Availability of e-filing of tax returns from 1 March 2010

The Inland Revenue Board has announced that the e-filing facility for non-company income tax returns will be available from 1 March 2010 onwards.

Mandatory online application and renewal of tax agent licence from 1 July 2010 onwards.

Currently, electronic application for, and renewal of a tax agent’s licence is available on the Ministry of Finance (MOF)’s website. Applicants may check the status of their application online, and while doing so, are advised to update their email addresses. Currently, applications for and renewal of tax agent’s licence may be done electronically, or manually.



With effect from 1 July 2010, all applications for, and renewals of a tax agent’s licence must be done electronically.

http://www.treasury.gov.my/index.php?option=com_content&view=article&id=300:panduan-bagi-permohonan-ejen-cukai&catid=97:catlesen&Itemid=204&lang=my

https://smpc.treasury.gov.my/sop/workdesk/login.jsp?ecbeans.logout=true

Grace period (for manual/paper filing of return forms) reduced from fourteen days to seven days,with effect from year of assessment 2010 for March and

In an attempt to get taxpayers to be more disciplined with regard to the filing of income tax returns, the IRB has announced that, with effect from year of assessment 2010, the grace period (of fourteen days) which is currently available to companies with March and December year-ends will be reduced to seven days. With this information, it is hoped that taxpayers will be adequately forewarned.

Guidelines on Real Property Gains Tax (RPGT)

With effect from 1 January 2010, the Real Property Gains Tax (Exemption) (No. 2) Order 2007 has been revoked.

To enhance the quality of compliance, the Inland Revenue Board (IRB) has issued guidelines on 2 February 2010 to clarify issues related to the new RPGT requirements in respect of acquisitions or disposals of chargeable assets made on or after 1 January 2010.

CTIM Members may download the guidelines from the website of the IRB at http://www.hasil.gov.my/lhdnv3/documents/maklumat_terkini/Garis%20Panduan%20CKHT.pdf or view the guidelines on the Institute’s website at http://www.ctim.org.my/technical_techdev_direct.asp.

Minutes of Filing Programme Working Group Meeting (DESIRE) 05-2009

The minutes of the meeting which was held on 16 December 2009 are available on the Institute’s website at http://www.ctim.org.my/technical_techdev_direct.asp.

Procedures for application of certificate of tax residence status

The IRB has uploaded the above on its website at

http://www.hasil.gov.my/lhdnv3e/documents/sorotan/CERTIFICATE_OF_RESIDENCE.pdf . Members may also view the document on the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

Income Tax (Renovation or Refurbishment Expenditure) Rules 2010 [P.U.(A) 20/2010]

Pursuant to the proposal under the Second Stimulus Package, the Minister has made the above rules, wherein are specified expenditure incurred on renovation and refurbishment which qualify for accelerated capital allowance at the rate of 50%.  These rules are effective from years of assessment 2009 to 2011. 

The items listed in the Rules are similar to those listed in the Guidelines for Mini Budget 2009, except for expenditure incurred on prayer facilities, and electrical wiring, which have been excluded from the Rules. It is to be noted that designer fees and professional fees do not qualify for the 50% rate.

Members are advised to refer to item 3 of the Guidelines on 2009 Mini Budget for a better understanding of the law.  The Mini Budget Guidelines are available at the IRB’s website at http://www.hasil.gov.my/lhdnv3/documents/budget/Garis_Panduan_Mini_Bajet_2009.pdf.

Guidelines on tax exemption of grants and subsidies, and income of statutory bodies

The IRB has issued the above guidelines on 26 January 2010 to explain the operation of Income Tax (Exemption) (No.4) Order 2003 [P.U.(A) 33/2003] and Income Tax (Exemption) (No.22) Order 2006 [P.U.(A) 207/2006]. 

Treatment of subsidies and grants

                  i.         Under Income Tax (Exemption) (No.4) Order 2003 [P.U.(A) 33/2003], effective from years of assessment 2002 to 2005,

a.            subsidies and grants are exempt from tax at the statutory income level;

b.            expenditure financed by the subsidies and grants are allowed a  deduction under Section 33(1) of the Income Tax Act 1967 (ITA); and

c.            expenditure, incurred on acquisition of plant and machinery financed by the subsidies and grants, qualify for capital allowances under Schedule 3(1) of ITA.

                ii.         Under Income Tax (Exemption) (No.22) Order 2006 [P.U.(A) 207/2006], effective from year of assessment 2006, 

a.            subsidies and grants are exempt from tax at the gross income level;

b.            expenditure financed by the subsidies and grants are not eligible for a deduction under Section 33(1) of the ITA;

c.            capital expenditure, on plant and machinery financed by the subsidies and grants, do not qualify for capital allowances under Schedule 3(1) of ITA; and

d.            Subsidies and grants are exempt from tax in the basis period in which they are received, or in the basis period in which expenditure financed through the subsidies and grants, is incurred.

It is noted that the IRB did not comment on the impact of the decision in the Court of Appeal case Ketua Pengarah Hasil Dalam Negeri v Perbadanan Kemajuan Ekonomi Negeri Johor (2009).

Tax exemption of income of a statutory authority

The IRB has clarified that

a.            a statutory authority is defined as “any authority or body established by or under a written law (not being an authority or body established by or under the Companies Act 1965 [Act 125],…) to discharge any functions of a public nature, including the provision of public utility and similar services”; and

b.            the tax treatment of the income of a statutory authority is the same as that of subsidies and grants received from a federal or state government.

Members may view the guidelines on the IRB’s website at Guideline

New RPGT forms available for disposal of real properties and shares in a real property company on or after 1 January 2010

With the recent amendments to the Real Property Gains Tax (RPGT) Act, 1976, the Inland Revenue Board (IRB) has introduced a new set of RPGT forms for disposals and acquisitions of chargeable assets on or after 1 January 2010. The set of forms consists of the following:

i. RPGT 1A Disposal of real properties;

ii. RPGT 1B Disposal of shares in a real property company;

iii. RPGT 2A Acquisition of real properties or shares in a real property company;

iv. RPGT 3 Notice for obtaining information pertaining to a chargeable asset; and;

v. Declaration Form for election for tax exemption (in respect of private residence) under paragraph 9 Schedule 3 of RPGT Act 1976.

CTIM Members may view the forms at the website of the IRB at http://www.hasil.gov.my/lhdnv3/index.jsp?process=8000&categoryText=&isDisplayRightSide=false&category=8&tahunTaksiran=-