Deadline to submit tax return forms and payment of balance of tax for year of assessment 2009 (business source of income).

The IRB has issued a Press Release dated 11 June 2010 detailing the types of return forms which need to comply with the filing deadline of 30 June 2010. Mention was also made about the fines which will be imposed for late filing of the said return forms.

The press release may be viewed at the website of IRB at

http://www.hasil.gov.my/lhdnv3e/documents/maklumat_terkini/Press%20Release%20dateline%2030%20June%202010%20-%20business%20income%20earner-%20edited.pdf

Public Ruling No. 2/2010 - Allowable pre-operational and pre-commencement business expenses

The Inland Revenue Board (IRB) has issued Public Ruling No. 2/2010 (effective for year of assessment 2010 and subsequent years of assessment) on 3 June 2010. This Public Ruling supersedes the earlier Public Ruling No. 2/2002 issued on 8 July 2002.

Some of the changes observed are as follows:

-       The maximum authorised share capital requirement for companies eligible to claim a deduction for incorporation expenses has been increased from RM250,000 (for companies incorporated in Malaysia on or after 1.1.1973 but prior to 13.09.2003) to RM2,500,000 (for companies incorporated in Malaysia on or after 13.09.2003).

A sole proprietorship or partnership which converted to a private limited company, with an authorised share capital of not more than RM2,500,000, is also eligible for the above deduction.

-       Establishment expenditure of the following types of entities may also qualify for a deduction against the gross income in ascertaining the adjusted income of the business:

·         a Real Estate Investment Trust (REIT)

·         a Property Trust Fund (PTF), and

·         an Islamic stock broking company

-       With effect from the year of assessment 2009, a person may claim a deduction for expenses incurred in respect of recruitment of employees prior to the commencement of his business. The expenses must be incurred within 1 year prior to the commencement of its business.

The Public Ruling may be downloaded from the website of IRB at:

http://www.hasil.gov.my/lhdnv3e/documents/maklumat_terkini/Allowable%20pre-op%20%20business%20expenses%203%206%202010.pdf

Members can also view the information from the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

Minutes of Filing Programme Working Group (DESIRE) Meeting No. 1/2010

The minutes of the DESIRE meeting No. 1 of 2010, held on 30 March 2010, have been released. It may be downloaded at the Institute’s website at

Members can also view the information from the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

Public Ruling on Withholding Tax on Section 4(f) Income (PR 01-2010)

Public Ruling No. 1 of 2010 (on withholding tax on Section 4(f) Income), dated 19 April 2010 has been released.  It may be downloaded from the website of IRB at http://www.hasil.gov.my/lhdnv3/documents/maklumat_terkini/KU%2001_2010.pdf.

Members can also view the information from the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

Addendum 4 to Benefits-in-kind (PR 02-2004)

This addendum provides clarification on the determination of Benefits-in-kind in respect of petrol provided free by employers.  The addendum to the Public Ruling can be downloaded from the website of the Inland Revenue Board’s website at http://www.hasil.gov.my/lhdnv3e/documents/maklumat_terkini/Fourth%20Add%20KU%202-2004.pdf . 

Members can also view the information at the Institute’s website at http://www.ctim.org.my/technical_techdev_direct.asp

Income tax relief on interest from housing loan

The Inland Revenue Board (IRB) issued a media release on the matter on 9 April 2010. It essentially states the conditions under which a relief may be claimed in respect of interest on housing loans taken by an individual

The media release can be downloaded at the IRB’s webwite at http://www.hasil.gov.my/lhdnv3/index.jsp?process=4100&newsid=84.  Members can also view the information from the website of the Institute at http://www.ctim.org.my/technical_techdev_direct.asp

Income Tax (Industrial Building Allowance)(Building under Privatisation Project and Private Financing Initiatives) Rules 2010 [P.U.(A) 119/2010]

The Rules stipulate that a building constructed under a privatisation project and private financing initiatives by the Privatization/PFI Committee, Public Private Partnership Unit, Prime Minister’s Department; and pursuant to an agreement entered into between a person and the Government of Malaysia or statutory body on a build-lease-maintain-transfer basis (BLMT Agreement) and for which no consideration has been paid by the Government of Malaysia or statutory body to that person, shall be treated as an industrial building with effect from the year of assessment 2009. 

The initial allowance and annual allowance of the industrial building shall be 10% and 6% respectively.  The balance of residual expenditure shall be reduced by the amount of any compensation received by such person; and the disposal value of the asset shall be taken to be zero when the BLMT agreement expires.