The Ministry of Finance has developed an official website for the 2013 Budget. Members may view the live telecast of the 2013 Budget Speech announcement at the http://www.treasury.gov.my/media_bi.html. The 2013 Budget Speech & Appendices, Economic Report 2012/2013 and the 2013 Estimated Federal Expenditure are also available for download on 28 September, 2012 from 6.00 pm.
Members may also download the 2013 Budget Speech & Appendices from the following agencies:
1) Royal Malaysian Customs Department at www.customs.gov.my
2) Inland Revenue Board of Malaysia at www.hasil.gov.my
3) Securities Commission Malaysia at www.sc.com.my
4) Central Bank of Malaysia at www.bnm.gov.my
Friday 28 September 2012
Thursday 20 September 2012
GOOD AND SERVICES TAX (GST) TRAINING COURSE
CTIM is pleased to present to our members a 10-day modular course followed by a 3-day revision session and a 1-day examination which will commence on 1 November 2012 and end on 15 December 2012 with the cooperation and support of the Royal Malaysian Customs Department.
The speakers for this GST training course are representatives from the GST Implementation Unit of the Royal Malaysian Customs Department.
Click here for brochure and registration form.
If you need further information or clarification on the above, kindly contact the CPD Secretariat, Mr Jason/Ms Fadeah/Ms Yus/Ms Ally/Ms Nur at 03-2162 8989 ext 108/113/121/123/106 respectively.
The speakers for this GST training course are representatives from the GST Implementation Unit of the Royal Malaysian Customs Department.
Click here for brochure and registration form.
If you need further information or clarification on the above, kindly contact the CPD Secretariat, Mr Jason/Ms Fadeah/Ms Yus/Ms Ally/Ms Nur at 03-2162 8989 ext 108/113/121/123/106 respectively.
Wednesday 12 September 2012
GUIDELINES ON APPLICATION FOR APPROVAL UNDER SECTION 44(6) OF THE INCOME TAX ACT 1967 FOR DONATIONS TO A SCHOOL FUND
Further to the 2012 Budget announcement (Paragraph 45 of the Budget Speech, refer to our e-CTIM No.42/2012) and the subsequent amendment by way of Income Tax (Amendment) Act 2012 (Act A1429) (refer to our e-CTIM No.108/2012), the Inland Revenue Board (IRB) issued Guidelines On Application For Approval Under Section 44(6) Of The Income Tax Act 1967 For Donations To A School Fund on 16 July, 2012.
The Guidelines provide guidance in respect of application for approval of a public donation fund for a school. Below are some of the salient points:
The school must be registered with the Ministry of Education or the State Islamic Religious Council [Majlis Agama Islam Negeri]/ State Islamic Religious Department [Jabatan Agama Islam Negeri]
The headmaster/headmistress or principal of the school shall make the application in writing for the approval under Section 44(6) for the Fund. He/she shall be responsible for the Fund and shall prepare separate accounts for the Fund.
The funds received must be utilised for the purpose of learning and teaching/education (pembelajaran dan pengajaran or P&P) of the pupils of the school as laid down by the Education Ministry of Malaysia.
Approval will only be granted for programs approved by the Education Policy Planning and Research Division [Bahagian Perancang dan Penyelidikan Dasar Pendidikan” (BPPDP)], Education Ministry of Malaysia. An estimated expenditure together with quotations for each programme must be submitted to the Inland Revenue Board (IRB) for review. The IRB will inform the applicant of the amount approved.
There is no special form for making an application for approval under subsection 44(6) of the ITA.
Members of the Board of Governors of the school, their families and school staff should not enjoy the benefits from the Fund.
At least 50 percent of the committee members of the Fund must be made up of parents of students.
The approved Fund will be exempted from income tax on its income (except for income from dividends) under paragraph 13, Schedule 6 of the ITA.
A donor to the approved Fund will be given a deduction for the donation in arriving at the donor’s total income. Only cash donations supported by an official receipt from the school will be allowed for deduction. Donations in kind are not allowed.
