm’s length range.

TP Rules 2023: Allows MIRB to adjust to the median if outside the range, and to the median or above if within the range under certain conditions.

Selection of the Most Appropriate TP Method

TP Rules 2012: A hierarchy-based selection of TP methods with no power for the Director General to revise the taxpayer's selected method.

TP Rules 2023: Removes the hierarchy of methods and gives the MIRB authority to replace the taxpayer's chosen method if deemed inappropriate.

Key Points to Note for Taxpayers on TP Rules 2023:

Documentation Timeliness:

The new rules emphasize the need for timely preparation and submission of CTPD, which must now be done before the tax return due date and made available within 14 days upon request.

Detailed and Comprehensive Reporting:

There is a heightened requirement for comprehensive and detailed information in the CTPD, including specific business and group information.

Arm's Length Range Precision

The definition of the arm's length range is more precise, potentially affecting the analysis of transfer pricing and the range within which transactions should fall.

TP Adjustment Clarity

The 2023 rules clarify how adjustments should be made, giving the MIRB more authority in adjusting to the median, thereby reducing ambiguity and discretion.

Flexibility in Method Selection

The removal of the method hierarchy suggests a more flexible approach to selecting the most appropriate TP method, while also granting the MIRB the power to intervene if necessary.

These changes indicate a move towards more stringent, precise, and potentially more administratively burdensome TP requirements. Companies dealing with controlled transactions in Malaysia must adapt to these changes to ensure compliance and effective management of transfer pricing risks.

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Malaysia's Budget 2024: Watch The Summary on YouTube

Malaysia's Budget 2024: Watch The Summary on YouTube
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Malaysia's Budget 2024: Watch The Summary on YouTube

In line with the Budget for 2024, Malaysia is poised for significant changes in its taxation landscape, particularly in the realm of Capital Gains Tax (CGT). The proposed amendments are expected to impact various sectors and types of taxpayers.

Budget 2024 Highlight - YouTube Video

Stay updated with the latest tax developments by watching our key summary of the 2024 Budget on our YouTube channel https://youtu.be/BrYNZNfJ1iE

Here's a summary of the key takeaways:

Budget 2024 Highlights - Past Updates

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

Companies : https://www.ktp.com.my/.../malaysias-budget-2024.../18oct23

Tax Exemptions : https://www.ktp.com.my/.../malaysias-budget-2024.../19oct23

Tax Incentives : https://www.ktp.com.my/.../malaysias-budget-2024.../20oct23

Stamp Duty & Indirect Tax https://www.ktp.com.my/.../malaysias-budget-2024.../23oct23

Payroll (EPF & SOCSO) https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-epf-socso-updates/24oct23

Others https://www.ktp.com.my/blog/malaysias-budget-2024-others-important-updates/26oct23

Capital Gain Tax https://www.ktp.com.my/blog/malaysias-budget-2024-capital-gain-tax-part1/23nov23

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Capital Gain Tax 2024

Capital Gain Tax 2024
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Malaysia's Budget 2024: A Glimpse into Capital Gain Tax Updates (Part I)

In line with the Budget for 2024, Malaysia is poised for significant changes in its taxation landscape, particularly in the realm of Capital Gains Tax (CGT). The proposed amendments are expected to impact various sectors and types of taxpayers.

Here's a summary of the key takeaways:

1. Types of Capital Asset

The new proposed CGT focuses on

1.1 Capital assets situated in Malaysia :

• Unlisted shares of companies Incorporated in Malaysia

• Shares in foreign incorporated companies deriving value from real property in Malaysia

1.2 All types of capital assets situated outside Malaysia

2. Eligible Taxpayers

There are 4 categories listed below:

  • Company

  • Limited Liability Partnership (LLP)

  • Cooperative

  • Trust Body (including unit trusts)

3. Effective date

1 January 2024

The Ministry of Finance (MOF) has clarified the effective date of capital gains tax (CGT) imposition:

  • CGT is to be imposed with effect from 1 January 2024 as indicated in the Finance Bill (No. 2) 2023.

  • Notwithstanding the above, the imposition of CGT on gains or profits from disposal of local companies’ unlisted shares will commence from 1 March 2024. This will be implemented through subsidiary legislation.

