Table of ContentsPage Number

1 Human Resource Development Fund Gazette Orders

……………………………………………....... 3

2 Special Voluntary Disclosure Programme(“SVDP”) Update

……………………………………………....... 5

3 Sales and Service Tax Guides Updates ……………………………………………....... 6

4 International Tax Issues due to COVID-19 Travel Restrictions

……………………………………………....... 7

5 Stamp Duty Gazette Orders ……………………………………………....... 8

6 Income Tax Gazette Orders ……………………………………………....... 9

Human Resource Development Fund Gazette Orders

3 | ANC TaxLetter | Issue 31

Gazette Order

Description

P.U.(A)

84/2021

Pembangunan Sumber Manusia Berhad (Amendment of First Schedule) Order 2021

In order to strengthen the lifelong learning for skills enhancements, the Human Resource Development

Fund (“HRDF”) has widened its scope of coverage in Part I of First Schedule of Pembangunan Sumber

Manusia Berhad (“PSMB”) Act 2001 as follows:

In Part II of the First Schedule of PSMB Act 2001, employer with:-

i. Five (5) to nine (9) employees; and

ii. Five (5) or more but less than five hundred thousand (500,000) employees which is non-

governmental organization and carrying out labour union; religious organization; political

organization; nursing care facilities, including nursing home for elderly person, disable person,

orphanage, chemicals abuser or any welfare services; or social work without lodging.

may opt to register with HRDF:

Effective 1 March 2021.

P.U.(A)

85/2021

Pembangunan Sumber Manusia Berhad (Exemption of Levy) Order 2021

Nevertheless, relaxation is given to new employers as the HRDF contribution will be exempted effective

from 1 March 2021 to 31 May 2021. Therefore, the actual contribution date will commence on 1 June 2021.

First Schedule of PSMB Act 2001

Class of Employer Class of Employer(New)

a) Manufacturing Sectorb) Service Sectorc) Mining and Quarrying Sector

Employers with ten or more employees. Kindly refer toPage 4 for the relevant industries.

First Schedule Levy Rate of Monthly Wages of Each of the Malaysian Citizen Employee (%)

Part I 1.0%

Part II 0.5%** If the number of employees more than maximum number stated, therate of levy shall increase to 1%.

Human Resource Development Fund Gazette Orders

4 | ANC TaxLetter | Issue 31

Gazette Order

Description

P.U.(A)

84/2021

Pembangunan Sumber Manusia Berhad (Amendment of First Schedule) Order 2021

New industries covered under Part I of the First Schedule of PSMB Act 2001:-

Agriculture and Farming

Livestock and Fisheries Forestry and Logging

Mining and Quarrying

Manufacturing and Production

Trading, Business and Wholesale

Construction Gas and Steam

Supply Real Estate Culture, Arts and Entertainment

Water

Fashion and Clothing

Tourism and Recreation Service Sewerage

Franchise Electricity Oil Management and Remediation of Solid, Liquid

and Gaseous Waste

Automotive Transportation Repair and Maintenance

Storage

Delivery Food and Beverages Information System Communication and Multimedia

Broadcasting and Film

Banking and Finance Insurance and Takaful

Investment

Co-operative Societies

Professional Science and Technology

Research and Development

Science and Technicality

Administration and Support Service

Education Medical and Health Facilities

Social Welfare Administration of Organization Membership

Small and Medium Enterprises

Household Goods and Services

Sports Energy and Natural Resources

Personal Services

Special Voluntary Disclosure Programme (“SVDP”) Update

5 | ANC TaxLetter | Issue 31

Description

There are allegations that the Inland Revenue Board of Malaysia (“IRBM”) has made a U-turn on the treatments on taxpayers

who took part in the Special Voluntary Disclosure Programme (“SVDP”), which was implemented from 3 November 2018 to 30

September 2019.

On 9 March 2021, IRBM has denied such allegations and clarified that treatments on each case were based on facts and

merits. The IRBM mentioned that a total of 286,428 taxpayers have participated in SVDP, with a total taxes and penalties

collection of RM7.877 billion, and 11,176 were new taxpayers.

IRBM gave its assurance that it would accept their SVDP in good faith, provided full income and payment has been made within

the stipulated period. Nevertheless, the computation of tax will still be checked to ensure the accuracy of the SVDP made.

Sales and Service Tax Guides Updates

6 | ANC TaxLetter | Issue 31Description

Guide on Information Technology Services

In accordance with an update on Example 24 provided in the Information Technology (“IT”) Services Guide, a registered person

who fulfill the following conditions:-

a) Registered person under Service Tax Act 2018 and account for service tax using SST-02 form;

b) Provide same services to customer as imported taxable services acquired;

c) Imported taxable service is for furtherance of business and not for personal consumption; and

d) Has paid amount payable for the imported taxable service to the service provider.

is granted exemption by Minister to account and pay service tax on imported taxable service based on the self-recipient

accounting, under the Service Tax Policy (“STP”) No. 2/2020.

Effective 1 January 2020.

Guide on Digital Services by Foreign Service Provider (“FSP”)

The Royal Malaysian Customs Department (“RMCD”) has clarified that the following are defined as Digital Services:-

a) Digital image which can be downloaded online;

b) Presentation template which can be downloaded via dedicated cloud-based storage; and

c) 3D drawing which has been purchased from overseas company but received in a form of softcopy.

Pursuant to Paragraph 23 of the Guide, effective from 14 May 2020, exemption is given to Foreign Registered Person (“FRP”) or

FSP that provides digital service to Malaysia’s company within the same group of companies. Meanwhile, FRP who provides

digital service only to a company in Malaysia who is in the same group of companies may apply for cancellation of registration.

