IRB Media Release - Avoiding Offences under AMLATFA

The Inland Revenue Board (IRB) released a media statement on 29 August 2012 advising the public that the IRB will take appropriate action for tax offences under the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA) 2001 

Anti-Money Laundering and Anti-Terrorism Financing (Amendment of Second Schedule) Order 2010 [P.U.(A) No. 343/2010], gazetted on 7 October 2010, has included the following tax offences in the Second Schedule of AMLATFA:

1) Failure to furnish return or give notice of chargeability [S. 112, Income Tax Act 1967 (ITA)];

2) Submitting incorrect income tax returns [S. 113, ITA]; and

3) wilful tax evasion [S.114, ITA].

Any person who is found guilty of the above offences shall be liable to a fine not exceeding RM5 million and/or jailed for up to 5 years. The IRB can freeze, seize or confiscate the person�s property during investigation. The IRB informed that in the year 2011, 1389 bank accounts had been frozen under this law. The Chief Executive Officer of the Inland Revenue Board, Tan Sri Dr. Mohd Shukor Bin Hj. Mahfar commented that the IRB is serious in implementing the law against offenders.

For further inquiries and assistance, please contact the IRB via email at callcentre@hasil.gov.my or telephone 1-300-88-3010.

Members may view the IRB Media Release at IRB�s website.

Incentive Package for Treasury Management Centre (TMC)

The 2012 Budget proposed (Paragraph 23 and Appendix 8) that a Treasury Management Centre (TMC) be given an incentive package, applicable from 8 October 2011 until 31 December 2016. The following Orders have been gazetted to give effect to the proposals:

1) Income Tax (Exemption) (No.3) Order 2012 [P.U. (A) 184/2012]

This Order exempts a non-citizen individual from the payment of income tax in respect of income derived from an employment with a TMC.

This order shall have effect from the year of assessment (YA) 2012.

2) Stamp Act (Exemption) (No.2) Order 2012 [P.U. (A) 185/2012]

This Order exempts from stamp duty, all instruments of loan agreements and service agreements, executed by a TMC on or after 8 October 2011 but not later than 31 December 2016 for the provision of qualifying financial and fund management services in Malaysia.

This Order is deemed to have come into operation on 8 October 2011 and shall continue to be in operation until 31 December 2016.

3) Income Tax (Exemption) (No.5) Order 2012 [P.U. (A) 240/2012]

This order exempts a TMC from the payment of income tax for five consecutive years of assessment in respect of the statutory income from the provision of qualifying services to its related companies, and at least three of which are located outside Malaysia.

This Order shall have effect from the year of assessment 2012 and applies to any application made to the Malaysia Industrial Development Authority (MIDA) not later than 31 December 2016.

4) Income Tax (Exemption) (No.6) Order 2012 [P.U. (A) 241/2012]

This Order exempts a non-resident person from payment of income tax in respect of interest on borrowings to the TMC for the purpose of providing qualifying services during the exempt years of assessment as specified in Income Tax (Exemption)(No.5) Order 2012 [P.U.(A) 240/2012].

This Order shall have effect from the year of assessment 2012.

Please note that there is a slight difference in the definition of TMC in the Orders. For further information, please refer to Incentive Package for Treasury Management Centre (TMC) on our website. Members may also visit the Attorney-General’s Chambers (AGC) website to view all the above Orders.

Capital Markets and Services (Private Retirement Scheme Industry)(Fees) Regulations 2012 [P.U.(A) 211/2012

Further to our e-CTIM No.54/2012, the Capital Markets and Services (Private Retirement Scheme Industry) (Fees) Regulations 2012 have been gazetted and came into operation on 12 July 2012.

The Regulations provide information on the Fees payable, Fees for acts of Commission, Withdrawal, refusal and review of Commission�s decision, and Waiver of annual fee for private retirement scheme.

Members may click here to view the Regulations.