4. Tax Rate

4.1 Shares acquisition date :

• Before 1 March 2024 * :

The taxpayers may choose either

• 10% on the net gain of the disposal of shares; or

• 2% on the gross sales value.

• From 1 March 2024 *

10% on the net gain of the disposal of shares ;

4.2 All types of capital assets situated outside Malaysia are based on the prevailing income tax rate of the taxpayer.

• Companies, LLP’s and trust bodies: 24%

• Co-operative : 0% to 24%

*See clarification from MOF from Effective date under Point #3 as above

5. Exemptions

Transactions exempted from CGT

  • Initial Public Offering (IPO) approved by Bursa Malaysia; and

  • Restructuring of shares within the same group.

  • Venture capital companies

  • Gains from disposal of foreign capital assets from outside Malaysia which meet economic substance requirement (ESR)

  • Individual

6. Date of Disposal and Acquisition

There are 2 points in time to determine the date of disposal and acquisition

  • With a written agreement: Date of the agreement

  • Without a written agreement: Date of completion of the disposal

7. Basis period

Reporting must be done for each disposal transaction.

8. Allowable expenses

Expenses related to the acquisition or disposal of capital assets such as stamp duty, legal fees, broker fees and commission fees. It is important to keep track of these expenses related to the acquisition or disposal of capital assets.

9. Losses

Taxpayers are allowed deductions from the same sources. Any unabsorbed capital losses can be carried forward for a limited period of 10 years.

10. Tax reporting

Submission of the prescribed form through e-filing within 60 days from the date of disposal.

11. Tax payment

Any payment should be made within 60 days from the date of disposal, emphasizing the need for timely compliance.

12. Profits Derived from Foreign Sources

The following conditions apply:

  • Exemptions are given on remittances that meet the economic substance requirements;

  • Gains from the disposal of shares by a controlled company incorporated outside Malaysia.

13. Deemed to be acquired from Malaysia

Shares in a company will be considered acquired from Malaysia if it owns:

  • real estate located in Malaysia; or

  • shares in another controlled company; or

  • both

where the market value of the real estate or shares or both is more than 75% of the value of its tangible assets.

In conclusion, these proposed changes to Malaysia's Capital Gains Tax system are expected to have a far-reaching impact on businesses, investors, and various taxpayers. Staying informed, seeking professional advice, and ensuring compliance will be key to navigating this evolving tax landscape effectively.

Budget 2024 Highlights - Past Updates

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

Companies : https://www.ktp.com.my/.../malaysias-budget-2024.../18oct23

Tax Exemptions : https://www.ktp.com.my/.../malaysias-budget-2024.../19oct23

Tax Incentives : https://www.ktp.com.my/.../malaysias-budget-2024.../20oct23

Stamp Duty & Indirect Tax https://www.ktp.com.my/.../malaysias-budget-2024.../23oct23

Payroll (EPF & SOCSO) https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-epf-socso-updates/24oct23

Others https://www.ktp.com.my/blog/malaysias-budget-2024-others-important-updates/26oct23

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{Tax Update} IRBM e-Invoice Guideline 2.1

{Tax Update} IRBM e-Invoice Guideline 2.1
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{Tax Update} e-Invoice Guideline 2.1

Latest Development on e-Invoice

The Inland Revenue Board (IRB) has issued updated e-Invoice Guidelines, including:

  • e-Invoice Guideline (version 2.1)

  • e-Invoice Specific Guideline (version 1.1)

Key updates in the guidelines: e-Invoice Guideline (version 2.1):

  • Removed references to non-business transactions between individuals.

  • Revised implementation timeline:

    1. 1 August 2024 - Mandatory for taxpayers with an annual turnover/income exceeding RM100 million.

    2. 1 January 2025 - Mandatory for taxpayers with an annual turnover/income between RM25 million and RM100 million.

    3. 1 July 2025 - Mandatory for all other taxpayer categories.

Key updates e-Invoice Specific Guideline (version 1.1):

  • Requires service tax amount inclusion in self-billed e-Invoices for imported taxable services.