Kindly refer to Paragraph 4 to Paragraph 7 of the First Schedule of the Service Tax Regulations 2018 for the qualifying

conditions of a company to be within a group of companies.

Effective from 1 January 2021, the Director General may:-

a) Upon application of FRP, approve service tax to be due at the time when invoice is issued;

b) Credit notes and debit notes shall be issued by FRP to make service tax adjustments when there is a reduction or increase

in the amount of service tax being accounted; and

c) Any application for remission of penalties shall be made online through MySToDS and submitted together with the relevant

supporting documents.

International Tax Issues due to COVID-19 Travel Restrictions

7 | ANC TaxLetter | Issue 31

Description

Tax Residency for Year of Assessment (”YA”) 2020 & YA 2021

The COVID-19 pandemic has caused complications in determining the residence status of expatriate taxpayers in Malaysia. For

example, expatriates who attended meetings overseas were denied entry into Malaysia, due to the travel restriction imposed by

the Malaysian Government. Although the services rendered by the expatriate is related to its employment in Malaysia, as the

expatriate is physically outside of Malaysia, the one hundred and eighty-two (182) physical presence days in Malaysia became

questionable.

Fortunately, the IRBM provides relaxation to allow the period of temporary absence to be taken to form part of the taxpayer’s

period or periods in Malaysia for the purpose of determining tax residency. However, such period of temporary absence must be

supported by proper documentations and information. These documentations and information must be kept and submitted to the

IRBM upon request. Example of documents may include (but not restricted to) travel documents, local or foreign authority travel

restrictions guidelines and similar relevant documents which may prove that the taxpayer’s temporary absence or presence in

Malaysia was due to COVID-19 travel restrictions or documents which indicate that effort was taken by the taxpayer to return to

Malaysia during the Movement Control Order period.

The Movement Control Order period starts from 18 March 2020 as prescribed and extended by the Ministerial Order made

under Section 11 of the Prevention and Control of Infectious Diseases Act 1988 which is gazetted from time to time.

Application for the determination of the taxpayer’s resident status during the Movement Control Order period must be referred to

the IRBM’s branch that handles the taxpayer’s income tax file. Each application will be reviewed and assessed in accordance

with the merit of the case. Confirmation of taxability from foreign tax authorities may be requested if such need arises.

Stamp Duty Gazette Orders

8 | ANC TaxLetter | Issue 31Gazette Order

Description

P.U.(A)

53/2021

P.U.(A)

54/2021

Stamp Duty (Exemption) Order 2021

P.U.(A) 53/2021 exempts stamp duty from all instrument of transfer for the purchase of only one (1) unit of

residential property which is worth (market value) not more than five hundred thousand ringgit

(RM500,000) executed by a Malaysian citizen individual.

Stamp Duty (Exemption) (No. 2) Order 2021

Whereas P.U.(A) 54/2021 exempts stamp duty on any loan agreement to finance the purchase of one unit

of residential property which is worth (market value) not more than five hundred thousand ringgit

(RM500,000) executed between a Malaysian citizen individual named in the sale and purchase agreement

and a financial institutions under relevant Acts.

The qualifying conditions below shall be observed in order to enjoy the exemptions stated above:-

a) The sale and purchase agreement for the purchase of the residential property is executed on or after 1

January 2021 but not later than 31 December 2025; and

b) The individual has never owned any residential property including a residential property which is

obtained by way of inheritance or gift, which is held either individually or jointly.

The application for the exemption shall be accompanied by a statutory declaration under the Statutory

Declarations Act 1960.

P.U.(A)

73/2021

Stamp Duty (Exemption) (No. 3) Order 2021

The Minister exempts stamp duty on instruments in relation to an approved merger or acquisition by the

Ministry of Entrepreneur Development and Cooperatives, executed by small and medium enterprises. The

instruments are defined as:-

a) Contract or agreement for the sale or leasing of property (land, building, machinery and equipment);

b) Instrument of transfer and memorandum of understanding;

c) Loan or financing agreement; and

d) First leasing agreement.

The exemption shall apply to instrument executed on or after 1 July 2020 but not later than 31 December

2021.

Gazette Order

Description

P.U.(A)

95/2021

Income Tax (Exemption) (No. 2) Order 2021

A Malaysian resident qualifying person is exempted from paying income tax in the basis period of each YA in

relation to gains or profits derive, in lieu of interest, from Sukuk Prihatin.

Qualifying person means:

a) A Malaysian individual citizen who’s eighteen (18) years and above;

b) A body corporate incorporated under the laws of Malaysia but excluding a financial institution and a

holder of a Capital Markets Services Licence carrying on the business of fund management under the

Capital Markets and Services Act 2007 [Act 671]; or

c) A body of persons, partnership or limited liability partnership registered under any written law in Malaysia

and businesses that carry on in Malaysia but excluding a trustee registered as a member of Association

of Trust Companies Malaysia who acts on behalf of the person.

Effective YA 2020.

This taxletter offers non-binding information and is intended for general information purposes only. It is not intended as legal, tax or business administration advice and cannot be relied upon as individual advice. When compiling thistaxletter and the information included herein, ANC Hub Tax Advisory Sdn Bhd (“ANC Group”) used every endeavour to observe due diligence as best as possible, nevertheless, ANC Group cannot be held liable for the correctness, up-to-date content or completeness of the presented information.

The information included herein does not relate to any specific case of an individual or a legal entity, therefore, it is advised that professional advice on individual cases is always sought. ANC Group assumes no responsibility fordecisions made by the reader based on this leaflet. Should you have further questions please contact ANC Group contact persons.

Song LiewManaging Partnerinquiry@ancgroup.biz

Wang Choo JadAssociate Partnerinquiry@ancgroup.biz

Income TaxGazette Orders

9 | ANC TaxLetter | Issue 31

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