Private Retirement Scheme (PRS) - Updated List of Schemes Approved For Sale

Further to our e-CTIM No.68/2011, please be informed that the Securities Commission Malaysia (SCM) has on 18 January 2013, provided the updated list of schemes approved for sale under the PRS. The schemes are as follows:-

1. CIMB-Principal PRS Plus;

2. CIMB Islamic PRS Plus;

3. Hwang Private Retirement Scheme;

4. Manulife PRS NESTEGG Series;

5. Public Mutual Private Retirement Scheme-Conventional Series;

6. Public Mutual Private Retirement Scheme-Shariah-based Series; and

7. RHB Retirement Management Sdn. Bhd.

Members may view the information provided on the SCM website.

Customs (Prohibition of Imports) Order 2012 [P.U. (A) 490/2012]

1)        Customs (Prohibition of Imports) Order 2012 [P.U. (A) 490/2012]

The Order which comes into operation on 1 March 2013 provides details of goods prohibited from being imported. Further information, including description of goods, countries involved and manner of import are explained in the following Schedules:-

Item No.	Schedule	Details
i.	First Schedule	Goods the import of which is absolutely prohibited.
ii.	Part I of the Second Schedule	Goods which may not be imported into Malaysia except under an Import Licence.
Iii	Part II of the Second Schedule	Goods which may not be imported into Malaysia except under an Import Licence and shall not apply to the specified free zones.
iv.	Part III of the Second Schedule	Goods which may not be imported into Malaysia except under an Import Licence and shall not apply to Labuan, Langkawi and Tioman and the specified free zones.
v.	Part I of the Third Schedule	Goods which may not be imported into Malaysia except in the manner provided.
vi.	Part II of the Third Schedule	Goods which may not be imported into Malaysia except in the manner provided and shall not apply to the free commercial zones.
vii.	Part III of the Third Schedule	Goods which may not be imported into Malaysia except in the manner provided and applicable to goods in transit controlled under the International Trade In Endangered Species Act 2008 [Act 686].
viii.	Part I of the Fourth Schedule	Goods which may not be imported into Malaysia except confirming to the Malaysian standards and / or other standards approved by the Malaysian Authorities and in the manner provided.
ix.	Part II of the Fourth Schedule	Goods which may not be imported into Malaysia except confirming to the Malaysian standards and / or other standards approved by the Malaysian Authorities and in the manner provided and does not apply to the free commercial zones.

The Customs (Prohibition of Import) Order 2008 [P.U. (A) 86/2008] is revoked.

For further details, members may view the Order.

2)        Customs (Prohibition of Exports) Order 2012 [P.U. (A) 491/2012]

The Order which comes into operation on 1 March 2013 provides details of goods prohibited from being exported.  Further information, including description of goods, destinations and manner of export are explained in the following Schedules:-

Item No.	Schedule	Details
i.	First Schedule	Goods the export of which is absolutely prohibited.
ii.	Second Schedule	Goods which may not be exported except under an Export Licence.
iii.	Part I of the Third Schedule	Goods which may not be exported except in the manner provided.
iv.	Part II of the Third Schedule	Goods which may not be exported except in the manner provided for goods controlled under the International Trade In Endangered Species Act 2008 [Act 686].

For further details, members may view the Order. 

CALL FOR POLICY ISSUES - TO BE RAISED IN THE CUSTOMS-PRIVATE SECTOR CONSULTATIVE PANEL (CPSCP) MEETING NO.1/2013

CTIM has been invited to attend the next customs-Private Sector Consultative Panel Meeting with the Royal Malaysian Customs (RMC), which will be held soon.

In this connection, members are invited to raise relevant policy issues relating to indirect taxation for deliberation at the Technical Committee Indirect Taxation, and, where appropriate, for inclusion in the Memorandum to be submitted for discussion at the Customs-Private Sector Consultative Panel Meeting.

Your feedback should indicate the issue, and the rationale of your proposal. It should reach us not later than 25 January 2013. You may submit your feedback via email to secretariat@ctim.org.my or technical@ctim.org.my . Alternatively you may fax to the Institute at 03-2162 8990 or 2161 3207.

