IRB has issued an updated FAQ on Deferment of Tax Instalment Payment under PEMERKASA dated 28 June 2021.

The updated FAQ to allow companies which are not in the tourism sector to also apply for deferment of instalment payments.

The FAQs refer to the application for deferment of CP204 (a monthly instalment of tax estimates) and CP500 (bi-monthly instalments for individuals) for taxpayers whose business codes fall outside of the specified business codes which relate to tourism.

Taxpayers which businesses are affected, may submit an application for deferment to the IRB, supported with the relevant documents to:

• cp204pemerkasa@hasil.gov.my for applications for deferment of CP204 instalment payments for the months of April 2021 to December 2021

• cp500pemerkasa@hasil.gov.my or to the IRB branch handling the case, for applications for deferment of CP500 instalment payments for the months of May, July, September and November 2021.

• Or talk to us if we are your tax agent

Applications will be considered based on the merits of each case.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

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𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

Key takeaway

You will understand:

1. What is Monthly Tax Deduction (MTD)?

2. Who is eligible to treat MTD as Final Tax?

3. What is the requirement?

4. Any application needed?

5. What is the consequence of non-compliance?

Summary of learning

1. What is Monthly Tax Deduction (MTD)?

Monthly tax deduction is also known as “Potongan Cukai Bulanan (PCB)”.

This is a deduction mechanism for employer to deduct the employee's monthly remuneration for the purpose of paying the employee's income tax.

2. Who is eligible to treat MTD as Final Tax?

Taxpayers who have employment income only and MTD has been deducted are given an option for not to submit the Income Tax Return Form (ITRF) via e-Filing or manually.

3. What is the requirement?

· There is only employment income received in the current year including any previous year’s employment income.

· Served with the same employer.

· Taxes are not borne by the employer.

· Husband or wife does not make the choice to be assessed jointly under Section 45 of the Income Tax Act 1967.

· MTD is deducted in accordance with the Income Tax (Deduction From Remuneration) Rules 1994 and included Benefit in Kind(BIK) and Value of Living Accommodation (VOLA).

4. Any application needed?

Taxpayer who meets the requirements and does not submit the ITRF after the due date:-

· will be deemed to choose not to file the ITRF

· the MTD will be deducted against the tax payable for the year of assessment

· no tax refund can be claimed if there is any excess of tax paid in his MTD

5. What is the consequence of non-compliance?

The Director General of Inland Revenue (DGIR) retains the power to disregard the total amount of MTD deducted as the final tax payable and raise a deemed assessment or an additional assessment penalty as followings: -

· Imposed the penalty under subsection 112(3) of the Income Tax Act 1967

· Raise an estimated assessment under Subsection 90(3) of the Income Tax Act 1967

Sources

Layanan Cukai Ke Atas Cukai Muktamad - http://phl.hasil.gov.my/pdf/pdfam/NA_1_2021.pdf

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

延税攻略 - 终极版 2021 

Read the full story in our blog
https://www.ktp.com.my/blog/tax-deadline-extension-2021-chinese/27june2021

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

Extension of time (EOT) for tax filing and payment

Inland Revenue Board Malaysia (“IRBM”) has updated the 2021 Return Form Filing Programme on 26 June 2021.

A 2-month grace period has been given for the submission of the tax returns for the following group of taxpayers:-

Personal tax

For the submission of Forms B, P, BT, M, MT, TF, TP and TJ (individuals, partnerships, associations, deceased persons’ estate and Hindu Joint Families who carry on business) as well as for the payment of the balance of tax payable (if any) for the year of assessment (“YA”) 2020 :

Statutory deadline : 31/06/21

Extended deadline : 31/08/21

Company tax

For the submission of Forms C, C1, PT, TC, TA, TR and TN (companies, cooperative societies, limited liability partnerships and trust bodies) as well as for the payment of balance of tax payable (if any) for the accounting periods ending 1 October 2020 to 31 January 2021

Kindly refer to the below for the extended deadline.

