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Tax Espresso – December 2019
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Tax Espresso New Public Rulings and IRBM Operational Guidelines
December 2019
Tax Espresso – December 2019
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Greetings from Deloitte Malaysia Tax Services
Quick links: Deloitte Malaysia
Inland Revenue Board of Malaysia
Takeaways:
1. PR 9/2019 - Residence Status of Companies and Bodies of Persons
2. PR 8/2019 - Notification of Change of Accounting Period by a Company, Limited Liability
Partnership, Trust Body or Co-operative Society
3. PR 7/2019 - Taxation of Foreign Fund Management Company
4. PR 6/2019 - Tax Treatment on Expenditure for Repairs and Renewals of Assets
5. PR 5/2019 - Perquisites from Employment
6. Operational Guidelines No. 4/2019: Guidelines on Procedures for Submission of Amended
Return Form
7. Operational Guidelines No. 2/2019: Application for Tax Clearance Letter for Company, LLP and Labuan Entity
Upcoming events: 1. 2019 Employer’s Income Tax Reporting Seminar
Important deadlines:
Task
Due Date
31 December
2019
1 January
2020
1. 2021 tax estimates for companies with January year-end √
2. 6th month revision of tax estimates for companies with
June year-end √
3. 9th month revision of tax estimates for companies with
March year-end √
4. Statutory filing of 2019 tax returns for companies with May
year-end √
5. Maintenance of transfer pricing documentation for
companies with May year-end √
6. Due date for 2019 CbCR notification for companies with
December year-end √
Tax Espresso – December 2019
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PR 9/2019 – Residence Status of Companies and Bodies of Persons
The Inland Revenue Board of Malaysia (IRBM) has issued Public Ruling (PR) 9/2019 on 6
December 2019 to explain the determination of residence status of companies and bodies of
persons. The PR replaces the old PR 5/2011 dated 16 May 2011. The significant changes noted
are:
1. In item ‘Derivation of Dividends’ in Paragraph 4.3 of the PR, the remark that franked
dividends derived from Malaysia are still subject to Malaysian tax, has been removed.
2. On the ‘Residence status of a subsidiary or a branch of a foreign company in Malaysia’
(Paragraph 5.4), it has been added that Malaysian branches of foreign corporations controlled and managed by their overseas parent corporation would generally be treated as non-
residents in Malaysia. However, if a foreign corporation with a Malaysian branch claims that it
is a tax resident of Malaysia, it has to be proven to the satisfaction of the Director General of
Inland Revenue Malaysia (DGIR) that the management and control of its affairs, businesses or any one of the foreign corporation’s businesses is exercised in Malaysia.
A new Example 5 provides an example of a foreign corporation with a Malaysian branch which was a tax resident of Malaysia for the years of assessment (YAs) 2016 to 2018 as all
important policy decisions of the foreign company were made during the board of directors
meetings, where all the board of directors meetings were held in Malaysia. The management and control of the foreign corporation which involved important policy decisions was
exercised in Malaysia for the YAs 2016 to 2018.
3. New Paragraphs 5.5 and 5.6 were inserted to explain on the determination of the residence status of a limited liability partnership and a business trust.
Various examples have also been provided in the PR.
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PR 8/2019 - Notification of Change of Accounting Period by a Company, Limited
Liability Partnership, Trust Body or Co-operative Society The IRBM has issued PR 8/2019 on 6 December 2019 to explain the requirement to notify the
DGIR on any change of accounting period by a company, limited liability partnership, trust body
or co-operative society, which has to make payment by instalments on an estimate of tax payable for a year of assessment (YA). The PR replaces the old PR 7/2011 dated 23 August
2011.
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PR 7/2019 - Taxation of Foreign Fund Management Company
The IRBM has issued PR 7/2019 on 3 December 2019 to explain the tax treatment of income received by a foreign fund management company that provides fund management services to
foreign and local investors. This PR is not applicable to a foreign fund management company
that issues, offers or makes an invitation to subscribe or purchase units of conventional unit trust funds.
Tax Espresso – December 2019
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This PR replaces the old PR 6/2014 dated 4 September 2014. The list of updates and
amendments can be found on page 13 of the PR No. 7/2019.
