Tax Incentive for Structured Internship Programme

In response to the email enquiry made by the Institute on 22 December, 2011, Talent Corporation Malaysia Berhad (Talent Corp) has provided clarification as follows:

1)        What are the types of expenses which would qualify for the double deduction, e.g. monthly allowance, training costs, orientation/induction costs, administrative costs, etc?

The expenses that qualify for the double deduction are all related expenses incurred on the interns.  Example:

·               Cash and cash equivalent allowance.

·               Cost of training offered during the internship programme.

·               Meals, transport and accommodation allowances.

·               Payment to the Outsourced Party running or administering the programme.

2)        What are the qualifying criteria for a structured internship programme?

The qualifying criteria are:

·               Partnership or companies with share capital – min RM 2.5 m.

·               Revenue – average RM21m.

·               Headcounts for Manufacturing – min 100FTEs.

·               Headcounts for Non-manufacturing – 50 FTEs.

·               Years of establishment – min 5 years, 3-5 years may be considered if the companies meet above criteria

3)        Who is eligible for the internship programme?  Is the incentive available to all sectors?  Under Section 34(6)(n), the trainee must be a resident and must not be an employee of the claimant.  Will the same conditions apply?

Companies that meet the criteria. It is available to all sectors.  This internship only applies to local undergraduate students who are pursuing a first degree (or equivalent) and not employees (such as management trainee).

4)        Are foreign institutes of higher education and foreign students studying in local institutes of higher education allowed to participate in this programme?

No.  The double tax deduction is only applicable to Malaysian students from locally based universities only.

5)        Are participating companies required to be registered with the Ministry of Higher Education or Talent Corporation Malaysia Berhad?

Talent Corporation Malaysia Berhad.

6)        What are the procedures for participating in this programme?

Kindly visit our website www.talentcorp.com.my starting from January 2012.  

7)        Certain universities/colleges provide courses with compulsory practical/vocational training.  Are the companies/enterprises participating in providing the training eligible for the incentives?

The companies have to meet the criteria and the structured internship programme has to be endorsed by Talent Corp.

In addition to the above, Talent Corp has also provided the relevant information in Frequently Asked Questions (Companies) and Frequently Asked Questions (The Internship Programme).  You may view the document at the website of the Institute.

GUIDE TO PRACTICE MANAGEMENT FOR SMALL AND MEDIUM-SIZED PRACTICES (SECOND EDITION)

The Institute is pleased to inform you that the Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) has released the second edition of its Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide). First released in 2010 and developed with CPA Australia, the new edition of the guide features guidance on several new topics, including cloud computing and updated resources for further reading.

To help practitioners improve the management of their accounting practices, this guide includes an extended case study, a sample office procedures manual, and numerous checklists and other worksheets. The comprehensive guide is comprised of eight standalone modules that include developing a growth strategy, managing staff and client relationships, risk management, succession planning, and more. An updated companion guide to help members make the best use of the PM guide will be released in early 2012.

The second edition of the PM Guide can be downloaded free of charge at IFAC website at https://www.ifac.org/publications-resources/guide-practice-management-small-and-medium-sized-practices .

Please be guided accordingly.

Public Ruling No.12/2011 on Tax Exemption on Employment Income of Non-Citizen Individuals Working for Certain Companies in Malaysia

Please be informed that the Inland Revenue Board (IRB) has just uploaded Public Ruling No.12/2011: Tax Exemption on Employment Income of Non-Citizen Individuals Working for Certain Companies in Malaysia.  You may view the Public Ruling on the website of the Institute and the website of the IRB.

Please study the Public Rulings carefully and let us have your feedback and any enquiry so that we may raise it to the IRB.

Public Ruling No.11/2011 on Bilateral Credit and Unilateral Credit

Please be informed that the Inland Revenue Board (IRB) has just uploaded Public Ruling No.11/2011: Bilateral Credit and Unilateral Credit dated 20 December 2011.  You may view the Public Ruling on the website of the Institute and the website of the IRB.

Income Tax (Exemption) (No.9) Order 2011 [P.U. (A) 421/2011]

50% of the gross housing allowance and gross Labuan Territory allowance received by an individual Malaysian citizen from exercising an employment in Labuan with a Labuan entity is exempted from income tax from YA 2011 to YA 2020.

Income Tax (Exemption) (No.8) Order 2011 [P.U. (A) 420/2011]

50% of the gross employment income received by an individual non-Malaysian citizen in a managerial capacity with a Labuan entity in Labuan, co-located office or marketing office is exempted from income tax from YA 2011 to YA 2020.

Co-located office means an office of a Labuan entity approved by the Labuan Financial Services Authority which operates in other parts of Malaysia to perform the functions assigned by the Labuan Entity.

Marketing office means a marketing office of a Labuan entity approved by the Labuan Financial Services Authority which is located in other parts of Malaysia to facilitate meetings with clients and establish contacts with potential clients except exercising trading activities on behalf of the Labuan Entity

Income Tax (Exemption) (No.7) Order 2011 [P.U. (A) 419/2011]

Fees received by an individual non-Malaysian citizen as a director of a Labuan entity are exempted from income tax from YA 2011 to YA 2020.