Stamp Duty (Remission) (No.2) Order 2010 [P.U.(A) 423/2010]

Fifty per cent of stamp duty chargeable on any loan agreement executed between a Malaysian citizen purchaser and a financier to finance a purchase of one unit residential property (i.e. a house, a condominium unit, an apartment or a flat unit built as a dwelling house), costing not more than RM350,000 shall be remitted provided that

(i)            the sale and purchase agreement is executed between 1 January 2011 and 31 December 2012, both days inclusive;

(ii)           the purchaser does not own any other residential property at the date of execution of that sale and purchase agreement;

The application for remission may only be made once and is also applicable to co-purchasers.

“financier” means

(a)  a bank,

(b)  a financial institution,

(c)  an insurance company registered under the Insurance Act 1996 [Act 553],

(d)  a co-operative society registered under the Co-operative Societies Act 1993 [Act 502], or

(e)  an employer under an employee housing loan scheme.

Policy on stamp duty on service agreements and Stamp Duty (Remission) (No.4) Order 2010 [P.U.(A) 476/2010]

The Tax Analysis Division of the Ministry of Finance has issued the above policy statement on 30 December 2010.  It stipulates that service agreements executed on or after 1 January 2011 will be subject to ad valorem duty of 0.1%.  For multi-tier service agreements, ad valorem duty of 0.1% will be imposed on the first tier only. The ad valorem duty of 0.1% will be imposed on:

a)    the first tier for service agreements executed between a private entity and the service provider; or

b)    the second tier for service agreements executed between an entity which is exempted from payment of stamp duty (eg. the Government of Malaysia) and the service provider.  

The service agreements executed for other tiers will be subject to stamp duty at a fixed rate of RM50 and the excess duty will be remitted.

Following from the policy statement, the Stamp Duty (Remission) (No.4) Order 2010 [P.U.(A) 476/2010] was gazetted on 31 December 2010 to remit the stamp duty collected in excess of RM50.  

Income Tax (Exemption) (No.2) Order 2010 [P.U.(A) 478/2010]

The Minister exempts a locally incorporated resident company from payment of income tax on income received from the sale of certified emission reduction, i.e. gross income from the sale less expenditure, not being capital expenditure, incurred by the company for the purposes of obtaining certified emission reduction.  The expenditure shall be deemed to be incurred in the basis period for a year of assessment in which the income from the sale of certified emission reduction is received.  The company shall maintain a separate record for the income so exempted.

“certified emission reduction” means a Kyoto Protocol unit equal to one metric tonne of carbon dioxide equivalent, calculated in accordance with Kyoto rules and is issued for gas emission reductions from an activity of clean development mechanism project (i.e. a project of clean development mechanism approved by the Ministry of Natural Resources and Environment).

Income Tax (Deduction for Premium for Export Credit Insurance Based on Takaful Concept) Rules 2010 [P.U.(A) 428/2010]

The Rules stipulate that effective from year of assessment 2011, premiums incurred for export credit insurance based on takaful concept and paid to a company approved by the Minister shall be allowed a double deduction in arriving at the adjusted income of the business.

Labuan International Business and Financial Centre (Labuan IBFC)

The following legislations relating to the Labuan IBFC are effective from 15 December 2010.

a)  Labuan Financial Services Authority (Processing and Approval Fees)(Labuan Financial Institutions) Order 2010 [P.U.(A) 413/2010]

b)           Labuan Companies Regulations 2010 [P.U.(A) 414/2010]

c)           Labuan Trusts Regulations 2010 [P.U.(A) 415/2010]

d)           Labuan Financial Services and Securities Regulations 2010 [P.U.(A) 416/2010]

e)  Labuan Islamic Financial Services and Securities Regulations 2010 [P.U.(A) 417/2010]

f)   Labuan Foundations Regulations 2010 [P.U.(A) 418/2010]

g)  Labuan Limited Partnerships and Limited Liability Partnerships Regulations 2010 [P.U.(A) 419/2010]

Extension of time for filing of Form CP204

This is to inform that the Inland Revenue Board has agreed to grant a special extension of time to 5 January, 2011 for filing Form CP204.  The extension of time is not applicable to Form CP204A.

For companies with May 2010 year end, extension of time to file the Forms C & R by 7 January 2011 is still applicable.

Guidelines on the Implementation of Service Tax Imposition based on Budget 2011

Guidelines on the Implementation of Service Tax Imposition based on Budget 2011 has been released.

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