For detailed information, members may view the document from the Institute’s website or IRB website
The Guidelines provide guidance in respect of application for approval of a public donation fund for a school. Below are some of the salient points:
The school must be registered with the Ministry of Education or the State Islamic Religious Council [Majlis Agama Islam Negeri]/ State Islamic Religious Department [Jabatan Agama Islam Negeri]
The headmaster/headmistress or principal of the school shall make the application in writing for the approval under Section 44(6) for the Fund. He/she shall be responsible for the Fund and shall prepare separate accounts for the Fund.
The funds received must be utilised for the purpose of learning and teaching/education (pembelajaran dan pengajaran or P&P) of the pupils of the school as laid down by the Education Ministry of Malaysia.
Approval will only be granted for programs approved by the Education Policy Planning and Research Division [Bahagian Perancang dan Penyelidikan Dasar Pendidikan” (BPPDP)], Education Ministry of Malaysia. An estimated expenditure together with quotations for each programme must be submitted to the Inland Revenue Board (IRB) for review. The IRB will inform the applicant of the amount approved.
There is no special form for making an application for approval under subsection 44(6) of the ITA.
Members of the Board of Governors of the school, their families and school staff should not enjoy the benefits from the Fund.
At least 50 percent of the committee members of the Fund must be made up of parents of students.
The approved Fund will be exempted from income tax on its income (except for income from dividends) under paragraph 13, Schedule 6 of the ITA.
A donor to the approved Fund will be given a deduction for the donation in arriving at the donor’s total income. Only cash donations supported by an official receipt from the school will be allowed for deduction. Donations in kind are not allowed.
For detailed information, members may view the document from the Institute’s website or IRB website
Thursday 6 September 2012
Guideline clarifying the non-application paragraph in Income Tax (Accelerated Capital Allowances (ACA)) Rules
The IRB issued the above guidelines on 9 August 2012 to clarify the non-application paragraph in the following Rules:
• Income Tax (Accelerated Capital Allowance) (Plant And Machinery) Rules 2008 [P.U.(A) 357/2008]
• Income Tax (Accelerated Capital Allowance) (Information And Communication Technology Equipment) Rules 2008 [P.U.(A) 358/2008]
• Income Tax (Accelerated Capital Allowance) (Plant And Machinery) Rules 2009 [P.U.(A) 111/2009]
Background
1. The non-application paragraph in the above Rules restrict the ACA claim by a taxpayer in any year of assessment if the taxpayer qualifies to make a claim in the same year of assessment for other incentives as stipulated in those relevant Rules. The Rules referred to are:
Rules under P.U.(A) 357/2008
(a) Paragraph 6 provides that the Rules do not apply to a company:
(i) where more than 50 percent of the paid up capital of ordinary shares is directly or indirectly owned by a related company;
(ii) where more than 50 percent of the paid up capital of ordinary shares of the related company is directly or indirectly owned by the first-mentioned company; or
(iii) where more than 50 percent of the paid up capital of ordinary shares of the first-mentioned company and the related company is directly or indirectly owned by another company; or
(b) a company which has been granted any incentive under the Promotion of Investment Act 1986 (PIA) or reinvestment allowance (RA) for a year of assessment under Schedule 7A of the Income Tax Act 1967 (ITA); or
(c) a company which qualifies for an allowance under paragraph 19A of Schedule 3 of the ITA for a year of assessment and has made a claim for such allowance.
Rules under P.U. (A) 358/2008
Under para 7, these Rules are not applicable for a year of assessment if the taxpayer:
(a) has been granted any incentive under the PIA; or
(b) has been granted RA under Schedule 7A of the ITA.
Rules under P.U.(A) 111/2009
Paragraph 6 of these Rules provides for non-application of the Rules to a taxpayer who, in the period on or after 10 March 2009 but not later than 31 December 2010,
(a) has been granted any incentive under the PIA;
(b) has made a claim for RA under Schedule 7A of the ITA
(c) has been granted any exemption under paragraph 127(3)(b) or subsection 127(3A) of the ITA; or
(d) qualifies for an allowance at a higher fraction under the ITA or any rules made under section 154 of the ITA.
