Last Market Day Closing Prices 2008

Last Market Day Closing Prices 2008

http://www.klse.com.my/website/bm/market_information/market_statistics/equities/downloads/closing_prices2008.pdf

IRB: New system is not mandatory

KUALA LUMPUR: The new schedular tax deduction system will not be mandatory and will give flexibility to employers.

Inland Revenue Board (IRB) chief executive officer Datuk Hasmah Abdullah said employers could choose to submit their tax exemptions monthly, twice a year or any other number of times per year.

“They can also maintain the status quo of submitting once a year."

“It is not mandatory to have adjustments made monthly,” she told a press conference yesterday.

She said this in relation to The Star’s frontpage report on the IRB’s new STD system that would take effect from Jan 1.

The new system is aimed at overcoming the problem of over-deductions.

She said there is a STD calculator on the IRB website that could help them determine the correct amount to be deducted.

IRB revenue management department director, Mohammad Sait Ahmad, said an e-STD application was also being developed that would assist employers in computing automatically how much they would have to deduct.

Meanwhile, the Malaysian Airlines System Employees Union (Maseu) has called on the IRB to come up with a better solution to solve the problem of tax over-deduction.

It said it should not pass the buck to employees and employers.

Forms For EPF Members To Contribute At 11% Available From Today

Members of the Employees Provident Fund (EPF) who wish to maintain the employee’s monthly contribution rate at 11 per cent from January 2009 wage may obtain Form KWSP 17A (AHL) Khas from all EPF branches or download it from myEPF website beginning today. Fully completed forms can be submitted to the members’ respective employers for onward submission to the EPF.

The EPF has also made available Form KWSP 17AA (AHL) Khas to facilitate employers who wish to apply on behalf of more than two employees.

Deputy Prime Minister and Finance Minister YAB Datuk Seri Najib Tun Abdul Razak recently announced the reduction of the employees’ monthly statutory contribution rate from 11 per cent to 8 per cent, effective from January 2009 wage for a period of two years. The measure is taken to help increase members’ disposable income given the current economic climate. The higher disposable income will in turn support domestic consumption and help sustain the momentum of positive economic growth.

In relation to reduction in the statutory contribution rate which will take effect from January 2009 wage to December 2010 wage, a new monthly contributions schedule has been issued. Members and employers may download the new schedule from our website or get the schedule from any of our branches nationwide effective today.

Hurry! save your tax before year ends

In less than a month the year will come to end. If you have not use up your tax reliefs for 2008 you better act now to save your tax. Below is the tax reliefs for individuals (malaysian only), with applicable terms & conditions:-


1. RM1,000 for purchasing books, magazine, journal (except newspaper). If you dont read books then buy them as gift for others.

2. RM3,000 for computer purchase for every 3 years only.

3. RM 300 for purchase of sports and exercise equipment such as all types of racquets and balls, treadmill, exercise bike and airwalker.

4. RM6,000 for both EPF & life insurance.

5. RM3,000 for education & medical insurance.

6. RM5,000 for medical checkup (RM500 max) & medical expenses to treat serious illness/disease for you, your spouse or kids. Both combined, limits to RM5,000.

7. RM5,000 for parents medical expenses includes (treatment, nursing & dental-subject to terms & condition).

8. RM5,000 for personal education (there is a limitation on type of education tho). Go upgrade yourself. Take advantage by paying the fees by 2008.

Act today to maximize your tax savings.

Opportunities in Australian Services Market

1) Information and Communication Technology (ICT)

Australia’s ICT Industry is one of the most innovation and dynamic sectors of the Australian economy. Australia is the 11th largest ICT market in the world and one of the top three ICT markets in the Asia Pacific. Opportunities exist for Malaysian companies to partner with Australian firms in areas of:

-E-Commerce and secure online payments
-Banking and e-security
-Systems integration and consultancy services
-Electronic services delivery
-Out-sourcing services, i.e. application service providers
-Customer relationship management and computer telephony integration
-Smart card technologies and ticketing
-IT education and training
-E-Learning

2) Infrastructure Projects

The Australian government had recently revealed 94 approved projects, including port upgrades, rail lines and road improvements across Australia to be implemented in the next few years. The Australian Government will partly fund some of the projects out of the $12.6 billion Building Australia Fund.

For further information, please email sydney@matrade.gov.my

Guidelines on Unabsorbed losses and CA carried forward

DASAR DAN GARIS PANDUAN
UNTUK MEMBENARKANKERUGIAN TERKUMPUL DAN ELAUN MODAL YANG
TIDAK DISERAP DIBAWA KE HADAPAN


1. PENGENALANMulai tahun taksiran 2006, kerugian terkumpul dan elaun modal yang tidakdiserap oleh sesebuah syarikat tidak lagi dibenarkan dibawa ke hadapanapabila terdapat perubahan 50% atau lebih dalam pemegangan ekuitinya.


