JOINT TAX WORKING GROUP ON FINANCIAL REPORTING STANDARDS (JTWG-FRS)

Please be informed that the Joint Tax Working Group on Financial Reporting Standards (JTWG-FRS) has further reviewed the following Malaysian Financial Reporting Standards (MFRS)/ Financial Reporting Standards (FRS) and has circulated to members for comments the draft Discussion Papers on tax implications related to the implementation of the MFRS/ FRS:

MFRS 117/ FRS 117 Leases (Discussion Paper updated June 2012)

MFRS 119/ FRS 119 Employee Benefits

MFRS 136/ FRS 136 Impairment of Assets

IC 12 Service Concession Arrangements

The JTWG-FRS has now finalised the Discussion Papers and is pleased to issue them for members’ information which can now be downloaded from the Institute’s website at http://www.ctim.org.my/news.asp?menuid=42.

The JTWG-FRS will be having dialogues with Tax Authorities on the tax implications highlighted in the Discussion Papers. Members will be informed of the outcome in due course.

Please be guided accordingly.

Dialogue on Stamp Duty

In 2 November 2011, the Inland Revenue Board had a briefing session with the professional bodies on the Government’s intention to revamp the Stamp Act 1949. Feedback was sought from the stakeholders. A Stamp Duty Task Force was formed by CTIM together with The Malaysian Institute of Certified Public Accountants to look into stamp duty issues. A paper, entitled Joint Review on Stamp Act 1949 was submitted to the IRB on 30 January 2012.

Following from the submissions made by the various stakeholders, a dialogue was called by the Ministry of Finance (MOF) on Friday, 5th July 2013 to provide feed-back on the stamp duty review proposals received. The meeting was held at Menara Hasil, Cyberjaya and chaired by Puan Khodijah, Senior Deputy Under-Secretary (Policy) of Tax Analysis Division.

Several of the key proposals by CTIM/MICPA and other stakeholders were rejected by the authorities, including:
- Proposal to remove ad valorem stamp duty and to reintroduce fixed duty (RM10) on service agreements;
- Proposal to remove “instruments of any kind whatsoever” in related to Item 22 and to expressly specify the instruments to which item 22 applies;
- Proposal to exempt all facility documents which are ancillary to a Contract Note where the Contract Note, as the principal instrument, is chargeable with stamp duty;
- Proposal to increase the grace period for stamping from 30 days to 60days.

CTIM/MICPA’s proposal to allow a stamp duty exemption for transfers by way of gift between parent and child; grandparent and grandchild is still under consideration.

The IRB went on to present its proposals including the following:
- Proposal to widen the term “instrument” to include electronic documents – the IRB indicated that they would provide guidance on what this would encompass
- Proposal to introduce an optional self-assessment system for stamp duty in relation to transfers of real property, shares, leases of real property and financial transactions
- Proposal to impose stamp duty on agreements for the sale of real property or on the first instrument relating thereto
- Proposal to increase the rate of stamp duty in relation to item 32(a) by introducing a 4% rate in relation to property values in excess of RM1,500,000. The current maximum rate of 3% will apply to property between RM500,000 to RM1,500,000
- Proposal to reduce the rate of stamp duty on share transfers under item 32(b) to 0.1%
- Proposal to allow the Collector of Stamp Duty to make an assessment based on ‘best judgement.’

Several of the stakeholders provided their initial comments and concerns in relation to the IRB’s proposals and it was agreed that the stakeholders would provide their written feed-back by the end of July 2013 for further deliberation by the authorities.

GOOD AND SERVICES TAX (GST) TRAINING COURSE

THE IMPORTANCE OF BEING GST READY

GST is an indirect tax that may affect all inputs and outputs of a business organisation and this tax will replace the existing sales and services tax regime. To you are GST ready, a coordinated effort within the business organisation is essential. It is just not another tax issues to be left only with the Finance and Accounts Department. Rather, it is a “cross functional” issue that can affect the entire business structure and hence require input from all key business units.


Attendance to all sessions is compulsory. The Royal Malaysian Customs Department will only issue a Certificate of Attendance to those participants who attend all sessions, sit for and pass the examination.

COURSE DATES		REVISION SESSIONS		EXAMINATION DATE
21 August 22 August 24 August 28 August 29 August	4 September 5 September 7 September 11 September 12 September	14 September 18 September 19 September		21 September
Time: 9.00 am – 5.00 pm			Venue: Renaissance Hotel, Kuala Lumpur

Click HERE for brochure and registration form.