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PR 6/2019 – Tax Treatment on Expenditure for Repairs and Renewals of Assets The IRBM has issued PR 6/2019 on 26 November 2019 to explain the tax treatment on
expenditure incurred for the repair and renewal of an asset. The PR No. 6/2019 covers the
following:
a) Expenses on repairs and renewals that are deductible under Subsection 33(1)(c) of the
Income Tax Act 1967 (the ITA)
b) Categories of repair expenses
(i) Repair to restore assets to their original condition
(ii) Initial repairs
c) Replacement of entirety (entire asset) vs part of the entirety
d) Replacement vs improvement
e) Implements, utensils or articles with a life span of less than two years
f) A summary of the expenditure on repairs and renewals of assets that are capital vs revenue
in nature.
Various examples have also been included in the PR.
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PR 5/2019 - Perquisites from Employment The IRBM has issued PR 5/2019 ‘Perquisites from Employment’ (dated 19 November 2019) to
explain the tax treatment on perquisites from an employment received in respect of having or
exercising an employment in Malaysia. The PR 5/2019 replaces the old PR 2/2013 ‘Perquisites
from Employment’ (dated 28 February 2013).
The main changes in PR 5/2019 are:
1. Paragraph 7.1.1 which relates to the maximum amount or value of tax exemption for
perquisites received by an employee in respect of his long service, past achievement, service
excellence, innovation or productivity award, has been updated to RM2,000 (previously RM1,000). This tax treatment is effective from YA 2008 onwards due to the amendment
made to Paragraph 25C of Schedule 6 of the ITA by the Finance Act 2009.
2. An additional paragraph was added to Example 4 to explain that an employee who was awarded a watch (valued at RM5,000) for his long service, will be taxed RM3,000 as a
Tax Espresso – December 2019
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perquisite for YA 2018 award because he is eligible for an exemption of RM2,000 under
Paragraph 25C of Schedule 6 of the ITA.
3. A new Paragraph 6.17 is inserted to explain that a payment in lieu of notice (PILON) or a
buy-out payment made by a new employer (either the employer made payment to reimburse
the amount paid by the new staff for not completing the notice period or payment made directly by a new employer to the previous employer of the new staff) is considered a
perquisite to the employee/staff and is taxed as gross income from employment under
Section 13(1)(a) of the ITA. Furthermore, Example 10 provides that the new employer must
make Monthly Tax Deduction as PILON which is borne by the new employer is part of the employee’s income.
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Operational Guidelines No. 4/2019: Guidelines on Procedures for Submission of
Amended Return Form
The IRBM has issued the Operational Guidelines No. 4/2019 on Procedures for Submission of
Amended Return Form (GPHDN 4/2019) dated 30 August 2019 on its website. The GPHDN 4//2019 replace the Operational Guidelines No. 3/2019 (GPHDN 3/2019) dated 22 April 2019.
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Operational Guidelines No. 2/2019: Application for Tax Clearance Letter for Company, LLP and Labuan Entity
The IRBM has released the Operational Guidelines No. 2/2019: Application for Tax Clearance Letter for Company, Limited Liability Partnership (LLP) and Labuan Entity (*), dated 12
November 2019. It supersedes the Operational Guidelines No. 3/2016.
The Operational Guidelines No. 2/2019 provide an explanation on the conditions and procedures,
as well as the required documents in relation to the tax clearance application for Company, LLP
and Labuan Entity. It also explained the additional documents that are required for application to close the tax file.
*Available in Bahasa Malaysia version only.