2. DASAR

2.1 Kementerian Kewangan melalui suratnya bertarikh 7 Disember 2007telah menggantikan dasar dan garis panduan yang dikeluarkannyapada 21 April 2006, mengenai peraturan untuk membenarkankerugian larasan perniagaan yang terkumpul serta elaun modal yangtidak dapat diserap dibawa ke hadapan untuk dibenarkan diserapdalam tahun taksiran itu dan dalam tahun-tahun taksiran berikutnyaselaras dengan kuasa Menteri di bawah seksyen 44(5D) danperenggan 75C, Jadual 3, Akta Cukai Pendapatan 1967. Dasarbaharu ini dianggap berkuatkuasa mulai tahun taksiran 2006, adalahseperti berikut:

Sesebuah syarikat yang mengalami perubahan sebahagianbesar dalam pemegangan syer (iaitu 50% atau lebih) adalahdibenarkan membawa ke hadapan kerugian larasanperniagaan terkumpul dan elaun modal yang tidak diserapuntuk diserap dalam tahun taksiran itu dan dalam tahun-tahuntaksiran seterusnya KECUALI perubahan sebahagian besarpemegangan syer yang berlaku dalam syarikat dormant.

2.2 Bagi tujuan ini, Kementerian Kewangan juga telah memberikan definisisyarikat dormant seperti berikut:

Sesebuah syarikat dianggap sebagai dormant jika tidakmempunyai sebarang transaksi akaun yang signifikan dalamsatu tahun kewangan sebelum berlakunya perubahansebahagian besar (iaitu 50% atau lebih) dalam pemeganganekuitinya. Ini bermakna tidak ada daftar masuk dalam akaunsyarikat selain daripada perbelanjaan minimum untukmemenuhi keperluan perundangan yang telah ditetapkan.Perbelanjaan minimum yang dimaksudkan adalah sepertiberikut:

i. memfail annual return syarikat kepada SuruhanjayaSyarikat Malaysia;

ii. fi setiausaha atas perkhidmatan memfail annual returnsyarikat;

iii. kos mengisi borang nyata dan pengiraan cukai (taxfiling fee);

iv. fi audit statutori (audit fee); dan

v. fi penyediaan akaun (accounting fee).

2.3 Di samping itu, penentuan peringkat pemegangan syer sama ada telahberlaku perubahan sebahagian besar pemegangan syer dalamsesebuah syarikat dormant itu, Kementerian Kewangan memutuskanbahawa penentuan peringkat pemegangan syer adalah pada peringkatpemegangan langsung (direct holding) antara syarikat dormant yangdiambil alih dengan syarikat yang mengambil alih.


3. PERMOHONAN BAGI KES DI LUAR DASAR

Bagi kes di luar dasar yang dinyatakan di perenggan 2 di atas, permohonanuntuk mendapatkan pertimbangan berdasarkan merit kes boleh dikemukakankepada YB Menteri Kewangan melalui alamat berikut:

Ketua Setiausaha Perbendaharaan
Kementerian Kewangan Malaysia
Bahagian Analisa Cukai
Tingkat 7, Blok Tengah
Presint 262592 PUTRAJAYA

(u.p.: Y. Bhg Datuk Aziyah bte Bahauddin)

Telefon: 03-8882 3330 Faks: 03-8882 3884

IRB move affects inter-company loans

1 Sept 2008: Straight Talk: IRB move affects inter-company loans -- By Toh Lye Huat 02:44PM (02-09-2008)

A recent move by the Inland Revenue Board (IRB) to deem as interest income all interest-free loans provided by Malaysian Bulk Carriers Bhd (Maybulk) to its wholly owned subsidiaries has raised concern among companies with inter-company loan deals. The development is likely to see many of them restructuring their funding requirements.

For investment holding companies, especially those with wholly owned subsidiaries enjoying certain tax reliefs, the IRB's move means that there could be tax assessment of inter-company loans.

In arriving at the decision following a field audit, the IRB has also raised a tax assessment of RM58.4 million on the deemed interest income for Maybulk, covering the financial years 2003 to 2005.

On Aug 15, Maybulk, in announcing the IRB's decision, said it would contest the assessment. The shipping firm views it as a significant departure from the IRB's past practices in respect of interest-free loans to wholly owned subsidiaries. Maybulk says it considers the assessment incorrect under Malaysian income tax law and that it does not agree with the assessment because it views the loans as part of its equity to finance the acquisition of vessels by the group. Under the income tax laws, tax exemption is given to Malaysian-registered vessels in the shipping business.

