INLAND REVENUE BOARD (IRB) CLARIFIES ON SECTION 83A OF THE INCOME TAX ACT 1967 (THE ACT) AND BEWARE OF SYNDICATE COLLECTING TAX

Members are hereby informed that the IRB has on 10 April 2012 provided clarification pertaining to Section 83A of the Act for the purpose of preparing Form CP 58 [2011] and Income Tax Return Form (ITRF) for year 2011.

The announcement comprises the following:


a. For companies paying cash and non-cash incentives in year 2011(incentives received based on sales performance on products or services; whether or not specified in the contract) to an agent, dealer or distributor, the Form CP 58 shall be furnished to the agent, dealer or distributor not later than 31 May 2012. However, concession are granted to the paying companies for not furnishing the Form CP 58 for year 2011 provided that such information on both cash and non-cash incentives (January 2011 to December 2011) are duly declared in the annual statement issued to the agent, dealer or distributor.

Commencing from year ending 31 December 2012 and years onwards, the paying companies are required to prepare and furnish Form CP 58 to an agent, dealer or distributor, in respect of cash and non-cash incentives in excess of RM5,000.

b. For non-cash incentives, the amount disclosed shall be equivalent to the value/actual amount expended by the paying companies. As such, Items No. 2a and 2b of Part C in Guide Notes on Filling Out Form CP 58 are deleted.

c. Cash and non-cash incentives received by an agent, dealer or distributor are business income. As such, an agent, dealer or distributor is required to declare the incentives received for year 2011 in his/her 2011 ITRF.


To view the announcement, please refer to the IRB's website at the following link:http://www.hasil.gov.my/pdf/pdfam/PENGUMUMANSEK83A_1.pdf.