  • Extends the deadline for issuing e-Invoices for foreign income received in Malaysia from the same month to the end of the following month.

Reference to Past Blog on e-Invoice

Source

Guidelines are accessible on IRB's website: www.hasil.gov.my (Home > e-Invoice)

IRB e-Invoice version 2.0 https://www.hasil.gov.my/media/nofmzbk1/irbm-e-invoice-guideline-version-20.pdf

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Malaysia's Budget 2024: A Glimpse into Others’ Important Updates

Malaysia's Budget 2024: A Glimpse into Others’ Important Updates
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Malaysia's Budget 2024: A Glimpse into Others’ Important Updates

Budget 2024 introduces a wide range of financial reforms set to have a substantial impact on various sectors. These proposals are geared toward maintaining the fiscal responsibility of the nation while promoting economic growth.

In this last blog post, we will delve into the remaining key highlights of this budget to understand the changes and their implications

1. Capital Gains Tax (CGT)

As we approach 2024, a notable update is in the works concerning Capital Gains Tax (CGT) in Malaysia. This tax reform is set to affect the disposal of unlisted shares and aims to strike a balance between fiscal responsibility and economic growth.

Key Details:

• Disposal of unlisted shares

• Rate

• Except for

i. Initial Public Offering (IPO) approved by Bursa Malaysia; and

ii. Restructuring of shares within the same group.

• Effective from 1 March 2024

2. High-Value Goods Tax

Another significant development on the horizon is the introduction of the High-Value Goods Tax in Malaysia. This tax targets specific luxury items, such as jewellery and watches, and may influence your financial decisions.

Key Details:

• Specific high-value items (eg. jewellery and watches)

• Rates of 5% to 10%

• Based on the threshold value of good price

3. E-invoice

Embracing modern technology and digital solutions is a crucial step forward in the world of taxation. E-invoice, an electronic invoicing system, is set to bring substantial changes to how businesses manage their financial transactions. To accommodate this significant shift and ensure a smooth transition for taxpayers, the Government has introduced an extension to the enforcement timeline.

Key Details:

• Mandatory implementation for businesses with an annual income or sales exceeding RM100 million, beginning 1 August 2024.

• Second phased enforcement for other categories, with comprehensive implementation starting from 1 July 2025.

• Expanded usage of Tax Identification Number (TIN) to support e-invoice.

4. Conditions for Institutions/ Organisations/ Funds approved under Subsection 44(6) of Income Tax Act 1967 (ITA)

In the ever-evolving landscape of taxation, the Government has undertaken a review of the conditions governing institutions/ organisations/ funds approved under Subsection 44(6) of the ITA. These changes are designed to ensure compliance and promote transparency in the utilisation of accumulated funds for business activities.

Key Details:

• Reviewed the conditions:

i. Increase in the accumulated funds utilisation limit in business activities from 25% to 35%

ii. 2 options to continue with the benefits of the incentives:

iii. Consequences of breaching conditions and its impact on tax exemption

- DGIR will not withdraw the approval under subsection 44(6) for institutions/organisations/funds during the validity period.

- for any breach of conditions within the approval period, the institutions/organisations/funds will not be eligible for tax exemption

- DGIR will raise tax assessment on all income received by the institutions/organisations/funds in the YA the breach of conditions occurred.

• Effective Date From the year of assessment 2024.

5. Preferential tax rate

To boost the Malaysian film industry and attract foreign film production companies, actors, and crews, the government is introducing a preferential tax rate scheme

Key Details:

• For foreign film production companies, actors and crews filming in Malaysia

• Between 0% to 10%

In summary, as the nation looks forward, these changes are expected to contribute to a stronger and more secure future.

Budget 2024 Highlights - Past Updates

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

Companies : https://www.ktp.com.my/.../malaysias-budget-2024.../18oct23

Tax Exemptions : https://www.ktp.com.my/.../malaysias-budget-2024.../19oct23

Tax Incentives : https://www.ktp.com.my/.../malaysias-budget-2024.../20oct23

Stamp Duty & Indirect Tax https://www.ktp.com.my/.../malaysias-budget-2024.../23oct23

Payroll (EPF & SOCSO) https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-epf-socso-updates/24oct23

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Malaysia's Budget 2024: Stamp Duty and Indirect Taxes Updates

Malaysia's Budget 2024: Stamp Duty and Indirect Taxes Updates
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Malaysia's Budget 2024: A Glimpse into Stamp Duty and Indirect Taxes Updates

The budget 2024 encompasses a range of proposals that touch upon stamp duty and indirect taxes, critical elements of the country's fiscal framework.

