Stamping by Way of Franking and Official Receipt (Kew 38)

With reference to e-MIT 02/2009, item No. 6, the Institute wishes to inform that the IRB has indicated that due to some complications, the old way of stamping by way of franking on the instrument itself and by official receipt (Kew 38) is still available until further notice.

Disallowance of Filing of Tax Return in PDF Format

The Inland Revenue Board (IRB) has informed that with effect from Year of Assessment 2008, tax agents are not allowed to use tax return in pdf format for filing purposes. Tax agents are advised to use e-filing or manual filing through original printed tax return forms. This is because many of the pdf return forms have created technical difficulties for the IRB as these could not be scanned due to various reasons and the IRB staff has had to manually key in all the data from the tax return into the computer system which has created an administrative burden.

However, the PDF return form will still be available on the IRB website for the use of individual taxpayers who have not received the tax return forms and who face difficulties in coming personally to the IRB offices to obtain the original printed form.

A copy of the IRB letter may be viewed at the MIT website or click HERE.

High Court reported case pertaining to trademark laws

THE "AYAMAS" TRADEMARK CASE

Ayamas Convenience Stores Sdn. Bhd. (the Plaintiff) v. Ayamas Sdn. Bhd. (the Defendant) [1995] 1 CLJ 137

Facts: In this case, the Plaintiff was the registered proprietor in Brunei of the trade mark "AYAMAS" in respect of meat, fish, poultry and games.

The Defendant registered a company name known as Ayamas Sdn. Bhd. in the operation of the "Grandy's" fast food outlets.

The Plaintiff sued the Defendant for infringement of its registered trade mark and passing off.

The Plaintiff alleged that the Defendant infringed the Plaintiff’s registered trade mark by using the word "Ayamas" in the operation of the "Grandy's" fast food outlets in such a way as to pass off the Plaintiff’s trade mark and which was calculated to deceive customers into thinking that the goods sold by the Defendants are made by the Plaintiff.

The Defendant argued that the Plaintiffs reputation was in West Malaysia, not in Brunei. Hence, no customers were deceived and that Plaintiff had not proven existence of goodwill in Brunei.

Furthermore, the defendant argued that besides fried chicken, they had not sold other goods which were similar to the plaintiff’s goods.

Outcome of the Case:

The court held that the claim for trade mark infringement failed.

The mere use of the business name of the Defendant similar to the Plaintiff’s trade mark is not sufficient to constitute infringement.

Based on the evidence adduced, there was no attempt to persuade or mislead the Defendant's customers to believe that the products sold were the Plaintiff’s products. The Plaintiff's excellent reputation and goodwill in Malaysia must be shown to have suffered or to be likely to suffer from the Defendant's activities in confusing or misleading the public.

On the facts, no reasonable customer would be misled into thinking that the Defendant was serving the Plaintiff's products.

A trade mark protects only those goods for which the trade mark is registered. It gives no protection to anything which is not included in the specifications of goods. The proprietor thus has the exclusive rights to use the trade mark in relation to the registered goods only.

In this case, it is clear that registration of a business/company name is not itself a sufficient proof of a trademark infringement.

On the other hand, if the Defendant were to use the said name in the course of his business as their "trademark", the infringement will likely to occur.

SCHEDULAR TAX DEDUCTION -PCB 2009

New release

IRB has issued the new STD schedules taking into account the 2009 Budget proposals. The new schedule is applicable to 2009 remuneration. Bonus and directors’ fees paid in 2009 must also be based on the new 2009 schedule.

For prior year remuneration paid in 2009, the old STD tables (issued in 2004) should be used.
As a concession, employers with a large number of employees and/or using computerised payroll systems, may apply in writing to the relevant IRB branches handling their files, to continue using the old STD tables until March 2009.

In developing the new STD schedule, efforts have been taken to ensure a more accurate deduction to closely reflect the actual tax liability. Various reliefs enjoyed by the individual are now included as a factor in arriving at the deduction. Consequently, the new computation formulae may appear to be more complicated. Members are advised to read the explanatory notes carefully and familiarise themselves with the new STD rules. You may download the explanatory notes on www.hasil.gov.my/melayu/pdf/NOTA PENERANGAN KPD JADUAL PCB 2009.PDF or click HERE.