Source :

IRB anncoucement http://phl.hasil.gov.my/pdf/pdfam/ProgramMemfailBN_2021_Pin.3_2.pdf

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

How to apply pin number for e-filing?

Step 1:

Visit LHDN customer feedback via https://maklumbalaspelanggan.hasil.gov.my/MaklumBalas/en-US/

Step 2:

Select “Application”

Step 3:

Download the form

-CP55D for individual registration

-CP55B for organization registration

Step 4:

Click “Next”

Step 5:

Fill in the information required:

a) Sender information

b) Taxpayer information

Step 6:

a) Fill in the info at “Feedback category”

b) Upload CP55D (individual) or Upload CP55B (organization)

Step 7:

Click “Submit”

Step 8:

Receive “Submission Number”

Step 9:

Check the “feedback status” with the submission no. and NRIC after 7 working days

Step 10:

Received the “No.Pin e-Filing” by email

Step 11:

Select the link and Click “Log kali Pertama” https://ez.hasil.gov.my/ci/Login.aspx?page=14

Step 12:

Fill in the “No Pin e-Filing” and NRIC No.

Step 13:

Click “Hantar” and you will need to reset your own “password”

You can log in to LHDN website through your password now!!

Source:

Applying for the e-Filing pin number http://lampiran1.hasil.gov.my/pdf/pdfam/TatacaraPermohonanNoPineFiling_2.pdf

User Manual No. Pin Application & First Time Login https://ez.hasil.gov.my/ci/Panduan/PanduanCI_PermohonanNoPIN_e%20V1.2.pdf

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

Overview

Taxpayers are allowed to make amendment on the information or assessment for the submitted Tax Return Form(TRF) under Section 77B of the Income Tax Act 1967 (ITA 1967) or Section 30B of Petroleum (Income Tax) Act 1967 (PITA 1967) by using the Amended Return Form (ARF).

Key takeaway

You will understand:

• Rules of submission

• Terms for submission

• Rate of increase in tax

• Method of submission

Summary of learning

Taxpayers are allowed to make amendment when there is:

• Understate of income / unreported income

• Expenses over claimed

• Capital allowances / incentives/ relief over claimed

The amendment limit to once for a year of assessment.

The amendment is disallowed if the Director General of Inland Revenue (DGIR) has made amended assessment for the submitted TRF.

What are the terms for submission ARF?

ARF must be submitted within 6 months from the due date of TRF

A duly completed ARF must state:

• the amount / additional amount of chargeable income

• the additional tax payables

• the amount of tax payable on the tax which has or would have been wrongly repaid;

• the increased sum ascertained in accordance with subsection 77B (4) of ITA 1967 or subsection 30B(4) of ITA 1967;

• other contains required by the DGIR.

What is the rate of increase in tax?

The additional tax payable amount in ARF is subject to an increase in tax of 10%.

The formula = the amount of such tax payable or additional tax payable x 10%.

The total tax payable amount must be paid at the same date of ARF is submitted.

What are the methods for submission ARF?

ARF can be submitted in the following ways:

• Online e-filing (only for corporate taxpayer: Form C)

To visit https://mytax.hasil.gov.my > click e-Filing > click e-Form > choose e-BNT C

• Manual filing

  - download ARF on Lembaga Hasil Dalam Negeri (LHDN) website:

  To visit http://www.hasil.gov.my > Forms > Download Forms (in Malay Version) > Handle the completed ARF to LHDN branch

Sources

GPHDN 1/2020: - Procedure on submission of Amended Return Form

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

免费线上分享交流 : 我如何在KTP 半工半读考完 ACCA 圆满结束 with 100%.

活动日期 ：6月23日

时间 ：11.15am to 12.15pm

地点 ：𝐙𝐎𝐎𝐌 线上学习

观看完整视频在我们 KTP 的 Youtube 频道中

https://bit.ly/3vNNW84

很棒与 60 名参者来学习 with our speaker Ms. Cyma & Mr. Arthur Yong. 我们集体讨论 :

• 为什么选择ACCA？

• 读ACCA 课程的目的是什么？

• 什么动力驱使你要考 ACCA?