Let's dive into the key highlights of these proposals, exploring how they will impact property ownership, service tax, and more, while striving to strike a balance between economic growth and citizens’ welfare

Stamp Duty

1. Transfer of property ownership by renunciates of rights

The proposal involves a review of the stamp duty rate imposed when a beneficiary renounces their right to another eligible beneficiary in accordance with a will/ Faraid, or the Distribution Act 1958. This change aims to replace the current ad valorem duty rate under Item 66(c) of the First Schedule of the Stamp Act 1949.

Key Details:

• A fixed duty of RM10 will be imposed

• Effective from 1 January 2024 for instrument of property ownership transfer.

2. Property ownership by non-citizen

The Budget 2024 introduces a crucial review of the stamp duty legislation, specifically focusing on properties owned by foreign-owned companies and non-citizen individuals in Malaysia. The existing policy treats these property owners the same as Malaysian citizens when it comes to the ad valorem stamp duty rate imposed during the transfer of property ownership.

This review is integral to a more comprehensive strategy aimed at controlling property prices in the country. By reassessing the stamp duty structure for foreign-owned properties and non-citizen individuals, the government intends to create a fair and competitive property market.

Key Details:

• A flat rate stamp duty of 4% be imposed on the instrument of transfer executed by foreign-owned companies and non-citizen individuals (except Malaysian permanent residents)

• Effective from 1 January 2024 for instrument of property ownership transfer.

Indirect Taxes

1. Service Tax

The government acknowledges the importance of increasing revenue while gradually reducing subsidies. To achieve this goal, it has proposed measures to broaden the country's revenue sources without overburdening the citizens. Although these measures are challenging, the government is considering an increase in the service tax rate and an expansion of its scope to encompass various industries.

Key Details:

• Increased from 6% to 8% except for telecommunication and food & beverage

• Expanded the scope to include logistics, brokerage, underwriting and karaoke services

2. Import Duty and Sales Tax Exemption on Manufacturing Aids

This proposal is poised to bring about a notable transformation in our industries, significantly boosting the competitiveness of Malaysian-manufactured products. It signifies a shift from the existing policy where manufacturers are not entitled import duty and sales tax exemptions on the importation and locally purchased of manufacturing aids under the Customs Act 1967 and the Sales Tax Act 2018.

Key Details:

• eligible to manufacturers on the importation and locally purchased of manufacturing aids

• subject to types of industry and category of goods determined

• Effective from 1 January 2024

3. Entertainments Duty Exemption

To support the development of the national creative industry, strengthen cultural unity, and foster family bonding, the Minister of Finance is proposing a series of exemption rates under the Entertainment Duty Act of 1953.

Key Details:

• Entertainment held in the Federal Territories

• Propose types and rate

i. Full exemption for stage performances by local artists

ii. Reduction from 25% to 10% for

 stage performance by international artist/ light show/ Circus

 film screening (Cinema) / theatre

 exhibition/ Zoo/ Aquarium

 sport event/ e-sports/ bowling/ snooker/ pool/ billiard/ karaoke

iii. Reduction from 25% to 5 % for theme parks, family recreation centre, indoor gaming centre, and simulators

• Applications received by the Ministry of Finance from 1 January 2024 to 31 December 2028

4. Excise Duty

In the interest of public health and the well-being of our citizens, particularly with a focus on preventing diseases such as diabetes and obesity, there are 2 proposals to raise the excise duty rate:

i. Sugar sweetened beverages

• Increased to RM0.50 per litre

• Effective From 1 January 2024

ii. Chewing tobacco

• Imposed a rate of 5% + RM27/kg under the tariff code 2403.99.5000.