INCOME TAX (ACCELERATED CAPITAL ALLOWANCE) (SECURITY EQUIPMENT AND MONITORING EQUIPMENT) RULES 2013 [P.U.(A) 4/2013]

The above Rules dated 28 December 2012 are effective from the year of assessment 2013 till the year of assessment 2015 except for Rule 7 (relating to non-application of the Rules), which has effect till the year of assessment 2017.

Application (Rule 3)

The Rules apply to:

(a)  a resident individual, in respect of capital expenditure incurred on a business in the basis period for a year of assessment (YA), for the installation of any security control equipment and monitoring equipment (other than a Global Positioning System (GPS) for vehicle tracking) in a building or permanent structure used for the purpose of that business; or

(b)  a resident company incorporated under the Companies Act 1965, in respect of capital expenditure incurred on a business, in the basis period for a YA, for the installation of the following equipment:

              i.        Any security control equipment and monitoring equipment (other than a GPS for vehicle tracking) for a factory of the company, provided that the company is approved under the Industrial   Coordination Act 1987;

             ii.        Any GPS for vehicle tracking for the following vehicles used for the purpose of the business of the company :

a. A container lorry bearing Carrier Licence A and

b. A cargo lorry bearing Carrier Licence A or C

issued under the Commercial Vehicles Licensing Board Act 1987.

            iii.        Any security control equipment and monitoring equipment other than a GPS for vehicle tracking, in residential areas.

The list of security equipment and monitoring equipment to which the Rules apply are specified in the Schedule to the Rules.

Rates of allowance (Rules 5 and 6)

The rates of allowance allowed under the Rules are:

• Initial allowance - one-fifth of capital expenditure incurred (20%) [Rule 5]; 
• Annual allowance - four-fifths of capital expenditure incurred (80%) [Rule 6].

Non-application (Rule 7)

Rule 7(1) states that the Rules shall not apply in respect of an individual or company if the individual or company :

a) has been granted any incentive under the Promotion of Investments Act 1986;

b) has been granted reinvestment allowance under Schedule 7A of the Income Tax Act 1967 (ITA);

c) has been granted any exemption under section 127 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.

Rule 7(2) provides for the withdrawal of any allowance which has been allowed under Rules 5 and 6 in the basis period for a YA in a situation where, in that basis period, the individual or company sells, conveys, transfers, assigns or alienates the security control or monitoring equipment with or without consideration, within two years from the date of purchase of the equipment.

Members may read the full text of the Rules at the Attorney General Chamber's official portal under e-Federal Gazette.

Direct Taxation

I) INCOME TAX (EXEMPTION) (NO. 2) ORDER 2013 [P.U.(A) 7/2013]

The above Exemption Order is dated 17 December 2012, and is effective from the year of assessment 2013 until the year of assessment 2015.

This Order grants exemption to a company resident in Malaysia which is licensed under the Tourism Industry Act 1992 to carry on a tour operating business, from the payment of income tax in respect of the statutory income derived from group inclusive tours.

Group inclusive tour means a tour package to or of Malaysia or any place within Malaysia undertaken by tourists from outside Malaysia, inclusive of transportation by air, land or sea and accommodation.

The exemption is only available if the total number of tourists from outside Malaysia in group inclusive tours is not less than seven hundred and fifty in the basis period for a year of assessment as certified by the Ministry of Tourism Malaysia.

Members may read the full text of the Order at the Official Portal of e-Federal Gazette.

II) In this context, members may refer to e-CTIM No. 186 of 2012 dated 24 December 2012, which provided information on Income Tax (Exemption) (No.11) Order 2012 [P.U.(A) 451/2012] on domestic tour packages.

Finance Act 2013 (Act 755) gazetted on 10 January 2013

Please be informed that the Finance Act 2013 (Act 755) was gazetted on 10 January 2013.

For details, you may view the Finance Act 2013 (Act 755) at the following link http://www.federalgazette.agc.gov.my/outputaktap/20130110_755_BI_Akta%20Kewangan%202013%20(BI).pdf

Filing Programme for Income Tax Return Forms (ITRF) in the Year 2013

Please be informed that the 2012 Filing Programme will continue to be effective until the 2013 Filing Programme is issued by Inland Revenue Board (IRB).