Tax treatment
2. For the purpose of clarification, incentives granted under the PIA, RA granted under Schedule 7A of the ITA and exemptions under subsections 127(3)(b) or 127(3A) of the ITA are granted on the basis of the person. This means that if a person has elected to claim an incentive provided under the above legislative provisions, that person is no longer eligible to claim ACA under the Income Tax Rules relating to ACA. As such, normal rates of allowance under the Schedule 3 of the ITA will apply.
3. The Income Tax Rules relating to ACA are not mutually exclusive with deductions determined by the Minister under any Rules issued under section 154 of the ITA. For example, a person granted a special deduction or double deduction by the Minister under subsection 154(1)(b) of the ITA is still eligible under the Rules relating to ACA.
4. A person who has made a claim for allowances under paragraph 19A of Schedule 3 of the ITA is still eligible to claim ACA under the Rules relating to ACA in respect of other assets that do not qualify for rates under the first-mentioned paragraph. This is because allowances under the paragraph first mentioned is applied based on the asset and not granted in respect of that person. However, the chosen option between rates under paragraph 19A of Schedule 3 of the ITA and the respective Rules relating to ACA must be consistent.
5. If an asset qualifies for a higher rate of initial or annual allowance under any Income Tax Rules, the claimant is not entitled to opt for a lower rate under the Rules relating to ACA for the same asset.
6. Paragraph 71, Schedule 3 of the ITA applies for all assets (assets owned for a period of less than 2 years) including assets for which ACA has been claimed if disposal of the asset takes place during a period of less than 2 years from the date of acquisition. A balancing charge equal to the amount of any capital allowance on that qualifying plant expenditure will be made on the owner, except on grounds of death of the owner. From the year of assessment 2009, paragraph 71 is not applicable upon the death of the asset owner or upon grounds acceptable to the Director General of Inland Revenue.
7. Where a controlled transfer takes place within 2 years from the date of acquisition of an asset on which ACA has been claimed, paragraph 71 of Schedule 3 of the ITA applies. A balancing charge will be made on the disposer. The acquirer is allowed capital allowances at rates provided under Schedule 3 of the ITA on qualifying expenditure incurred. If the asset is acquired for no consideration, no capital allowances will be granted since no qualifying expenditure has been incurred by the acquirer.
Member may view the Guidelines on the IRB website or visit the Institute’s website.
• Income Tax (Accelerated Capital Allowance) (Plant And Machinery) Rules 2008 [P.U.(A) 357/2008]
• Income Tax (Accelerated Capital Allowance) (Information And Communication Technology Equipment) Rules 2008 [P.U.(A) 358/2008]
• Income Tax (Accelerated Capital Allowance) (Plant And Machinery) Rules 2009 [P.U.(A) 111/2009]
Background
1. The non-application paragraph in the above Rules restrict the ACA claim by a taxpayer in any year of assessment if the taxpayer qualifies to make a claim in the same year of assessment for other incentives as stipulated in those relevant Rules. The Rules referred to are:
Rules under P.U.(A) 357/2008
(a) Paragraph 6 provides that the Rules do not apply to a company:
(i) where more than 50 percent of the paid up capital of ordinary shares is directly or indirectly owned by a related company;
(ii) where more than 50 percent of the paid up capital of ordinary shares of the related company is directly or indirectly owned by the first-mentioned company; or
(iii) where more than 50 percent of the paid up capital of ordinary shares of the first-mentioned company and the related company is directly or indirectly owned by another company; or
(b) a company which has been granted any incentive under the Promotion of Investment Act 1986 (PIA) or reinvestment allowance (RA) for a year of assessment under Schedule 7A of the Income Tax Act 1967 (ITA); or
(c) a company which qualifies for an allowance under paragraph 19A of Schedule 3 of the ITA for a year of assessment and has made a claim for such allowance.
