Tuesday 31 July 2012

Income Tax (Amendment) Act 2012 � (Act A1429)

The Income Tax (Amendment) Act 2012 (Act A1429), which was gazetted on 22 June 2012, provides the amendment to subsection 44(7) of the ITA 1967. The new paragraphs �aa� and �c� in the definition of �organization� have been inserted. For ease of reference, they are reproduced (in bold) below:

"organisation" means an organisation in Malaysia which is not operated or conducted primarily for profit and which is�

(aa). �an organization established and maintained exclusively to administer and augment a public or private fund established or held for the sole purpose of carrying out the objective in which the institution is operated or conducted�; and

(c) � an organization established and maintained exclusively to administer and augment a public fund established and held solely for the purposes of religious worship or the advancement of religion and such fund is to be used�
(i) for the construction, improvement or maintenance of a building in Malaysia which is�
(A) intended to be used (and, when constructed, is used) exclusively for those purposes; and
(B) intended to be open (and, when constructed, is open) to any member of the public for those purposes; or

(ii) to provide facilities to carry on the activity related to those purposes; or
(iii) to provide for the management of the activity related to those purposes.

With the amendment, a taxpayer is now eligible to claim for a deduction in respect of any gift of money to an approved organization which is to be used to provide facilities to carry on the activities, and for the management of the activities related to religious purposes.

Members may recall our earlier e-CTIM No. 42 of 2012, on the same matter

Monday 30 July 2012

2013 Budget Seminars

The Institute has received feedback from members that they have been informed by email messages that the only budget seminars recognized for the application and renewal of tax agent licenses are those conducted by the Inland Revenue Board for 2013 Budget Seminars.


Please be informed that the Institute is not aware of any changes to the guidelines issued by the Ministry of Finance (MOF) on this matter.

The Institute will seek clarification from MOF and IRB on whether any changes have been made by MOF. We will keep you informed on the developments

Friday 27 July 2012

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

Please be informed of the following procedure / matters which were reached at the DESIRE Meeting No. 1/2012 held on 3 July 2012 at the Inland Revenue Board (IRB) Headquarters:

i) Members may forward their requests for refund of overpayment, and requests for confirmation of set-off with regard to overpayment, as follows:

a. To the counters of the respective IRB Branch offices.

b. Via email to (the IRB Collections Branch, Kuala Lumpur) Encik Shahril at shahril@hasil.gov.my or to Encik Ismail Saban at ismailsaban@hasil.gov.my in respect of “Kuala Lumpur Branch” taxpayers, in connection with both company and non-company cases.

c. Via email to the Public Relations Officers (PROs) of the respective IRB Branch offices, in respect of “non-Kuala Lumpur Branch” cases.

d. Via facsimile to the respective IRB Branch offices.

ii) In their communication via email / letter with the IRB on the matter above, members are to use an appropriate “title /subject” in their letters /emails, such as:

a. “Application for Refund”; or

b. “Application for Set-off”; or

c. “Request for Confirmation of Set-off”.

iii) Members will get a confirmation / response to their request / application within 7 days, except in instances of cases which are not straightforward, in which case longer processing time would be required.

iv) It is unnecessary for members to send reminders.

IRB Has Powers to Prosecute Tax Offenders

The Inland Revenue Board (IRB) has issued a media release informing that the Putrajaya Court of Appeal has decided that the IRB has the power to prosecute tax offenders under the Income Tax Act, 1967 (ITA).The case cited is:

Kang Keng Tee & Ooi Lay See v Public Prosecutor
Criminal Appeal No. P09-112-2010.
[Decision date: 18 July 2012.]

In the case of Kang Keng Tee & Ooi Lay See above, the taxpayers were charged under Section 114(1)(a) of the ITA.

The decision made by the Court of Appeal in the above case differs from that in the case of Khaw Siang Hee & Anor. (decided on 28 June 2012) where the taxpayers were also charged under Section 114(1)(a) of the ITA.

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

Income Tax (Deductions for Freight Charges) (Revocation) Rules 2012 [P.U. (A) 218/2012]

1. Income Tax (Deductions for Freight Charges) (Revocation) Rules 2012 [P.U. (A) 218/2012]

The above rules, which shall have effect from the year of assessment (YA) 2016 effectively means that the Income Tax (Deductions for Freight Charges) Rules 1990 [P.U (A) 422/1990] are revoked with effect from YA 2016.