• 你花了多少时间来完成 ACCA课程？

• 哪一张 ACCA 科目你认为最棘手的？

• 最難的 paper 是哪一張？怎麼應付？

• 每天复习多少小时？

• 你们是怎样在考试前做最快最有效的复习？

• 请问你们是如何决定要拿哪两张 optional paper 的呢(p4 -p7)？

• 请问你们是如何在考试失利后调试心情继续下去的呢？

• 请问是什么样的意志力让你们不放弃 ACCA 就算fail了几次?

• 请问考试失利之后是有继续 register 课程 / revision class 吗？亦或是选择自己复习之后再报名考试呢？？

• 你怎么安排这半工半读的时间？

• 如何管理工作和学习之间的压力？

• 工作经验对你的 ACCA考试有帮助吗？

• 完成 ACCA 课程后有什么大改变或影响吗？

• ACCA 有没有帮助到你的工作?

• 你会建议边工作边学习 ACCA吗？

当然，我们的 Moderator 兼老板也问了几个问题 :

• 我的英语不好我可以通过ACCA吗?

• 如果我的 ACCA 不及格，我的下一步行动是什么?

• 正常年龄通过ACCA是多少？

• KTP 没有淡季。你是如何安排学习时间的？

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

人力资源部有推出了一款手机应用程序 APP Working For Workers (WFW)

政府推出这款APP，是为了保护与促进国内员工的权利与福祉。员工一旦遭遇雇主剥削或不合理对待时，能够直接在APP内向大马劳工局(TK)举报.

Working For Workers (WFW) 应用程式，让员工可以针对雇主涉嫌违反现有劳工法律的行为，向劳工局作出投诉.

WFW有14项投诉类别，包括毫无通知下解雇、雇员薪金未达最低薪金标准、雇主拖延薪金、无年假、无聘雇合约、无产假、无加班费、无公共假期, 雇主不支付解雇金, 雇主不遵守 1990 年工人住房和设施法案(The Workers' Minimum Standards of Housing and Amenities Act 1990)的最低标准, 雇主不遵守 2012 年最低退休年龄法案, 非法扣减工资等等，供举报者选择.

Google Play或者Apple Store搜寻WFW这款APP，下载安装后，就能根据步骤去举报雇主.

这款APP将允许员工匿名去举报，让员在不必担心身分暴露下进行投诉.

劳工局在接获投报后，预料3至7天内就会受理投诉.

Visit us

• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

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

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our external community for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

#KTP

#KTP lifestyle

#KTPcareers

政府随时可以捉老板, 如果老板不做这些 HR 事...

其实马来西亚有很多关于雇主的法律, 老板必须知道 & 跟.

缴纳 Sosco

强制性要求雇主向社会保险机构进行注册. 为员工登记成为社险会员.按月为员工向社险机构缴纳保费.

社会保险机构将对有关雇主开出500至4000令吉的罚单。若雇主不认罪或者不缴纳罚款，案件可以被带上法庭审理。若法庭判定有罪，雇主将会面对每一名员工罚款不超过1万令吉的处分，若重犯，则罚款不超过5万令吉或监禁不超过5年.

缴纳就业保险EIS

就业保险计划是于2018年1月1日实施.违规雇主将会被开出不多于5000令吉罚款.若无法及时还清，将被提控上庭并面对最高1万令吉罚款、监禁不超过2年或两者兼施的刑罚。

缴纳公积金EPF

1991年雇员公积金法令第43(2)条文，该法令规定所有雇主必须在每月15日或之纳雇员公积金，一旦罪成，将判处不超年监禁或不超过1万令吉的罚款，或两者兼施。

最低薪金制

从2020年开始，全马56个主要城市的最低薪金为1200令吉.

