Wednesday 23 June 2010

Guidelines on Petroleum Income Tax (PITA)

In the 2010 Budget it was proposed that, with effect from the year of assessment 2010, upstream petroleum companies subject to tax under the Petroleum (Income Tax) Act 1967 (PITA) will be placed under the self-assessment system and assessed to tax on a current year basis.

In view of the above, the Inland Revenue Board has issued guidelines (available only in the Bahasa Malaysia language) on 03 June 2010 to explain the amendments to the PITA.

Members may download the guidelines from the website of the IRB at http://www.hasil.gov.my/lhdnv3/documents/GarisPanduanTeknikal/Garis_Panduan_PITA.pdf
or view the guidelines on the Institute’s website at http://www.ctim.org.my/technical_techdev_direct.asp

Thursday 17 June 2010

Deadline to submit tax return forms and payment of balance of tax for year of assessment 2009 (business source of income).

The IRB has issued a Press Release dated 11 June 2010 detailing the types of return forms which need to comply with the filing deadline of 30 June 2010. Mention was also made about the fines which will be imposed for late filing of the said return forms.
The press release may be viewed at the website of IRB at

Public Ruling No. 2/2010 - Allowable pre-operational and pre-commencement business expenses

The Inland Revenue Board (IRB) has issued Public Ruling No. 2/2010 (effective for year of assessment 2010 and subsequent years of assessment) on 3 June 2010. This Public Ruling supersedes the earlier Public Ruling No. 2/2002 issued on 8 July 2002.
Some of the changes observed are as follows:
-       The maximum authorised share capital requirement for companies eligible to claim a deduction for incorporation expenses has been increased from RM250,000 (for companies incorporated in Malaysia on or after 1.1.1973 but prior to 13.09.2003) to RM2,500,000 (for companies incorporated in Malaysia on or after 13.09.2003).
A sole proprietorship or partnership which converted to a private limited company, with an authorised share capital of not more than RM2,500,000, is also eligible for the above deduction.
-       Establishment expenditure of the following types of entities may also qualify for a deduction against the gross income in ascertaining the adjusted income of the business:
·         a Real Estate Investment Trust (REIT)
·         a Property Trust Fund (PTF), and
·         an Islamic stock broking company
-       With effect from the year of assessment 2009, a person may claim a deduction for expenses incurred in respect of recruitment of employees prior to the commencement of his business. The expenses must be incurred within 1 year prior to the commencement of its business.

The Public Ruling may be downloaded from the website of IRB at:
Members can also view the information from the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

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