• From 1 January 2024

In summary, the proposed changes in stamp duty and indirect taxes are part of a broader strategy to steer the nation towards greater economic prosperity while ensuring fairness and inclusivity in various sectors. As these policies take effect, it will be fascinating to see how they shape the future of Malaysia's economy and the lives of its people.

Budget 2024 Highlights - Past Updates

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

Companies : https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-companies-updates-/18oct23

Tax Exemption https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-tax-exemption-updates/19oct23

Tax Incentive : https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-tax-incentives-updates/20oct23

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Malaysia's Budget 2024: A Glimpse into Companies Updates

Malaysia's Budget 2024: A Glimpse into Companies Updates
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Malaysia's Budget 2024: A Glimpse into Companies Updates

The budget for the year 2024 was presented by Prime Minister and Finance Minister YAB Dato’ Seri Anwar Bin Ibrahim on 13th October 2023 and it includes proposals related to the Companies

Key summary on Budget 2024 for Companies under Deductions and Capital Allowance:

A) Tax Deduction

1. Environmental, Social and Governance (ESG) related expenditures

• Up to RM50,000 per YA

• Introduces related expenditures incurred to comply with ESG standards

• Applicable from YA 2024 to YA 2027

2. Cost of Sustainable and Responsible Investments (SRI) sukuk approved by the Securities Commission (SC)

• Extended from YA 2024 until YA 2027 (4 years)

3. Rental of non-commercial EV

• Up to RM300,000

• Extended from YA 2025 until the YA 2027 (2 years)

4. Contributions for Environmental Preservation and Conservation projects

• Involves contributing to or sponsoring activities related to tree planting projects or environmental preservation and conservation awareness projects verified by the Forest Research Institute Malaysia (FRIM)

• Applications received by the Ministry of Finance from 1 January 2024 to 31 December 2026

5. Voluntary Carbon Market

• Up to RM300,000

• Covers costs incurred on the Development and Measurement, Reporting and Verification (MRV) related to the development of carbon projects.

• Tax deduction against income from carbon credits traded on Bursa Carbon Exchange (BCX).

• Registered with an international standards body recognised by Bursa Malaysia and expenditure on development of carbon projects must be certified by the Malaysia Green Technology and Climate Change Corporation (MGTC)

• Applications received by the MGTC from 1 January 2024 until 31 December 2026

B) Capital Allowance

1. ICT equipment and computer software

• Revised to initial allowance (IA) at 40% and annual allowance (AA) at 20%

• Claiming period is shortened from 4 years to 3 years

• Effective from YA 2024

2. Industrial Building Allowance (IBA) – Private Nursing Home for Senior Citizens

• AA at 10% on the total cost of buildings purchased or built, including renovation costs.

• Approved by the Ministry of Health Malaysia (MOH)

• Expenditure incurred from 01 January 2024 to 31 December 2026

In summary, the Budget 2024 proposal for companies primarily focuses on environmental protection to encourage more private sector contributions through projects or community initiatives.

Budget 2024 Highlights - Others

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

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e-Invoice Guideline 2.0

e-Invoice Guideline 2.0
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{Tax Update} e-Invoice Guideline 2.0

Latest Development on e-Invoice

The Inland Revenue Board of Malaysia (IRB) has updated its electronic invoice (e-Invoice) guidelines. Version 2.0 of the e-Invoice Guideline and a new Specific Guideline on e-Invoicing were released on September 29, 2023. A full 116-page document providing further guidance on specific areas of e-invoicing.

Key Changes to e-Invoice Guideline (Version 1.0 to Version 2.0):

Exempted Individuals/Entities

All individuals and legal entities must comply with e-invoice requirements, except for government, Rulers, local authorities, statutory authorities and statutory bodies, consular officers and diplomatic officers and facilities provided by the government, government bodies and government facilities such as clinics, multipurpose halls, etc.

These persons and authorities do not need to issue e-invoices, but their suppliers must issue e-invoices.

Companies listed on the stock exchange will be exempted from issuing e-invoices for dividend payments.

Consolidated E-Invoices

Businesses dealing with consumers need not issue an e-invoice on every sale. They can provide normal invoices to the customers. Such businesses can issue a consolidated invoice for the particular month, and this has to be done within seven days after the month’s end.