The IRB's recent decision has caught many companies by surprise. The Income Tax Act is silent on this issue, with no specific provision to impute interest income for holding companies that extend interest-free loans to their wholly owned subsidiaries.

In the event that both the holding company and its wholly owned subsidiary are profitable and pay tax, the total amount that the IRB would collect from both would be the same, whether the inter-company loans are free of interest or not.

There will be a difference in tax payment if the holding company extends interest-free loans to subsidiaries that are enjoying tax reliefs such as pioneer status or tax holidays. In cases where such interest-free loans are not accepted by the IRB, it can impute tax on the deemed interest income.

As the Income Tax Act is silent on such matters, the IRB can apply the anti-avoidance provision under the Act if it disagrees with such transactions.

The provision empowers the tax authority to act if, in its opinion, it has proof that the holding company has altered the incidence of tax with a view to reducing the tax payable. In such instances, the IRB can disregard the transaction and make any necessary adjustment it deems fit.

The dispute between IRB and Maybulk has got some corporations worried because of the potential impact on the bottom line, cash flow and investor confidence. The IRB's move can be seen as a warning that this tax assessment will also be extended to other companies.

If that happens, there will be a lot of backdated tax that these companies will have to pay, and that could have a material effect on them. Cash flow could also be hit if they need to pay the taxes and any bond issues that they may have could also be downgraded because of the impact on the earnings.

Start-ups that need financial support from their holding companies could see their development affected due to financing issues.

Interest-free loans given to wholly owned subsidiaries should be seen as a form of temporary relief for companies within a group. When the subsidiaries do well, they will become good taxpayers. However, there must be sound commercial justification in extending these loans. In the case of Maybulk, there could be some commercial reasons for giving interest-free loans to its subsidiaries.

With the huge amounts involved in such matters, many corporations may want to contest the issue in court.

Instead of interest-free loans, companies may also opt for capital injection for their units, for example, through redeemable convertible preference shares. Loans, though, give the lender greater flexibility as they can be recalled anytime.

The IRB, as a corporatised entity, is under pressure to achieve its tax collection target. With the economy slowing down, many companies are expected to post lower earnings than projected earlier, and this will have an impact on IRB's tax collection.

In implementing regulations, the authorities should ensure a business's viability and sustainability.

Since the Act is silent on tax assessment for inter-company loans, it would be better for the IRB to come out with a public ruling that will provide a clear interpretation and give time to the companies to adjust or restructure their capital needs.

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Remission Of Increase in Tax

REMISSION OF INCREASE IN TAX


1. Tax shall be increased if:

1.1 The tax payable / debt due to the government is not paid within the stipulated period;

1.2 The difference between the actual tax payable and the estimate /revised estimate of tax payable is more than 30% of the actual tax payable.


2. A taxpayer with valid reason(s) to support his appeal against the increase intax imposed, may appeal in writing to the Collections Branch / Collections Unitof the LHDNM branch which handles the taxpayer’s income tax file.


3. LHDNM will consider the appeal according to the merit and facts of each case.


4. Remission of increase in tax due to late payment may be considered under the folllowing circumstances:

4.1 Full remission:

• It is proven that payment is made within the stipulated period;

• Extension of time for payment has been granted;

• Increase in tax was wrongly imposed;

• Tax has been fully discharged;

• It is proven that the notice of assessment was sent to a wrong address or not to the last known address.

4.2 Partial remission:

• Tax credit is used to pay outstanding tax — remission of increase in tax on the amount of outstanding tax set off;

• Tax is reduced — remission of increase in tax on the amount of taxreduced.


5. Remission of increase in tax imposed under subsection 107C(10) (paragraph1.2 above) may be considered if it can be proven that the increase in company’s profit is only known after the 9th month revision in estimate, provided that the difference in estimate is paid not later than the due date for final installment payment.


INLAND REVENUE BOARD OF MALAYSIA
2nd September 2008

Utilisation of Companies' Income Tax Credit As Set Off

UTILISATION OF COMPANIES’ INCOME TAX CREDIT AS SET OFF


1. The policy of LHDNM is to refund tax credit.


2. Tax credit for a year of assessment arises:

2.1 When there is excess payment as at the date the assessment is raised
(when the assessment is deemed or formal assessment is raised);

2.2 After tax discharge;

2.3 Due to tax credit under section 110 of the Income Tax Act (ITA) 1967 /section 51 of Finance Act 2007.


3. Installment payments under section 107C of ITA 1967 for the current year of assessment and advance payments in respect of investigation or audit cases shall not be taken as tax credit.