2. Income Tax (Deductions of Insurance Premiums for Exporters) (Revocation Rules 2012 [P.U. (A) 219/2012]

The above rules, which shall have effect from the year of assessment (YA) 2016 effectively means that the Income Tax (Deductions of Insurance Premiums for Exporters) Rules 1995 [P.U. (A) 79/1995] are revoked with effect from YA 2016.

3. Income Tax (Deductions of Insurance Premiums for Importers) (Revocation) Rules 2012 [P.U. (A) 220/2012]

The above rules, which shall have effect from the year of assessment (YA) 2016 effectively means that the Income Tax (Deductions of Insurance Premiums for Importers) Rules 1982 [P.U. (A) 72/1982] are revoked with effect from YA 2016.

Code of Ethics for Tax Agents (Revised)

CTIM was informed at a recent dialogue at the Inland Revenue Board (IRB) Headquarters that the IRB had uploaded the revised Code of Ethics for Tax Agents [Kod Etika Ejen Cukai (PIN. 4/2012)] on its website.

Members may view the revised Code of Ethics for Tax Agents at the IRB website

at > Home > Tax Agents.

Thursday 26 July 2012

Registration of Businesses (Reduction of Fees for New Registration and Renewal of Registration) Rules 2012 [P.U. (A) 207/2012]

These Rules, which are effective from 1 June 2012 to 31 December 2012, stipulate that the fees for new registration and renewal of businesses shall be reduced to RM50 as a one-off payment fee for the period of 5 years.

Effectively, it means that in the period indicated, with a payment of RM50, a new business may be registered, and a further payment will be due upon renewal in the year 2017.

For more information, please refer to the relevant links as follows
Section 5 & Section 5A of the Registration of Businesses Act 1956

Rule 19 & Second Schedule of the Registration of Businesses Rules 1957

Income Tax (Exemption) (No.4) Order 2012 [P.U. (A) 209/2012]

Any gains or profits falling under paragraph 4(f) of the Income Tax Act 1967 (ITA), received by a non-resident from a Labuan entity, are exempted from income tax. Section 109F of ITA shall not apply to the income exempted under this Order.

This Order is deemed to have come into operation on 11 February 2010.

The Income Tax Exemption (No.4) Order 2009 [P.U. (A) 389/2009] published on 5 November 2009 is revoked.

Wednesday 25 July 2012

MINUTES OF THE CUSTOMS-PRIVATE SECTOR CONSULTATIVE PANEL (CPSCP) MEETING NO. 1/2012 ON 2 MAY 2012 WITH THE ROYAL MALAYSIAN CUSTOMS (RMC)

Further to the Customs-Private Sector Consultative Panel Meeting No.1/2012 held on 2 May 2012, with the Royal Malaysia Customs (RMC), please be informed that members may now view the minutes of the above meeting at the Institute’s website.

Some of the new important issues discussed during the said meeting have been highlighted in agenda 7 of the above minutes and are listed below:-

• Sales Tax and / or Duties for Spare Parts of Machineries
• Customs Procedure - from Port Sepanggar to Tanjung Aru,Sabah
• One Single Customs Station Code for Port Klang
• Deconsolidation Activity at Public Bonded Warehouse
• Compound for Mistakes by Freight Forwarders
• Advance Manifest Declaration
• Red Files System for Customs Assessment
• Customs Clearance-K8 Normal Cargo at Westport and K8 critical cargo at PKFZ
• Government Departments do not Apply for CJ(P)2
• Service Tax Chargeable on Employment Service


For further details, members may refer to the above-mentioned minutes of meeting.

Service Hours of IRB Offices during the month of Ramadhan

IRB Media Release – Service Hours of IRB Offices during the month of Ramadhan

The Inland Revenue Board (IRB) has notified the public that the office hours during the month of Ramadhan will be from 7.30 a.m. to 5.00 p.m.

The public is nonetheless able to access the electronic service provided by the IRB by visiting www.hasil.gov.my for taxation matters.

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

Transfer Pricing (TP) Guidelines 2012

Transfer Pricing (TP) Guidelines 2012

Advance Pricing Arrangement (APA) Guidelines 2012

Please be informed that the Inland Revenue Board (IRB) has issued the above new guidelines on 24 July 2012.

Members may view the TP and APA guidelines on the CTIM website and the IRB website.

For further information members may contact IRB at the following email address lhdn_jcm@hasil.gov.my.

Please let us have your feedback, latest by 2 August 2012, so that we may raise it to the IRB.

CCS Group's Official Website

We are thrilled to announce that CCS Group has launched a new website at www.ccs-co.com Some of the great new features of this newly designe...