Consumers who require an e-invoice can request an e-invoice within the month of the purchase.

Suppliers can issue consolidated e-invoices monthly for specific B2C transactions exempt from e-invoicing for end consumers.

Certain activities, like motor vehicle sales, flight tickets, luxury goods, and construction contractors, require mandatory e-invoices.

E-Invoice Treatment

Invoices issued by the person registered under the e-invoicing system has to be validated or rejected by the purchaser within 72 hours. Otherwise, the invoice becomes final. In the event of a dispute, the only way to reverse the transaction is to issue a credit note and another invoice for the revised amount.

E-invoice treatment varies for disbursements or reimbursements.

Self-billed e-invoices apply to foreign suppliers, payments to agents, dealers & distributors, dividend distribution, e-commerce transactions, and acquisitions from individual taxpayers.

Exemptions for employment income, pension, alimony, certain dividends, zakat, and scholarships.

Transmission Mechanisms

Two e-invoice transmission mechanisms: MyInvois Portal hosted by IRBM and Application Programming Interface (API).

API configuration to be included in the Software Development Kit (SDK) expected in Q4 2023.

Foreign Income

E-invoices are required for all foreign income received in Malaysia from outside the country, serving as proof of income and expenses for tax purposes.

Data Fields

51 data fields, with some concessions for individual buyers, must be completed to issue an e-invoice.

Validated e-invoices include IRBM Unique Identifier Number, validation date, time, link, and QR code.

Previous Updates on E-Invoicing

  • E-Invoicing Malaysia - Transition Challenges and Strategies https://www.ktp.com.my/blog/e-invoicing-malaysia-transition-challenges-and-strategies/17aug23

  • Are you ready for e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-are-you-ready/10aug23

  • The coverage of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-coverage/3aug23

  • The timeline of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-timeline/2aug23

  • The workflow of e-Invoicing https://www.ktp.com.my/blog/e-invoicing-malaysia-the-workflow/31jul23

Source

IRB e-Invoice version 2.0 https://www.hasil.gov.my/media/nofmzbk1/irbm-e-invoice-guideline-version-20.pdf

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OASB vs. Director General of Inland Revenue

OASB vs. Director General of Inland Revenue
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OASB vs. Director General of Inland Revenue

Overview compensation from the compulsory acquisition of land

Taxation can become a complex matter, especially when it involves components like compensation from the compulsory acquisition of land. In Malaysia, the tax treatment for compensation received from compulsory land acquisition can be scrutinized under various legal and regulatory frameworks. Below is a general outline of the tax treatment.

Tax Treatment of Compensation Received:

1. Determination of the Nature of Receipt:

Capital Receipt: Generally, if the land was used for investment purposes or was a capital asset, the compensation might be considered a capital receipt.

Revenue Receipt: If the land was utilized in a business, or the act of acquiring and selling lands was a business in itself, the compensation might be treated as revenue receipt.

2. Applicable Legislation:

Income Tax Act (ITA) 1967: Compensation is scrutinized under various sections of ITA to determine its taxability.

Section 4(a): Concerns the taxability of gains or profits from a business.

Section 4(f): Often pertains to other sources of income not categorized under sections 4(a) to 4(e).

3. Calculating Taxable Gain:

Real Property Gains Tax (RPGT) Act 1976: If compensation is considered a capital receipt, it may be subject to RPGT which is imposed on gains from the disposal of real property.

Compensation may need to be adjusted for enhancements and modifications made to the land to calculate the precise taxable amount.

Case Overview:

Join us in dissecting a compelling tax case involving OASB and the Director General of Inland Revenue (DGIR), revealing the trending tax, legal, and financial impact on compensation received from the compulsory acquisition of land.

Background

OASB, utilizing a rented shop lot for its audio-video business from 2004 to 2017, received RM2,341,817 as compensation due to government acquisition under Section 16 of the Land Acquisition Act 1960. However, the waters muddied when the DGIR issued a Notice of Additional Assessment along with a penalty, pursuant to Section 113(2) of the Income Tax Act (ITA) 1967.