在最低薪金(修正)法令下，违例的雇主若罪成，可被罚款不超过1万令吉(每位雇员).若雇主继续违规，他们每日可被罚款不超过1000令吉。此外，若雇主再犯，罚款将提高至不超过2万令吉或监禁不超过5年.

雇主不可以现金支付员工薪水

根据马来西亚1955年劳工法第25A(1)条文有明文规定，所有薪金必须通过银行户头发给员工，而以现款发薪属于违例。

如果要以现金发薪，雇员必须签署一封要求现金发薪的信给雇主，并得到批准，否则就属抵触1955年劳工法令25A(1)条文.

缴纳 HRDF 人力资源发展基金

Human Resource Development Fund (HRDF) 缴纳率介于员工月薪的 0.5-1%. 其目的是为了提高人力资本的素质，栽培一流的员工.

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Sad to see so many companies close down with many people are retrenched and unemployed in this pandemic. Is it right?

With the implementation of conditional movement control MCO 3.0, one of the key tax concerns that businesses will face during this period is the tax treatment of bad debts.

This tax question has become increasingly common “Should taxpayers use legal action to recover any debts for tax purposes?”.

Let’s talk about the bad debts written off in a tax perspective :

What is debts

Debts that are allowed as a deduction in ascertaining the adjusted income of a business is a trade debt that is irrecoverable either wholly or partly. Such debt is written off as bad. Trade debt is a debt that arises from the sales of goods or services and has been included in the gross income of the business.

Reasonable consideration under S34(2) of the ITA

Reasonable consideration should be taken before writing off a trade debt as bad and then allowed as a deduction in ascertaining the adjusted income of a business.

Reasonable steps to recover the debt should be taken before any decision is made to write off the debt. Subsection 34(2) of the ITA allows a trade debt which is reasonably estimated to be irrecoverable either wholly or partly, to be deducted from gross income in computing the adjusted income of the business

Inland Revenue Board Malaysia Public Ruling 4/2019 Tax Treatment of Wholly and Partially Irrecoverable Debts & Debt Recovery

Public Ruling No 4/2019 states bad debt is defined as a debt that is considered not recoverable after appropriate steps have been taken to recover it.

Public Ruling No 4/2019 described the basis of writing off a debt as bad and the actions to be taken to recover the debt as well as the evidence to prove such actions have been taken.

Determination Of Bad Debt

The bad debts written off are allowed as deduction, if:

* The debt is a debt that arises from the course of carrying on a business (i.e. trade debt).

* Trade debt shall be included in the gross income prior to the relevant YA.

Circumstances when a debt can be considered as irrecoverable

Debts which are irrecoverable become bad (either wholly or partly) when all reasonable steps have been taken to recover such debt. As long as there are any other reasonable steps for recovery , such debt cannot be written off as bad.

After reasonable steps for recovery as in paragraph 5.3.1 have been taken, a debt can be considered as wholly irrecoverable or bad on the occurrence of any one of the followings:

* Trade debt cannot be recovered.
* The debtor has died
* The debtor is a bankrupt
* The debt is statute-barred
* The debtor cannot be traced despite various attempts
* Any other circumstances where there is no likelihood of cost effective recovery

Reasonable steps have been taken to recover the trade debt:

All reasonable steps based on sound commercial considerations should be taken to recover the debt.

To support a claim for deduction of a bad debt written off for tax purposes, there should be sufficient evidence of such steps taken, including one or more of the following:

* Issuing reminder notices
* Debt restructuring scheme
* Rescheduling of debt settlement
* Negotiation or arbitration of a disputed debt
* Legal action

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Frustrated when IRB adds back your bad debts in a tax audit.

Time is bad, pandemic cause bad debts to rise. Learn IRB official guidelines on bad debt tax treatment.

Why?

Bad debt is always our tax authority focus area. 100% guarantee !

Let’s learn this tax case on IRB fight on bad debts: Quality Concrete Holdings BerhadvsKetua Pengarah Hasil Dalam Negeri.