To assist employers and tax practitioners in computing the deduction, the IRB has made available the “Kalkulator PCB” on its website (http://eapps.hasil.gov.my/pcbcalc/). Employers who agree with an employee’s request to claim allowable deductions and rebates under the Income Tax Act 1967 should use the Kalkulator PCB to ascertain the amount of STD. Employers using their own computerised payroll systems must obtain specification of the STD computerised calculation method and approval from the IRB

http://www.hasil.org.my/melayu/pdf/JADUAL%20PCB%202009%20UTK%20LAMAN%20WEB.pdf

Compound for Non-Filing of Form E for Dormant Companies

In response to the submission of the professional bodies on the above matter, the Inland Revenue Board (IRB) has clarified that the compound notices were issued to active employers who failed to submit the Form E based on the records available with the IRB.

In view of the submission by the profession and the need for a practical resolution of the matter, the IRB has agreed to granting a concession whereby for cases which have not yet been settled, the IRB has agreed to withdraw the compound for employers with no employees or who are dormant or in the process of being wound up. The employer should, however, confirm its status via a letter signed by the director or the proprietor. Alternatively, the employer may submit any document that would support its claim that the business has been terminated or liquidated, etc.

The IRB has also reminded that an employer who has received a Form E must complete and file the Form on or before the due date, even if it is dormant, under liquidation or has no employees. Employers must inform the IRB if they are no longer active or are under liquidation so that the IRB can update its records.

Entertainment Expense - New PR 3/2008

ENTERTAINMENT EXPENSE
Public Ruling No. 3/2008
Date of Issue: 22 October 2008

This Ruling is effective from the year of assessment 2008 and subsequent years of assessment. This Ruling supersedes Public Ruling No. 3/2004 issued on 8 November 2004 and Addendum to Public Ruling No. 3/2004 issued on 23 August 2007.

1. This ruling explains:

(a) the tax treatment of entertainment expense as a deduction against grossincome of a business; and

(b) steps to determine the amount of entertainment expense allowable as adeduction.


2. General provision for deduction

Generally, under subsection 33(1) of the ITA, an expense wholly and exclusively incurred in the production of gross income from a source is allowable as a deduction against gross income from that source.

However, the allowable expense under subsection 33(1) of the ITA is subject to the specific prohibition under subsection39(1) of the ITA.


3. Deduction for entertainment expense

An entertainment expense that is wholly and exclusively incurred in the production of gross income under subsection 33(1) of the ITA is not allowed a deduction of fifty percent (50%) unless the entertainment expense falls within any of the specified categories in proviso (i) to (viii) of paragraph 39(1)(l) ITA, then it qualifies for adeduction of one hundred percent (100%).


4. Principles in determining the allowable entertainment expense

In determining whether an entertainment expense can be allowed as a deduction and the amount to be allowed, the following steps have to be adhered to:

(a) Determine whether the expense falls within the definition of entertainment as provided under section 18 of the ITA.

No deduction is allowed as entertainment expense if the expenditure does not fall within the definition ofentertainment.

(b) If the expense amount falls within the definition of entertainment provided under section 18 of the ITA, determine whether the expense is wholly and exclusively incurred in the production of gross income under subsection 33(1)of the ITA.

If the expense is not wholly and exclusively incurred in the production of gross income, then the expense is not allowed a deduction. The test under subsection 33(1) of the ITA is also applicable to entertainment expense as it is applicable to other expenses.

(c) If the expense is allowable under subsection 33(1) of the ITA, determine whether that expense is included under any of the categories of entertainment expense specified under proviso (i) to (viii) to paragraph 39(1)(l) of the ITA. If the expense is included under any of those provisos, a deduction of one hundred percent (100%) against gross income is allowed. The remaining entertainment expense which does not fall within the mentioned provisos is allowed a fifty percent (50%) deduction against gross income.