For more information or clarification on the above, kindly contact the CPD Secretariat as follows:

Telephone : 03-2162 8989
Facsimile : 03-2161 3207 / 03-2162 8990
Email : cpd@ctim.org.my

Website : www.ctim.org.my

Contact Person:
Mr Yus : ext 121 / yusfariza@ctim.org.my

Ms Jason : ext 108 / jason@ctim.org.my

Ms Ally : ext 123 / ally@ctim.org.my

IRB Operating Hours during Ramadhan (Fasting Month)

The operating hours of Inland Revenue Board (IRB) during the fasting month (beginning from 10 July, subject to confirmation) will be from 7.30 a.m. to 5.00 p.m. The IRB also informs that during the Ramadhan, its afternoon break time will be shortened from one hour to 30 minutes. Nevertheless, taxpayers can still manage their taxation matters via the electronic services provided by IRB at www.hasil.gov.my.

Members may view the Media Release at the websites of the Institute and IRB.

The English Version of IRB Tax Audit Framework 2013

1) The English Version of IRB Tax Audit Framework 2013

Further to our e-CTIM TECH 58-2013, the IRB Tax Audit Framework 2013 is now available in English. Members may view the Framework at the websites of the Institute and the IRB.

2) Income Tax (Deduction For Cost Of Acquisition Of Foreign Owned Company) Rules 2013 [P.U. (A) 218/2013]

The above Rules were gazetted on 4 July 2013, and are deemed to have come into operation on 3 July 2012. Members may view the Rules at e-Federal Gazette of the Attorney General’s Chamber’s website.

Relocation of Alor Setar Investigation Branch of Inland Revenue Board (IRB)

Please be informed that the Alor Setar Investigation Branch of Inland Revenue Board (IRB) will begin to move to the following address on 8 July 2013 (Monday):-

Inland Revenue Board of Malaysia,

Alor Setar Investigation Branch,

3rd Floor, Wisma PERKESO

Jalan Telok Wanjah,

05200 Alor Setar, Kedah Darul Aman.

General Line: 04-7349115

Fax No.: 04-7322230

Members may view the Announcement at the IRB website.

GUIDELINES RELATING TO FORM CP58

The Inland Revenue Board (IRB) has issued the following guidelines (in Bahasa Malaysia) on 1 July, 2013 to provide guidance on the duty to submit particulars of payments to agents, dealers and distributors in Form CP58, as required under S.83A of the Income Tax Act 1967 (ITA):

Garis Panduan Berkaitan Tanggungjawab Mengemukakan Butiran Bayaran Kepada Ejen, Pengedar Atau Pengagih Dalam Borang CP58 Bagi Maksud Peruntukan Di bawah Section 83A Akta Cukai Pendapatan 1967 (ACP 1987).

The following are salient points from the Guidelines:

1. Types of payments

· Payments to Agents, Dealers and Distributors, whether in monetary or non-monetary form, may represent taxable income of the recipient. Monetary payments are payments in cash, like commission and bonus. Examples of non-cash incentives are perquisites, products of the payer company, and points redemption.

2. Duties of the payer company

· The payer company is required to prepare Form CP58 (which can be downloaded from the IRB official website) for all recipients of incentives, but it is only required to provide a copy of the Form to each recipient of more than RM5,000, by 31 March of the following year.

· It is also required to keep the list of particulars of all recipients of incentives for a period of 7 years from the basis year in which the incentive is given.

3. Application

· The payer company must submit Form CP58 in the year in which the incentive is given while the recipient has to declare the amounts shown in the CP58 as income in the year the incentive is received. In general, the amount of incentives given is allowed as a deduction to the payer under S33(1) of the ITA.

· The types of incentives to be included, as found in Examples provided in the Guidelines, are listed in the table below:

Example (No.)	Type of incentive
	Cash incentive
1.	Commission paid to agents Note that paragraph 1.3 of the Guidelines refers to “commission and bonus” as examples of cash incentives.
	Non-cash incentives
2.	Tour package to New Zealand for dealers
3.	Same as above (package awarded to Dealer A is passed on to Dealer B as a gift)
4	Sponsorship of seminar for dealers
5	Residential property awarded to a dealer
6	Own product awarded to dealers by company dealing in cosmetics
7	Lucky draw for dealers for the prizes of a house, a car and a computer

· In the following examples, the filing of Form CP58 is not required:

Example (No.)	Type of incentive
	Not to be included as ‘incentives’
8	Bulk discount given by a company dealing in health products to a supermarket on the wholesale purchase of health products by the supermarket.
9	Credit rebate given to the supermarket in Example 8 for prompt payment of trade debt.
	Recipient not an ‘Agent’
10	Gift of a purse for customers under “Customer get customer” promotion by a company dealing in branded bags.

You may write to the Institute at technical@ctim.org.my or secretariat@ctim.org.my in respect of any concern or comments you may have on the Guidelines.