Taxpayer's Argument

OASB fervently argued that the compensation should be categorized as a capital receipt, with a two-pronged rationale:

The compensation intended to restore the taxpayer’s position, based on the replacement cost at the time of compulsory acquisition.

The involuntary suspension of business activities during the acquisition resulted in a consequential loss of sales and profits.

DGIR’s Perspective

In opposition, the DGIR insisted it was a revenue receipt, taxable under Section 4(f) of ITA 1967, justifying that:

OASB lacked ownership rights over the land and building being compensated.

Section 4(f) of ITA 1967 broadly encompasses gains or profits outside the scope of Sections 4(a) to 4(e) for tax purposes.

Verdict from the Special Commissioners

Ultimately, the Special Commissioners of Income Tax sided with the DGIR, rejecting OASB's appeal and upholding the Notice of Additional Assessment along with its penalty.

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Failure to Furnish Information within a Stipulated Period

Failure to Furnish Information within a Stipulated Period
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(Tax Update) : Failure to Furnish Information within a Stipulated Period

Overview

Taxation constitutes a fundamental pillar of the Malaysian economy, and the Inland Revenue Board of Malaysia (IRBM) assumes a pivotal role in upholding tax law compliance. One of its key functions involves conducting tax audits to verify the accuracy of income reporting and tax payments by taxpayers.

Public Ruling No. 3/2015 is a comprehensive guide that outlines taxpayer obligations. It covers record-keeping, the need for timely information submission, and the consequences of non-compliance. In this article, we delve into the insights offered by this crucial Public Ruling, providing clarity on Malaysian taxpayers' responsibilities.

Key takeaways:

You will understand:

• How to secure deduction claims?

• What types of supporting documents that IRBM has the power to call?

• Who holds the responsibility for maintaining records and supporting documents?

• What are the consequences of failing to furnish documents within the prescribed timeframe?

• Can the taxpayer apply for an extension of time with IRBM?

Summary of learnings:

How to secure the deduction claims?

Taxpayers must submit specific supporting documents within the prescribed timeframe as set out by the IRBM in the notice issued under section 81 of the Income Tax Act 1967 (ITA).

What types of supporting documents that IRBM has the power to call?

IRBM has the authority to request various supporting documents, including books of accounts, invoices, vouchers, receipts, and any other records specified by IRBM.

Who holds the responsibility for maintaining records and supporting documents?

Taxpayers are responsible for keeping financial records and documents for seven years from the end of the year of assessment in which the Income Tax Return Form (ITRF) is furnished.

What are the consequences of failing to furnish documents within the prescribed timeframe?

Failure to provide requested documents within the stipulated time may result in the disallowance of claimed expenses for tax deduction under subsection 39(1A) of the ITA.

Can the taxpayer apply for an extension of time with IRBM?

Yes, taxpayers can apply for an extension of time from IRBM, provided the application is made before the stipulated timeframe expires and valid reasons are provided.

The approval status and details of the application will be issued in the form of a notice by IRBM.

Source:

Public Ruling No. 3/2015: Failure to Furnish Information within a Stipulated Period

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(Tax Update) : Use Of e-WHT For WHT Payment

(Tax Update) : Use Of e-WHT For WHT Payment
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(Tax Update) : Use Of e-WHT For WHT Payment

IRB Public Annoucement

The Inland Revenue Board of Malaysia has issued a media release dated 30 August 2023 on encouraging the use of electronic withholding tax (e-WHT) for WHT payment on its website.

From 1 January 2023, HASiL started this e-WHT system to make tax payments simpler.

e-WHT is one of the e-taxation services which is compulsory to be used online in stages with effect from 1 September 2023. Taxpayers will have to use it step by step, starting 1 September 2023.

How to e-WHT

Payment of WHT through e-WHT will use the Bill Number as a payment reference which can be made through the FPX method at the HASiL Payment Portal (ByrHASiL) or can be accessed via the MyTax Portal https://mytax.hasil.gov.my.

e-WHT enables proof of receipt of payment to be issued directly and data to be received directly by HASiL as soon as payment is made.