Members may view the IRB letter at the Institute抯 website.

ASEAN INFRASTRUCTURE FUND LIMITED (AIF) - TAX EXEMPTIONS

The Asian Development Bank (ADB) and nine ASEAN countries have recently set up the ASEAN Infrastructure Fund Limited (AIFL) in Malaysia for the purpose of funding the region's infrastructure needs. The AIFL is incorporated as a Labuan company limited by shares under Section 15(3) of the Labuan Companies Act 1990.

The following tax exemptions have been accorded to AIFL by the Malaysian Authorities:

1)             Income Tax (Exemption) (No.10) Order 2012 [P.U. (A) 447/2012]

The Order grants exemption on the following:-

(a)   the ASEAN Infrastructure Fund Limited (AIFL) from all provisions of the Act; and

(b)   a non-resident employee from payment of income tax on all gains or profits derived             from his employment with AIFL.

This Order is deemed to have come into force on 24 April 2012.

2)         Exchange Control (ASEAN Infrastructure Fund) (Exemption) Order 2012 [P.U.(A) 307/2012]

The AIFL shall be treated as a non-resident for the purposes of the Exchange Control Act 1953 (ECA) and all transactions undertaken by AIFL in carrying out its purposes and functions are exempt from the obligations and prohibitions imposed under the ECA, except for three that are listed in the order.

This Order comes into operation on 24 April 2012

3)             Real Property Gains Tax (Exemption) (No.2) Order 2012 [P.U. (A) 448/2012]

The Order exempts the ASEAN Infrastructure Fund Limited from all provisions of the Act in respect of any disposal of chargeable assets after 24 April 2012.

4)            Stamp Duty (Exemption) (No.5) Order 2012 [P.U. (A) 449/2012]

           The Order exempts all instruments executed by the ASEAN Infrastructure Fund Limited (AIFL) where the stamp duty due under the Stamp Act 1949 would ordinarily be payable by AIFL are exempted from such stamp duty chargeable under the Stamp Act 1949.

5)         Labuan Business Activity Tax Act (Exemption) Order 2012 [P.U. (A) 450/2012]

The Order exempts the ASEAN Infrastructure Fund Limited from all provisions of the Act.

Members may view further details of the ASEAN Infrastructure Fund at the Asian Development Bank website (http://www.adb.org/projects/documents/asean-infrastructure-fund-rrp). 

MALAYSIAN TAX RESEARCH FOUNDATION (MTRF)

The Chartered Tax Institute of Malaysia (CTIM) has promoted the formation of a trust body called the Malaysian Tax Research Foundation (Foundation) on 11 June 2011 under the provisions of the Trustees (Incorporation) Act, 1952.  The Foundation is a body corporate separate and distinct from CTIM.

The Foundation is specifically created for the promotion, encouragement and advancement of tax research in Malaysia and is currently the only such body in Malaysia.  The objectives of the Foundation include the following:

• To put Malaysia in the forefront of taxation-related studies, through promoting an interest in tax research amongst Malaysians, by providing assistance in tax-related research work.
• To bridge the divergence between taxation law and accounting standards.
• To undertake research on the impact of any proposals for changes in tax legislation and tax administration.
• To provide scholarships to those undertaking tax research in universities.
• To encourage and promote the advancement of knowledge in taxation.
• To carry out such other legally charitable purposes for the advancement of education and training in the tax profession.
• To cooperate with other bodies and institutions with similar aims and objectives.
• To publish and disseminate literature on advancement of taxation.

The Foundation is independent from CTIM and is managed by six Trustees - eminent representatives of the tax profession and their respective organisations - Datuk Aziyah Bahauddin, Tan Sri Dato' Hasmah Abdullah, Mr SM Thanneermalai, Mr Khoo Chin Guan, Dr Veerinderjeet Singh and Dr Yeah Kim Leng.  The Foundation is now embarking on various activities to meet its objectives, one of which being the promotion of the Foundation to its key stakeholders, including, but not limited to, professional tax practitioners and accountants, industry leaders and their respective organisations, academicians and educational institutions and the policy makers.  Several broad areas of research which have been identified include:

• A survey of tax research in Malaysia and suggestions for future direction.
• 
  
• Evaluation of the effectiveness of the various fiscal incentives accorded by the Government.
• 
  
• Comparative study of individual taxation regime, in particular, the tax reliefs, tax bands structure, and tax rates, and its effect on attracting talents to Malaysia.
• 
  
• Evaluation of tax measures relating to environmental protection.