Private Pension Administrator (PPA)


In addition, please be informed that the Government has put in place the final component of the Private Retirement Scheme (PRS) framework with the establishment of the PPA. The PPA plays an important role in the infrastructure for PRS framework, by providing efficiency in the administration of PRS.

For more information on PRS, members may refer to the PRS Booklet or visit the website at: www.ppa.my.

IRB Media Release – Temporary Closure of e-Lejar System

The Inland Revenue Board (IRB) has issued a media release informing that the e-Lejar System will close operations temporarily from 28 August 2012 to 11 September 2012 for maintenance purposes.

For further inquiries and assistance members may email IRB at callcentre@hasil.gov.my or call 1-300-88-3010.

e-Lejar System

Taxpayers can check their personal details, ledger transactions and the current tax balance position via the e-Lejar. The ledger shows the taxpayer’s account status for Income Tax and Real Property Gains Tax (if any) for the current and previous year. It can be accessed using the e-Filing user ID.

Members may view the IRB Media Release at IRB’s website

IRB Notification - Procedure and IRB Contact Details in connection with Set-Off and Refund Cases

Further to our e-CTIM No.106/2012 and e-CTIM No.106/2012 (Addendum), please be informed that the Inland Revenue Board (IRB) has notified the Institute that, for the purpose of uniformity, the procedure for set-off and refund cases has been streamlined as follows:-

1. All requests for set-off and refund may be made or directed to:

a). The one-stop counters, of the Customer Service Units at the IRB Branch offices;

b). Via email to the Customer Care Officers of the IRB Branch offices;

c). Via facsimile to the IRB Branch offices.

2. In respect of company (C), co-operative society (C1), trust body (TA) and unit trust / property trust (TC) cases, requests should be submitted to the appropriate branch / collections unit, as follows:

a) Peninsular Malaysia - Collections Branch, Kuala Lumpur

b) Sabah - Kota Kinabalu Branch

c) Sarawak (except Miri) - Kuching Branch

d) Miri - Miri Branch

3. In respect of all other cases, including employment and business cases, requests should be submitted to the Collections Unit at the respective IRB Branch offices where the files are kept.

4. The above procedure is applicable for requests for refund of overpayment and requests for set-off in respect of both Income Tax and Real Property Gains Tax.

Members may view the IRB letter at the Institute’s website.

2013 BUDGET SEMINARS

Further to our e-CTIM No. 107/2012, the Institute had a meeting with representatives from the Ministry of Finance (MOF) and the Inland Revenue Board (IRB) this morning.

We are pleased to inform members that the Guidelines on Application and Renewal of Tax Agent Licence remains unchanged. The 2013 Budget Seminars that will be organised by CTIM will continue to be recognised as one of the mandatory Budget seminars for the application and renewal of tax agent licence.

We will advise members on the dates and locations of our 2013 Budget Seminars in due course.

Members may view the Guidelines on Application and Renewal of Tax Agent Licence at MOF’s website.

The Digital Franking System

To improve the public service delivery system, the Digital Franking System (DFS) was implemented by the Inland Revenue Board (IRB) on 30 June 2011 as an additional mode of stamping besides Stamp Assessment and Payment System (STAMPS) and adhesive stamp / Setem Hasil.

The DFS enhances the operation flow with the public and strengthens the validity of the stamping process with the introduction of improved security features for the impressed stamps. It is divided into two applications:


1) Internal User (IRBM) application

This mode of stamping was implemented in stages since 14 February 2011 in addition to the existing process such as STAMPS and Setem Hasil. Data of transactions are made via STAMPS or DFS are available online. Member could check the authenticity of a Stamp Certificate or DFS via STAMPS in IRB official website https://stamps.hasil.gov.my

2) External User application

This application allows for stamping of fixed duty instruments only and is available to the external users like bankers, insurers, telcos, stock brokers, government linked companies (GLC) or other companies approved and licensed only by IRB. Internet facility is required to operate DFS, which uses a preloaded credit system that function similarly to a normal prepaid phone card. It continually communicates back to IRB main server to monitor the credit usage and every transaction is on real time.