4. A tax credit shall first be used to settle tax liabilities in accordance with the following procedure:

4.1 Settle all outstanding tax / tax balances pursuant to ITA 1967, Finance Act 2007 and the Real Property Gains Tax Act 1976;

4.2 Settle all increases in tax imposed on assessments raised pursuant to ITA 1967, Finance Act 2007 and the Real Property Gains Tax Act 1976;

4.3 Settle overdue and unpaid current year’s estimated tax installments undersection 107C of ITA 1967.


5. Instead of a refund, a company may apply to the Collections Branch /Collections Unit of the relevant LHDNM branch to utilise its tax credit balance after taking into account paragraph 4 above, to set off:

5.1 Non-overdue estimated tax installments for the current year and subsequent year(s) of assessment;

5.2 Tax of other companies within the same group.

6. On the utilisation of tax credit among companies within the same group (excluding associated companies), the following are to be noted:

6.1. Documents to be furnished together with the application letter—

6.1.1 Organisational structure that illustrates the inter-company relationship between the surrendering company and recipient company within the same group;

6.1.2 For A Local Company

i. A copy of the Board of Directors resolution pertaining to the transfer of tax credit, sealed (under company’s common seal) and fully signed (signed in manuscript) by the company’sdirectors (refer to Appendix 1); and

ii. A certified true copy of Form 49 [section 141(6) of the Companies Act 1965] by the Company’s Secretary with his name and full address stated (refer to Appendix 2).

6.1.3 For A Foreign Company

i. Deed of Assignment; or

ii. Board of Directors resolution as stated in paragraph 6.1.2 (i)above.

6.2 The date of utilisation of tax credit to set off the tax of another companywithin the same group is the date on which the application is receivedtogether with complete documents as specified above.

7. The company shall not claim for refund of the tax credit after it has been usedas set off.

LEMBAGA HASIL DALAM NEGERI MALAYSIA
2nd September 2008

APPENDIX 1

(NAME OF COMPANY)

(INCORPORATED IN MALAYSIA)

DIRECTOR’S RESOLUTION IN WRITING MADE PURSUANT TO ARTICLE

(NUMBER) OF THIS COMPANY’S ARTICLE OF ASSOCIATION

It is hereby RESOLVED:

1. THAT the Director General of Inland Revenue, Malaysia, be and hereby authorised to transfer/refund to the account of (NAME AND ADDRESS OFRECIPIENT), an amount of RM (AMOUNT IN FIGURES) (Ringgit Malaysia:AMOUNT IN WORDS), from the tax credit available in the company’s account with the Inland Revenue Board of Malaysia.


2. THAT the Inland Revenue Board of Malaysia shall be and is hereby indemnified against all persons whatsoever for the payment made in pursuance of the above resolution.


3. THAT the common seal of the company be and is hereby authorised to beaffixed on the resolution.


4. THAT this resolution be communicated to the Director General of Inland Revenue.


BOARD OF DIRECTORS
A: Signature
Name of Director
Identity Card /Passport No.

APPENDIX 2

FORM 49

Companies Act, 1965

Company No. ................................................

RETURN GIVING PARTICULARS IN REGISTER OF DIRECTORS, MANAGERS AND SECRETARIES AND CHANGES OF PARTICULARS

...................................................(NAME OF COMPANY) DIRECTORS

[form 49]

Furnishing of CP 204 less than the minimum amount specified under S 107C(3) of ITA 1967

FURNISHING OF ESTIMATE OF TAX PAYABLE LESS THAN THE MINIMUM
AMOUNT SPECIFIED UNDER SUBSECTION 107C(3) OF THE INCOME TAX ACT
1967

1. Subsection 107C(3) provides that the estimate of tax payable for a year ofassessment must be at least 85% of the revised estimate of tax payable orestimate of tax payable if no revised estimate is furnished for the precedingyear.


2. Taxpayers having difficulty in complying with the provision mentioned abovemay apply in writing to the following address:

Lembaga Hasil Dalam Negeri Malaysia
Pusat Pemprosesan
Aras 10-18, Menara C,
Persiaran MPAJ
Jalan Pandan Utama,
Pandan Indah
Karung Berkunci 11018
50990 Kuala Lumpur


3. Applicants must state the reasons for not complying with the provision ofsubseksyen 107C(3) and provide documents to substantiate the reasonsstated.


4. Factors which may be considered in approving an application:

4.1 Cessation of business

4.2 Income has been significantly reduced or no longer received

Example:
• Income-generating assets have been sold
• No new projects
• Loss of major clients or contracts
• Increase in operating costs resulting in significant reduction of profitmargin
• Disturbance to business operation due to fire or natural disaster

4.3 Companies under winding-up

4.4 Companies taken over by way of mergers and acquisitions

4.5 Companies having substantial carried forward losses / capitalallowances

4.6 Change in accounting period resulting in shorter basis period

4.7 Companies have been granted tax incentives such as pioneer status orinvestment tax allowance

LEMBAGA HASIL DALAM NEGERI MALAYSIA 2nd September 2008