The Trustees are seeking funding contributions, ideas and proposals from its like-minded stakeholders and look forward to your support in achieving the ultimate success of the Foundation. The Inland Revenue Board has approved the Foundation's application under Section 44(6) whereby donations made to the Foundation are tax deductible for the donors, and are exempted from tax in the hands of the Foundation.

The Foundation is one of the initiatives by CTIM to advance the interest of the tax profession.  We strongly encourage members to support the Foundation financially by making monetary contribution(donation) and to provide ideas for research proposals.  Please contact the Trustees/ Foundation secretariat at the CTIM office: Tel: +603-2162 8989,  Fax: +603-2162 8990 or email: secretariat@ctim.org.my.

Direct Taxation

Please be informed that the Inland Revenue Board (IRB) has uploaded Public Rulings (PR) No.11/2012 and No.12/2012 dated 13 December 2012 and 24 December 2012 respectively. Members may view the Public Rulings on the websites of the Institute and the IRB.

PR No.11/2012: Employee Share Scheme Benefit

This Public Ruling illustrates, with examples, the tax treatment in respect of a benefit arising from employee share schemes received by an employee from his employer by reason of his employment. The PR replaces PR No.4/2004: Employer Share Option Scheme Benefit, issued on 9 December 2004.

PR No.12/2012: Share Schemes Benefit For Cross-Border Employees

The objective of this PR is to explain the tax treatment in respect of a benefit arising from an employee share scheme received by:-

(a) employees from Malaysia who are seconded to work overseas, and

(b) foreign national employees who are seconded to Malaysia.

We would be pleased if you could let us have your feedback and/or enquiry, so that we may raise it to the IRB.

New Publications - Resource Centre

The Institute is pleased to inform that the following publications are now available in the Resource Centre (for reference only). Members are encouraged to use the facilities available.