Kurnia Insurans (Malaysia) Berhad (KIMB) has obtained the System User Licence from the IRB to use the DFS for stamping of Foreign Workers Insurance Guarantee (FWIG). KIMB spent a total of RM 300,000 on 15 units of the digital franking machines, including installation and initial maintenance costs at 15 agents� offices.

With DFS, stamping can be expedited, transaction made easier and more secured. The authentication of the impressed stamp is assured since stamping is done in-house.

For further enquiry, member may liaise with Encik Masrun Bin Maslim, the Public Relations Officer (Media) of the IRB at Headquarter, Cyberjaya. The contact details are as follows:

Direct Line: +603-8313 8836
Email: masrun@hasil.gov.my

Pontian Revenue Service Centre Begins Operations

Please be informed that the Revenue Service Centre in Pontian, Johor has begun operations since 1 June 2012, at the following address:-

Pusat Khidmat Hasil Pontian
Lembaga Hasil Dalam Negeri Malaysia
Aras Bawah & Aras Delima,
No.40, Jalan Delima 2,
Pusat Perdagangan Pontian,
82000 Pontian, Johor.

The Revenue Service Centre offers services and transactions relating to stamp duty matters only, and the operating hours are as follows:-

Service / Transaction	Day	Operating Hours
Revenue Stamps (Setem Hasil)	Monday - Friday	8.00 a.m. - 5.00 p.m
Cash	Monday - Thursday	8.00 a.m. - 12.30 noon 2.00 p.m. - 3.30 p.m
	Friday	8.00 a.m. - 11.45 a.m. 2.45 p.m. - 3.30 p.m.

Members may view the IRB Media Release at IRB's website.

Double Taxation Relief (The Government of the Republic of Indonesia) (Amendment) Order 2012 [P.U. (A) 217/2012]

This Order seeks to further amend the Double Taxation Relief (The Government of the Republic of Indonesia) (Amendment) Order 1992 [P.U. (A) 31/1992], as amended by the Protocol signed on 12 January 2006 [P.U. (A) 285/2006].

The Exchange of Information Protocol (contained in this order) was signed by the Government of Malaysia and the Government of the Republic of Indonesia on 20 October 2011. However, as at the date of this circular, the protocol is not yet in force.

Income Tax (Deduction for the Sponsorship of Scholarship to Student of Higher Educational Institution) Rules 2012 [P.U.(A) 228/2012

These Rules are deemed to have effect from the year of assessment of 2011 until the year of assessment of 2016, except for Rule 4 which is applicable until the expiration of the scholarship sponsorship agreement.

The Rules shall apply to a Malaysian resident company �
(a) which is incorporated under the Companies Act 1965 [Act 125];
(b) which sponsors scholarship to students of higher educational institution; and
(c) which executes a scholarship agreement with a student on or after 8 October 2011 but not later than 31 December 2016.

These Rules shall not apply to a company that has, in the basis period for a year of assessment, made a claim under paragraph 34(6)(l) of the Income Tax Act, 1967.

The �double deduction� available to the company is in respect of:
(a) payment to the higher educational institution, relating to the course of study; and
(b) educational aid and reasonable cost of living expenses throughout the period of study.

Any refund by the student to the company shall, when received, be treated as gross business income of the scholarship-sponsoring company. In addition, where in the opinion of the Director General of Inland Revenue (DGIR), the total amount of expenses exceeds the amount which would reasonably be expected to be incurred in the ordinary course of business, the DGIR may disallow a claim on the excess.

In these Rules �

�higher educational institution� means any institution established under the Universities and University Colleges Act 1971 [Act 30], Universiti Technologi MARA Act 1976 [Act 173] or the Private Higher Educational Institutions Act 1996 [Act 555]

�student� means an individual �
(a) who is a Malaysian citizen and resident in Malaysia;
(b) who receives full-time course of study leading to an award of a diploma or bachelor�s degree at a higher educational institution;
(c) who has no means of his own; and
(d) whose parents or guardians, have total monthly income not exceeding five thousand ringgit.