Direct Tax

The following Orders are subsidiary tax legislation that has been gazetted recently. Members may view all the gazette Orders at the official website of the Attorney-General's Chambers (AGC).

1) Income Tax (Accelerated Capital Allowance) (Security Control Equipment and Monitoring Equipment) Rules 2013 [P.U. (A) 4/2013] (gazetted on 02/01/2013);

2) Income Tax (Exemption) Order 2013 [P.U.(A) 3/2013] (gazetted on 02/01/2013);

3) Income Tax (Industrial Building Allowance) (Child Care Centre) Rules 2013 [P.U.(A) 2/2013] (gazetted on 02/01/2013);

4) Income Tax (Industrial Building Allowance) (Kindergarten) Rules 2013 [P.U.(A) 1/2013] (gazetted on 02/01/2013);

5) Income Tax (Deduction From Remunerations) (Amendment) (No.2) Rules 2012 [P.U. (A) 469/2012] (gazetted on 27/12/2012);

6) Limited Liability Partnerships Regulations 2012 [P.U.(A) 462/2012] (gazetted on 24/12/2012);

Below are some of the Orders gazetted recently which may be of interest to members:

1) Employees Provident Fund (Addition And Modification To The Purposes For Withdrawal Under Subsection 54(6)) Order 2012 [P.U. (A) 498/2012] (gazetted On 31/12/2012)

2) Labuan Financial Services Authority (Processing And Approval Fees) (Labuan Financial Institutions) Order 2012 [P.U. (A) 495/2012] (gazetted On 31/12/2012)

3) Minimum Wages (Amendment) Order 2012 [P.U. (A) 470/2012] (gazetted on 28/12/2012);

4) Capital Markets and Services (Amendment to Schedule 8) Order 2012 [P.U.(A) 473/2012] (gazetted on 28/12/2012);

5) Capital Markets and Services Regulations 2012 [P.U.(A) 474/2012] (gazetted on 28/12/2012);

6) Capital Markets and Services (Amendment of Schedule 2) Order 2012 [P.U.(A) 475/2012] (gazetted on 28/12/2012);

7) Capital Markets and Services (Non-Application of Division 5 of Part VI) (Business Trust) Order 2012 [P.U.(A) 476/2012] (gazetted on 28/12/2012);

8) Capital Markets and Services (Non-Application of Division 5 of Part VI) (Wholesale Fund) Order 2012 [P.U.(A) 477/2012] (gazetted on 28/12/2012);

9) Capital Markets and Services (Prescription of Islamic Securities) Order 2012 [P.U.(A) 478/2012] (gazetted on 28/12/2012);

10) Capital Markets and Services (Prescription of Capital Market Product) (Islamic Capital Market Product) Order 2012 [P.U.(A) 479/2012 (gazetted on 28/12/2012);

11) Capital Markets and Services (Capital Market Compensation Fund) Regulations 2012 [P.U.(A) 480/2012 (gazetted on 28/12/2012);

12) Capital Markets and Services (Amendment of Schedule 5, 6 and 7) Order 2012 [P.U.(A) 481/2012] (gazetted on 28/12/2012);

13) Capital Markets and Services (Capital Market Compensation Fund) (Contribution) Regulations 2012 [P.U.(A) 482/2012] (gazetted on 28/12/2012);

14) Capital Markets and Services (Fees) Regulations 2012 [P.U.(A) 483/2012] (gazetted on 28/12/2012);and

15) Consumer Protection (Electronic Trade Transactions) Regulations 2012 [P.U. (A) 458/2012] (gazetted on 21/12/2012).

IRB Media Release - Decentralisation of Company (C) files and Real Property Gains Tax (RPGT) files to IRBM branches in the Klang Valley

The Inland Revenue Board Malaysia (IRBM) has notified that from 1 January 2013, the following arrangements are in place:

1) In respect of companies that had reported earnings not exceeding RM5 million in their Income Tax Return Forms for 2011 and prior years -

a) The assessment files for Company (C) category Income Tax and Real Property Gains Tax (RPGT) will now be handled by the various IRB branches in the Klang Valley (Shah Alam, Petaling Jaya, Klang, Jalan Duta, Kuala Lumpur Bandar, Cheras and Wangsa Maju).

b) The basis of allocation to the various branches is by reference to the post code of the company's business premises.