Rules under P.U. (A) 358/2008
Under para 7, these Rules are not applicable for a year of assessment if the taxpayer:
(a) has been granted any incentive under the PIA; or
(b) has been granted RA under Schedule 7A of the ITA.
Rules under P.U.(A) 111/2009
Paragraph 6 of these Rules provides for non-application of the Rules to a taxpayer who, in the period on or after 10 March 2009 but not later than 31 December 2010,
(a) has been granted any incentive under the PIA;
(b) has made a claim for RA under Schedule 7A of the ITA
(c) has been granted any exemption under paragraph 127(3)(b) or subsection 127(3A) of the ITA; or
(d) qualifies for an allowance at a higher fraction under the ITA or any rules made under section 154 of the ITA.
Tax treatment
2. For the purpose of clarification, incentives granted under the PIA, RA granted under Schedule 7A of the ITA and exemptions under subsections 127(3)(b) or 127(3A) of the ITA are granted on the basis of the person. This means that if a person has elected to claim an incentive provided under the above legislative provisions, that person is no longer eligible to claim ACA under the Income Tax Rules relating to ACA. As such, normal rates of allowance under the Schedule 3 of the ITA will apply.
3. The Income Tax Rules relating to ACA are not mutually exclusive with deductions determined by the Minister under any Rules issued under section 154 of the ITA. For example, a person granted a special deduction or double deduction by the Minister under subsection 154(1)(b) of the ITA is still eligible under the Rules relating to ACA.
4. A person who has made a claim for allowances under paragraph 19A of Schedule 3 of the ITA is still eligible to claim ACA under the Rules relating to ACA in respect of other assets that do not qualify for rates under the first-mentioned paragraph. This is because allowances under the paragraph first mentioned is applied based on the asset and not granted in respect of that person. However, the chosen option between rates under paragraph 19A of Schedule 3 of the ITA and the respective Rules relating to ACA must be consistent.
5. If an asset qualifies for a higher rate of initial or annual allowance under any Income Tax Rules, the claimant is not entitled to opt for a lower rate under the Rules relating to ACA for the same asset.
6. Paragraph 71, Schedule 3 of the ITA applies for all assets (assets owned for a period of less than 2 years) including assets for which ACA has been claimed if disposal of the asset takes place during a period of less than 2 years from the date of acquisition. A balancing charge equal to the amount of any capital allowance on that qualifying plant expenditure will be made on the owner, except on grounds of death of the owner. From the year of assessment 2009, paragraph 71 is not applicable upon the death of the asset owner or upon grounds acceptable to the Director General of Inland Revenue.
7. Where a controlled transfer takes place within 2 years from the date of acquisition of an asset on which ACA has been claimed, paragraph 71 of Schedule 3 of the ITA applies. A balancing charge will be made on the disposer. The acquirer is allowed capital allowances at rates provided under Schedule 3 of the ITA on qualifying expenditure incurred. If the asset is acquired for no consideration, no capital allowances will be granted since no qualifying expenditure has been incurred by the acquirer.
Member may view the Guidelines on the IRB website or visit the Institute’s website.
CTIM’S COMMENTS ON PROPOSED AMENDMENTS TO GOODS AND SERVICES TAX (GST) BILL 2009
The Tax Review Panel (TRP) of the Ministry of Finance has made available the Proposed Amendments to Goods and Services Tax (GST) Bill 2009 for public comment and feedback.
In response to the above, the Technical Committee – Indirect Tax (TC-IT) of the Institute has deliberated on the proposed amendments and has submitted comments to the TRP on 30 August 2012.
Members may view the Institute’s comments at the Institute’s website.
In response to the above, the Technical Committee – Indirect Tax (TC-IT) of the Institute has deliberated on the proposed amendments and has submitted comments to the TRP on 30 August 2012.
Members may view the Institute’s comments at the Institute’s website.
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