In YA 2004, Quality Concrete Holdings Berhad (QCHB) claimed for tax deduction on bad debts of RM608,731.25 (balance of value work done: RM950,000.00). IRB disallowed the deduction on bad debts written off and imposed a penalty under Section 113(2) of the Income Tax Act 1967 (ITA 1967).

IRB argued that:

QCHB did not recognised the value of work done (i.e. RM950,000.00) as gross income for the year of assessment (YA) 1999 up to YA 2004.

Therefore, the deduction of bad debt should be disallowed according to Section 24 and 34 of ITA 1967:

“The amount of the debt shall be treated as gross income of the relevant person from the business

for the relevant period.”

QCHB argue …

The claim amount had been reported under the trade debtors account in the Balance Sheet as at 31.01.1998 for YA 1999.

The claim for the bad debt should be allowable according to Section 24(1)(b) of ITA 1967:

“any services rendered at any time in the course

of carrying on a business.”

QCHB argued it is a trade debt arising in respect of carrying on a business irrespective of where and how the sum of RM950,000.00 was entered and described in the account.

QCHB had acted in good faith and the impugned assessment involved technical interpretation. Thus, penalty should not be imposed.

The decision from the court :

Agreed with IRB tax treatment on deduction of bad debt is disallowed under Section 34(2) of the ITA 1967.

Technical interpretation and good faith are not valid defenses for penalty under Section 113(2) of ITA 1967.

Thus, the penalty imposed under Section 113(2) of ITA 1967 is correct because QHCB had filed an incorrect return and gave incorrect information.

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Auditor! Can I don't charge depreciation in my account this year as my company makes loss due to Covid?

I need to borrow money from the bank?

Key summary from the MPERS Section 17 of MPERS -Property, Plant and Equipment

An entity shall allocate the initial cost of the asset …and depreciate …separately over its useful life.

With some exceptions, such as quarries and sites used for landfills, land has an unlimited useful life and therefore is not depreciated.

The depreciation charge for each period shall be recognised in profit or loss…

Depreciation of an asset begins when it is available for use, ie when it is in the location and condition ….

Depreciation of an asset ceases when the asset is derecognized.

Depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated

Auditor opinion :

You still have to charge depreciation in the account!

But …

You can try the following methods and change

* Useful life of assets

* Financial year-end

* Name of company

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𝐂𝐨𝐦𝐩𝐞𝐧𝐬𝐚𝐭𝐢𝐨𝐧 𝐫𝐞𝐜𝐞𝐢𝐯𝐞𝐝 𝐨𝐧 𝐜𝐨𝐦𝐩𝐮𝐥𝐬𝐨𝐫𝐲 𝐨𝐟 𝐥𝐚𝐧𝐝 𝐟𝐫𝐨𝐦 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐢𝐬 𝐭𝐚𝐱𝐚𝐛𝐥𝐞?

Overview of compulsory acquisition of land.

Compulsory acquisition is the power of the government to acquire private rights in a land without the willing consent of its owner or occupant in order to benefit society.

The compensation amount of acquisition is determined by the government.

𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:

You will understand: -

1. Criteria to meet compulsory acquisition of land

2. Tax treatment on compulsory of acquisition of land-based on real tax case

𝐒𝐮𝐦𝐦𝐚𝐫𝐲 𝐨𝐟 𝐥𝐞𝐚𝐫𝐧𝐢𝐧𝐠𝐬:

Compulsory acquisition of land did not fall under the gross income unless the taxpayer when obtaining the said land had knowledge that it would be acquired by the government.

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐜𝐫𝐢𝐭𝐞𝐫𝐢𝐚 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐜𝐨𝐦𝐩𝐮𝐥𝐬𝐨𝐫𝐲 𝐚𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐥𝐚𝐧𝐝?

1.There is no intention to sell the land.