2) The Corporate Tax Department in Jalan Duta, Kuala Lumpur -

a) will handle Special Industry Companies files (Banking, Financial Institutions, Insurance, Housing Developers and Contractors), and

b) will handle employer files of companies under the Corporate Tax Department. (Such files were handled by IRBM branches in the Klang Valley, such as Shah Alam, Petaling Jaya, Klang, Jalan Duta, Kuala Lumpur Bandar, Cheras and Wangsa Maju, in the past.)

3) For business premises with addresses outside the Klang Valley, decentralisation is based on the latest correspondence address recorded with IRBM.

Telephone and fax numbers have been provided for making inquiries regarding the location of the files involved in the decentralisation exercise.

Members may view the IRB Media Release at IRB website.

PUBLIC RULING NO. 10/2012 - TAX TREATMENT OF A MALAYSIAN SHIP

TAX TREATMENT OF MALAYSIAN SHIP

TAX (EXEMPTION) (NO.11) ORDER 2012 [P.U.(A) 451/2012]

The Order, which has effect from the year of assessment 2013 until the year of assessment 2015, exempts a company resident in Malaysia which is licensed under the Tourism Industry Act 1992 to carry on a tour operating business, from the payment of income tax in respect of the statutory income derived from domestic tours.

The exemption shall only apply if the total number of local tourists on domestic tours relating to the company is not less than one thousand five hundred, certified by a letter from the Ministry of Tourism Malaysia, in the basis period for a year of assessment.

Definitions:

Domestic tour means a tour package for travel within Malaysia undertaken by local tourists inclusive of transportation by air, land, or sea and accommodation.

Local tourist means individuals who are Malaysian citizens or residing in Malaysia.

Tour operating business has the same meaning assigned to it under subsection 2(1) of the Tourism Industry Act 1992 [Act 4882].

Members may read the full text of the Order at the Official Portal of e-Federal Gazette.

IRB Media Release - Closure of e-Filing System for Year Assessment 2011

Please take note that the Inland Revenue Board (IRB) e-Filing system for e-BE, e-B, e-M, e-P, e-E, e-C and e-R for Year of Assessment 2011 will cease operations with effect from 1 January 2013.

In view of the above, taxpayers who have not furnished their returns by then will have to do so manually. Taxpayers may obtain the relevant forms from any IRB branch.

For further inquiries and assistance, members may email the IRB at e_filing@hasil.gov.my or call 1-800-88-LHDN (5436).

The IRB Media Release may be viewed at the CTIM website or the IRB website.

MIDA ONLINE APPLICATION FOR DUTY EXEMPTION USING DIGITAL CERTIFICATE

Please be informed that the Malaysian Investment Development Authority (MIDA) has its MIDA e-Services Portal to assist members of the public in applying for their manufacturing licences as well as duty exemptions.

The online applications available.

For further details, members may view the following user guides from MIDA website:


Software and Hardware Requirements
General User Guide
Application Form User Manual

INDIRECT TAX

1. Sales Tax (Rates of Tax No.1) Order 2012 [P.U. (A) 354/2012]

With effect from 31 October 2012, all goods (except goods exempt under Section 8 of the Sales Tax Act 1972 and goods imported on or with any person entering Malaysia or in the baggage of such person and intended for non-commercial use (excluding motor vehicles, alcoholic beverages, spirits, tobacco, cigarettes, tyres and tube)) shall be subject to sales tax at 10%.

The Sales Tax (Rates of Tax No.1) Order 2008 [P.U. (A) 92/2008] is revoked.

2. Sales Tax (Rates of Tax No.2) Order 2012 [P.U. (A) 355/2012

Notwithstanding the above (Sales Tax (Rates of Tax No.1) Order 2012 [P.U. (A) 354/2012], with effect from 31 October 2012, the goods appearing in

(a) The First Schedule shall not be subject to sales tax;

(b) The Second Schedule shall be subject to sales tax at 5%;

(c) The Third Schedule shall be subject to sales tax at 20%;

(d) The Fourth Schedule shall be subject to sales tax at the rate specified.

The Sales Tax (Rates of Tax No.2) Order 2008 [P.U. (A) 93/2008] is revoked.