No.	Reference Books	Arthur / Editor		Publisher	Year
Handbook Series
1.	European Tax Handbook	Juhani Kesti, LL M Chief Editor Europe,		IBFD	2009
2.	Global Individual Tax Handbook	Nick Cowley, Carlos Guitierrez, Juhani Kesti, Mei-June Soo,		IBFD	2009
3.	Latin American Tax Handbook	Carlos Guitierrez		IBFD	2009
4.	North American Tax Handbook	J.G. Rienstra & K.R. Irby		IBFD & BNA	2009
5.	Global Individual Tax Handbook	Carlos Guitierrez P., Ridha Hamzaoui, Juhani Kesti, John G.Rienstra, Mei-June Soo, Ola van Boeijen - Ostaszewska		IBFD	2010
6.	Global Corporate Tax Handbook	Carlos Guitierrez P., Ridha Hamzaoui, Juhani Kesti, John G.Rienstra, Mei-June Soo, Ola van Boeijen - Ostaszewska		IBFD	2010
7.	Global Corporate Tax Handbook	Carlos Guitierrez P., Ridha Hamzaoui, John G.Rienstra, Mei-June Soo, Ola van Boeijen - Ostaszewska		IBFD	2011
8.	Global Individual Tax Handbook	Carlos Guitierrez P., Ridha Hamzaoui, John G.Rienstra, Mei-June Soo, Ola van Boeijen - Ostaszewska		IBFD	2011
9.	European Tax Handbook	Ola Van Boeijen - Ostaszewska		IBFD	2011
Books on Malaysian Taxation
10.	Malaysian Taxation Principles and Practice	Choong Kwai Fatt		InfoWorld Malaysia	2012
11.	Advanced Malaysian Taxation Principles and Practice	Choong Kwai Fatt		InfoWorld Malaysia	2012
12.	Islamic Finance Tax Considerations Around the World			PWC	2012
13.	Laws of Malaysia			MDC Publishers	2012
14.	Excise Act & Regulations			MDC Publishers	2008
15.	Tax Avoidance, Evasion and Planning in Malaysia	Dr Jeyapalan Kasipillai		CCH	2012
16.	Income Tax Deductions for Businesses Malaysia	Vincent Josef		CCH	2011
Doctorial Series
17.	Taxation of International Performing Artistes	Dick Molenaar		IBFD	2005
18.	Dispute Resolution under Tax Treaties	Zvi Daniel Altman		IBFD	2005
19.	Income from International Private Employment	Frank Potgens		IBFD	2006
International Tax Planning Series
20.	Luxembourg	Philip J.Warner		IBFD	2004
21.	Denmark	Nikolaj Bjornholm, Anders Oreby Hansen,		IBFD	2005
22.	Hungary	Daniel Deak		IBFD	2003
23.	Ireland	Charles Haccius, BL		IBFD	2004
24.	Belgium	Patrick A.A.Vanhaute		IBFD	2004
OECD Publications
25.	Transactional Profit Methods Discussion Draft for Public Comment				2008
26.	Revised Commentary on Article 7 of the OECD Model Tax Convention				2007
27.	Transfer Pricing Aspects of Business Restructurings: Discussion Draft for Public Comment				2008 - 2009
28.	Report on the Attribution of Profits to Permanent Establishments				2008
Others
29.	The New Netherlands Transfer Pricing Regime		Dr Rijkele Betten	IBFD	2002
30.	Taxation and the Financial Crisis		Julian S. Alworth, Giampaolo Arachi	Oxford University Press	2012
31.	Model Tax Convention on Income and on Capital			OECD	2010
32.	OECD Model Tax Convention on Income and on Capital (Condensed version–2005) AND Key Tax Features of Member Countries		Tiago Cassiano Neves	IBFD	2007
33.	OECD Model Tax Convention on Income and on Capital (Condensed version–2010) AND Key Tax Features of Member Countries		Luis Nouel	IBFD	2011
34.	OECD Transfer Pricing Guidelines for Multinational Enterprise and Tax Administrations (2010 Edition) AND Transfer Pricing Features of Selected Countries		Kamesh Susarla (IBFD), Antoine Glaze (Taxand)	IBFD	2011
35.	National Land Code (Act No.56 of 1965)		Lexis Nexis	MLJ Statute Series	2011
36.	Tax Agents Manual		John Gaal	CCH	2009

The following publications are also available in Compact Disc (CD) format:-

International Fiscal Association Congress Report
No.	Title	Place	Year
1.	i)    Taxation of income derived from electronic commerce (Vol. 86a) ii)   Limits on the use of low-tax regimes by multinational businesses: current / measures and emerging trends (Vol. 86b)	San Francisco	2001
2.	i)    Form and substance in tax law (Vol. 87a) ii)   The tax treatment of transfer of residence by individuals (Vol. 87b)	Oslo	2002
3.	i)    Trends in company / shareholder taxation : Single or double taxation? (Vol. 88a) ii)   Consumption taxation & financial services (Vol. 88b)	Sydney	2003
4.	i)    Double non-taxation (Vol. 89a) ii)   Group taxation (Vol. 89b)	Vienna	2004
5.	i)     Source and residence : new configuration of their principles (Vol. 90a) ii)    Tax treatment of international acquisitions of businesses (Vol. 90b)	Buenos Aires	2005
6.	i)     The tax consequences of restructuring of indebtedness (debt work-outs) (Vol. 91a) ii)    The attribution of profits to permanent establishments (Vol. 91b)	Amsterdam	2006
7.	i)     Transfer pricing and intangibles; (Vol. 92a) ii)    Conflicts in the attribution of income to a person (Vol. 92b)	Kyoto	2007
8.	i)    Non-discrimination at the crossroads of international taxation (Vol. 93a) ii)   New tendencies in tax treatment of cross-border interest of corporations (Vol. 93b)	Brussels	2008
9.	i)    Is there a permanent establishment? (Vol. 94a) ii)   Foreign exchange issues in international taxation (Vol.  94b)	Vancouver	2009
10.	i)     Tax treaties & tax avoidance: application of anti-avoidance provisions (Vol. 95a) ii)    Death as a taxable event and its international ramifications (Vol. 95b)	Rome	2010