2. During the purchase of the land, the owner should not aware of any government’s intention to acquire the land.

Tax treatment on compulsory acquisition of land-based on real tax case: Penang Realty Sdn. Bhd. v. Ketua Pengarah Hasil Dalam Negeri

A parcel of land was compulsorily acquired by the Government in August 1980 and was paid the sum of RM1,035,762.91 as compensation. IRB is claiming tax for the said compensation.

Penang Realty Sdn. Bhd. didn’t agree. The acquisition was compulsorily acquired and there is no intention to trade the land.

IRB argument - Gain on the disposal of land is taxable under section 4 of the Income Tax Act 1967 (ITA).

The decision by The Court

The proceeds received were not subject to income tax as the Company is no intention to trade the land and it was the compulsory acquisition of land.

𝐒𝐨𝐮𝐫𝐜𝐞𝐬:

http://lampiran2.hasil.gov.my/pdf/pdfam/PREALTYvsKPHDN.pdf

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Why do auditors keep asking company’s lawsuit status? Why is it so important?

You know the lawsuit is a very slow and irritating one! How I know!

What is the difference between ‘Provision’ and ‘Liability’?

Provision: a liability of uncertain timing or amount.

Liability:

- present obligation as a result of past events

- settlement is expected to result in an outflow of resources (payment)

Provision :

3 criteria are required to be met before a provision can be recognised. These are:

- There needs to be a present obligation (legal/ contractual) from a past event

- There needs to be a reliable estimate (best estimate/ expected value)

- There needs to be a probable outflow (high chance)

What is the difference between ‘Contingent liability’ and ‘Contingent asset’?

These two categories should only be disclosed in financial statements but not recognised in accounts.

Contingent liability :

- a possible obligation depending on whether some uncertain future event occurs, or

- a present obligation but payment is not probable or the amount cannot be measured reliably

Contingent asset :

- a probable asset that arises from past events, and

- whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Example

Contingent Liability:

- Pending lawsuit, product warranty or pending investigation

- The outcome is unknown

- If possible to lose, disclose a contingent liability

- If probable to lose, recognise the provision

Contingent Asset :

- Pending lawsuit, insurance claim

- The outcome is probable

- If probable to receive income (by lawyer or insurance company), disclose contingent asset

- If virtually certain to receive income (subsequently proof by supporting), recognise asset

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• Duration under company constitution expires
• A resolution (majority of shareholders) is passed in general meeting
• Triggering event stated in the company constitution & resolution pass in general meeting
• Special Resolution (3/4 majority of shareholders)

We are one-stop (years+ history) audit, tax, secretarial, accounting, and payroll firms that commit to help and grow our client's business.

Our Inland Revenue Board (IRB) has issued an updated version of the FAQ dated 3 June 2021 (after the original FAQ dated 2 June 2021).

Take note of the key updates before the FAQ changes again in view of the anticipated extension of lockdown.

Notification of new employee (Form CP22)
Submission of the Form CP22 can be made through the Customer Feedback Form
on the IRB’s Official Portal.

Tax clearance letter
Tax clearance letter will be processed after all documents and information are furnished completely.
The application for the tax clearance letter can be submitted through:
1. e-SPC
2. the Customer Feedback Form on the IRB’s Official Portal.

Tax estimates (Form CP204) & Notification of change in an accounting period (Form CP204B)
Application for extension of time (EOT) for the above forms is no longer required as EOT is now given until 31 July 2021 for submission of the above forms.

Revised tax estimates (Form CP204A & Form CP502)
Application for EOT for the above forms is no longer required with EOT already given until 31 July 2021 for submission of the above forms.

Deferment of tax payment (Form CP204 & Form CP500)
Tourism, Cinema and Spa industries
The deferment of payment of CP204 (monthly installment of tax estimates) and CP500 (bi monthly installments for individuals) will apply for taxpayers with business activities under the tourism, cinema and spa industries.

These taxpayers will be identified based on the business code from their latest income tax returns filed with the IRB.

The deferment will be provided automatically to the eligible taxpayers.

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