5. Steps to determine allowable entertainment expense

The principles mentioned in paragraph 4 should be applied in determining the amount of allowable entertainment expense. Below illustrates the tax treatment for several examples of entertainment expense:

5.1 Entertainment given to a potential customer in a closed transaction - 0% deduction (Not wholly and exclusively incurred under subsection 33(1)of the ITA)

5.2 Entertainment given to potential or existing customers during the launching of company’s new product - 100% (Proviso (vii) to paragraph 39(1)(l) of the ITA)

5.3 Wedding gift to customer - 0% (Not wholly and exclusively incurred under subsection 33(1)of the ITA)

5.4 Entertainment to employees of related companies - 0% (Not wholly and exclusively incurred under subsection 33(1)of the ITA)

5.5 Entertainment for annual general meeting of company - 0% (Not wholly and exclusively incurred under subsection 33(1)of the ITA)

5.6 Cash contribution for customer’s annual dinner- 0% (Not wholly and exclusively incurred under subsection 33(1)of the ITA)

5.7 Annual dinner to employees - 100% (Proviso (i) to paragraph 39(1)(l) of the ITA)

5.8 Gift with business logo for customer’s annual dinner - 100% (Proviso (vi) to paragraph 39(1)(l) of the ITA)

5.9 Gift without business logo for customer’s annual dinner - 50% (Not included under provisos (i) to (viii) toparagraph 39(1)(l) of theITA)

5.10 Free trip as an incentive to sales agent for achieving the sales target - 100% (Proviso (vii) to paragraph 39(1)(l) of the ITA)

5.11 Gift of flower for customer’s opening of new outlet - 50% (Not included under provisos (i) to (viii) to paragraph 39(1)(l) ofthe ITA)

5.12 Entertainment to suppliers - 50% (Not included under provisos (i) to (viii) to paragraph 39(1)(l) of the ITA)

5.13 Hampers for customers during festive seasons - 50% (Not included under provisos (i) to (viii) to paragraph 39(1)(l) ofthe ITA)

Setting Your Goals

By: Brian Tracy

In my conversations with hundreds of top salespeople over the years, I have found that they all have one thing in common. They have taken the time to sit down and create a clear blueprint for themselves and their future lives. Even if they started the process of goal setting and personal strategic planning with a little skepticism, every one of them has become a true believer.

Becoming a True Believer

Every one of them has been amazed at the incredible power of goal setting and strategic planning. Every one of them has accomplished far more than they ever believed possible in selling and they ascribe their success to the deliberate process of thinking through every aspect of their work and their lives, and then developing a detailed, written road map to get them to where they wanted to go.

The Definition of Happiness

Happiness has been defined as, "The progressive achievement of a worthy ideal, or goal." When you are working progressively, step-by-step toward something that is important to you, you generate within yourself a continuous feeling of success and achievement.

You feel more positive and motivated. You feel more in control of your own life. You feel happier and more fulfilled. You feel like a winner, and you soon develop the psychological momentum that enables you to overcome obstacles and plough through adversity as you move toward achieving the goals that are most important to you.

Determine Your Values

Personal strategic planning begins with your determining what it is you believe in and stand for-your values. Your values lie at the very core of everything you are as a human being. Your values are the unifying principles and core beliefs of your personality and your character. The virtues and qualities that you stand for are what constitute the person you have become from the beginning of your life to this moment.

Your values, virtues and inner beliefs are the axle around which the wheel of your life turns. All improvement in your life begins with you clarifying your true values and then committing yourself to live consistent with them.

Fuzzy or Clear?

Successful people are successful because they are very clear about their values. Unsuccessful people are fuzzy or unsure. Complete failures have no real values at all.

Build Self-Confidence and Self-Esteem

Values clarification is the beginning exercise in building self-confidence, self-esteem and personal character. When you take the time to think through your fundamental values, and then commit yourself to living your life consistent with them, you feel a surge of mental strength and well-being. You feel stronger and more capable. You feel more centered in the universe and more competent of accomplishing the goals you set for yourself.

Action Exercises

Here are two things you can do immediately to put these ideas into action.

First, decide for yourself what makes you truly happy and then organize your life around it. Write down your goals and make plans to achieve them.

Second, begin with your values by deciding what it is you stand for and believe in. Commit yourself to live consistent with your inner most convictions - and you'll never make another mistake.