Tax and Secretarial Fee Tax Deduction Malaysia 2020

Tax and Secretarial Fee Tax Deduction Malaysia 2020
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New rules are coming to town!! Changes in tax treatment of secretarial and tax filing fees.
 

Overview

On 18.09.2020, the IRB had issued a technical guideline on tax deductions for secretary and tax agent fees effective from YA2020.

Key takeaway

  • What is the current practice (YA 2019 and before)?
  • Changes in year 2020 onwards
  • What is the secretarial fee?
    • Deductible
    • NOT deductible
  • What is tax filing fees?

Summary of learning

What is current practice (YA 2019 and before)?

Expenses incurred on secretarial and tax filing fees give a tax deduction of up to RM5,000 and RM10,000 respectively for each year of assessment (YA).

Changes in year 2020 onwards

Secretarial and tax filing fees being combined, such that a total deduction of up to RM15,000 per YA be allowed for both expenses from YA 2020 onwards.

Scenario:

ABC Sdn. Bhd. has received following invoices for financial year end is 31 December 2020 and made payment as follows:

What is the secretarial fee?  

Secretarial fee charged in respect of secretarial services to comply with the statutory requirements under the Companies Act 2016 is deductible as follows:

  • Lodgement of annual return and Financial statements.
  • Change of name
  • Add or delete business activities
  • Retainer fees
  • Issuance or transfer of shares
  • Update register of members and directors
  • Appointment of director or auditor

*Condition to be made: Must be incurred and paid

General secretary charges NOT deductible:

  • Incorporation fee for new company (include professional fees)
  • Fee for acquisition of shelf company (include professional fees)
  • Name search fee to SSM (include professional fees)
  • Preparation of registration documents
  • Company profile printout from SSM
  • Professional fee for preparation of ordinary/ special resolution
  • Professional fee for preparation of other resolution, confirmation letter to bank or solicitor
  • Professional fees for preparation of trust deed
  • Preparation fees for CTC documents
  • Attestation fees for commissioner for Oaths

 What is tax filing fee?

A tax agent approved under the Income Tax Act 1967 (ITA) in respect of services provided for the:

  • Preparation and submission of income tax returns
  • Estimate of tax payables

A person in respect of services provided for the preparation and submission of returns in the prescribed form for the purposes of:

  • Section 26 of the Sales Tax Act 2018
  • Section 26 of the Service Tax Act 2018
  • Section 19 of the Departure Levy Act 2019; or
  • Section 19 of the Tourism Tax Act 2017

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THK Management Advisory Sdn Bhd

Wisma THK, No. 41, 41-01, 41-02, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru, Johor, Malaysia.
+6012-771 7903
+607-361 3443
 
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