Taxpayers who wish to make WHT payments through e-WHT need to access the system by first logging in using their MyTax identification (ID) information for access at ezHasil Services > eWHT. A Bill Number will be generated automatically after the form is successfully submitted online with complete information.

KTP Thoughts

The Inland Revenue Board of Malaysia will mandate the use of e-services through the MyTax portal in stages from 1 September 2023. This is in line with the government’s digitalisation of service delivery systems, with full implementation expected by 1 January 2024.

Taxpayers are advised to switch to online services for all transactions, including online payment methods, to ensure that the transactions are safe and in order.

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(Tax Update) : Special Voluntary Disclosure Programme 2.0 guidelines

(Tax Update) : Special Voluntary Disclosure Programme 2.0 guidelines
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(Tax Update) : Special Voluntary Disclosure Programme 2.0 guidelines

IRB Public Annoucement

Based on IRB website, 22 August 2023, The Inland Revenue Board of Malaysia (IRB) may now conduct tax audits/investigations on the year of assessment the voluntary disclosure is made.

If the voluntary disclosure is made on non-transfer pricing matters only and the IRBM finds there is a risk of transfer pricing issues, a tax audit/investigation can be performed.

Conversely, if the taxpayer makes a voluntary disclosure of transfer pricing matters only, a tax audit/investigation can be performed on non-transfer pricing issues.

In the previous Special Voluntary Disclosure Programme 2.0 guidelines, a tax audit/investigation can only be carried out if the taxpayer fails to make the voluntary disclosure payment within the stipulated period.

In Taxpayers' Words

If you only report non-transfer pricing problems but IRB finds transfer pricing issues, IRB can still investigate those transfer pricing issues.

Similarly, if you only report transfer pricing problems, IRB can look into other unrelated issues.

KTP Thoughts

The implication for taxpayers is that even if they voluntarily disclose issues in one area, they could still be investigated for problems in other areas they didn't disclose.

This means taxpayers should be thorough and transparent in all areas to reduce the risk of audits or investigations.

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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

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An internal community for our colleagues on work and leisure.

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An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

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(Tax Update) : The Appointment of Representative for Company Director

(Tax Update) : The Appointment of Representative for Company Director
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(Tax Update) : The Appointment of Representative for Company Director

Overview of Tax Representative

The introduction of these new functions and guidelines emphasizes the importance of adapting to the digital era, ensuring that company representatives are adequately equipped, and maintaining the integrity of tax submissions. It also showcases the commitment to streamline processes while ensuring that appropriate checks and balances are in place for accountability.

Key Takeaways

From 1 January 2023, taxpayers who have the role of Company Director in MyTax can appoint a representative online.

The appointed representative must have a Tax Identification Number (TIN) and an Individual Digital Certificate.

IRBM has the right to obtain a letter of appointment as a Representative using the letterhead of the company or organization signed by the Board of Directors of the company/organization in question.

IRBM has improved the functions of the Director and Representative Director's roles in MyTax as follows:

i. Appointment of representatives by the Director in MyTax is unlimited. However, the Director shall be responsible for the appointment of the representative;

ii. Directors and representatives in the same appointment hierarchy can make data entry and access the e-Form in the same assessment year;

iii. The appointed representative is only allowed to check and make data entry. The system will not allow the representative to send and sign the e-Form;

iv. The submission and signature of the e-Form can only be done by taxpayers who have the role of Company Director in MyTax in accordance with the provisions of Section 75(1) of the ITA 1967;

v. The system will only save the latest data input. Therefore, the Director needs to ensure that the data is in order before submitting and signing the relevant e-Form;

vi. This function applies to e-C and e-PT for Year of Assessment 2022 and 2023. It will be extended to all types of e-Forms for the specified assessment year in stages.

Final Words

In conclusion, the introduction of a framework for appointing representatives in MyTax represents a commendable stride forward in streamlining and modernizing our tax processes.

By clearly outlining the procedures, duties, and responsibilities of representatives, we ensure not only efficiency but also maintain the highest standards of accountability and transparency.

This move undeniably reaffirms our commitment to fostering a user-centric, efficient, and transparent tax system for the benefit of all stakeholders involved.

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  • Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

#Thk

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