E-mail scam – Tax refund

The Inland Revenue Board (IRB) has issued a Press Release dated 21 July 2010 to caution the public against a new e-mail scam purportedly issued by the IRB and requesting taxpayers to take immediate action to claim his/her tax credit amounting to RM700.

The Press Release may be viewed at the website of IRB at

http://www.hasil.gov.my/lhdnv3e/documents/maklumat_terkini/Kenyataan%20Media%20e-mel%20Bayaran%20Balik%20PALSU.pdf

PRACTICE CONTINUATION ARRANGEMENT

Dear Member Firm

Section 520 of the Institute's By Laws: Death or Incapacity of a Sole Practitioner requires a sole practitioner to ensure that he or she has entered into an arrangement to enable his/ her practice to continue with minimum disruption in the event of his/ her death or incapacity, in either of the following ways :-

(a) by entering into an agreement with another sole practitioner or with a member firm; or

(b) by satisfying the Council that other adequate provision has been made.

It is therefore important for a sole practitioner, to protect both his or her own interests as well as the interests of the clients to enter into such arrangements with another member or firm as this will enable the practice to be carried on with minimum disruption in the event of incapacity or death.

In this regard, the Institute has decided to assist sole-practitioners in complying with the said By-Law by way of providing a guideline in the preparation of a practice continuation arrangement. The document can also be downloaded from the Institute's website under the Public Practice section. Copied below is the direct link to the page:

http://www.mia.org.my/new/pp_knowledge_guide_managing.asp

Please take note that to determine the value of your firm you are requested to seek an expert's advice and not just rely on the guideline. The continuity agreement is a legal document and it is important that you obtain legal advice to ensure the arrangement is properly drawn up, can be implemented quickly and contains appropriate termination clauses.

Please note that failure to comply with the above is an infringement of the By-Law and may subject the member to investigation and disciplinary proceedings.

Please refer to the direct link below to find more information on the Institute's By-Laws under Section 520: Death or Incapacity of a Sole Practitioner:

http://www.mia.org.my/downloads/institute/legislation/bylaws20080731.pdf

Please also find attachments for more information about the Practice Continuation Arrangement.

Should you require further clarification, please contact Azlina/Azuraini from the Membership Department at 03-22799305/342 or email at memberfirm@mia.org.my.

Click HERE to download PCA-Outline of the salient clauses.

Click HERE to download Practice Continuation Arrangement guideline (PCA).

Guidelines on Petroleum Income Tax (PITA)

In the 2010 Budget it was proposed that, with effect from the year of assessment 2010, upstream petroleum companies subject to tax under the Petroleum (Income Tax) Act 1967 (PITA) will be placed under the self-assessment system and assessed to tax on a current year basis.

In view of the above, the Inland Revenue Board has issued guidelines (available only in the Bahasa Malaysia language) on 03 June 2010 to explain the amendments to the PITA.

Members may download the guidelines from the website of the IRB at http://www.hasil.gov.my/lhdnv3/documents/GarisPanduanTeknikal/Garis_Panduan_PITA.pdf

or view the guidelines on the Institute’s website at http://www.ctim.org.my/technical_techdev_direct.asp

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