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We invite you to explore other tax-related information at:
http://www2.deloitte.com/my/en/services/tax.html
Tax Espresso – December 2019
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Tax Team - Contact us
Service lines / Names Designation Email Telephone
Business Tax Compliance & Advisory Sim Kwang Gek Tan Hooi Beng
Stefanie Low Thin Siew Chi Choy Mei Won Suzanna Kavita
Managing Director
Deputy Managing
Director
Executive Director
Executive Director
Director
Director
+603 7610 8849
+603 7610 8843
+603 7610 8891
+603 7610 8878
+603 7610 8842
+603 7610 8437
Business Process Solutions
Julie Tan Shareena Martin
Executive Director
Director
+603 7610 8847
+603 7610 8925
Capital Allowances Study Chia Swee How Sumaisarah Abdul Sukor
Executive Director
Associate Director
+603 7610 7371
+603 7610 8331
Global Employer Services Ang Weina Chee Ying Cheng
Michelle Lai Cynthia Wong
Executive Director
Executive Director
Director
Director
+603 7610 8841
+603 7610 8827
+603 7610 8846
+603 7610 8091
Government Grants & Incentives Tham Lih Jiun Thin Siew Chi Peggy Wong
Executive Director Executive Director
Director
+603 7610 8875
+603 7610 8878
+603 7610 8529
Tax Espresso – December 2019
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Indirect Tax Tan Eng Yew
Senthuran Elalingam Chandran TS Ramasamy Larry James Sta Maria Wong Poh Geng
Executive Director
Executive Director
Director
Director
Director
+603 7610 8870
+603 7610 8879
+603 7610 8873
+603 7610 8636
+603 7610 8834
International Tax & Value Chain Alignment
Tan Hooi Beng
Deputy Managing Director
+603 7610 8843
Mergers & Acquisitions Sim Kwang Gek
Managing Director
+603 7610 8849
Private Wealth Services Chee Pei Pei
Chan Ee Lin
Executive Director
Director
+603 7610 8862
+604 218 9888
Tax Audit & Investigation
Chow Kuo Seng Stefanie Low Anston Cheah Kei Ooi
Wong Yu Sann
Executive Director
Executive Director
Director
Director
Director
+603 7610 8836
+603 7610 8891
+603 7610 8923
+603 7610 8395
+603 7610 8176
Transfer Pricing Theresa Goh Subhabrata Dasgupta Philip Yeoh Gagan Deep Nagpal Justine Fan
Executive Director
Executive Director
Executive Director
Director
Director
+603 7610 8837
+603 7610 8376
+603 7610 7375
+603 7610 8876
+603 7610 8182
Tax Espresso – December 2019
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Vrushang Sheth Anil Kumar Gupta
Director
Director
+603 7610 8534
+603 7610 8224
Sectors / Names Designation Email Telephone
Automotive
Stefanie Low
Executive Director
+603 7610 8891
Consumer Products
Sim Kwang Gek
Managing Director
+603 7610 8849
Financial Services
Chee Pei Pei Mark Chan Mohd Fariz Mohd Faruk
Executive Director
Executive Director
Director
+603 7610 8862
+603 7610 8966
+603 7610 8153
Oil & Gas Toh Hong Peir Kelvin Kok
Executive Director
Director
+603 7610 8808
+603 7610 8157
Real Estate Chia Swee How Tham Lih Jiun
Gan Sin Reei
Executive Director Executive Director
Director
+603 7610 7371
+603 7610 8875
+603 7610 8166
Telecommunications
Thin Siew Chi
Executive Director
+603 7610 8878
Tax Espresso – December 2019
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Other Specialist Groups / Names
Designation Email Telephone
Chinese Services Group Tham Lih Jiun
Executive Director
+603 7610 8875
Japanese Services Group Mark Chan
Executive Director
+603 7610 8966
Korean Services Group Chee Pei Pei Lily Park Sung Eun
Executive Director
Associate Director
+603 7610 8862
+603 7610 8595
Branches / Names Designation Email Telephone
Penang Ng Lan Kheng Au Yeong Pui Nee
Monica Liew Tan Wei Chuan
Executive Director
Director
Director
Director
+604 218 9268
+604 218 9888
+604 218 9888
+604 218 9888
Ipoh
Mark Chan
Lam Weng Keat Patricia Lau
Executive Director
Director
Director
+603 7610 8966
+605 253 4828
+605 254 0288
Melaka Julie Tan Gabriel Kua
Executive Director
Director
+603 7610 8847
+606 281 1077
Tax Espresso – December 2019
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Johor Bahru Chee Pei Pei
Thean Szu Ping
Executive Director
Director
+603 7610 8862
+607 222 5988
Kuching Tham Lih Jiun Philip Lim Su Sing Chai Suk Phin
Executive Director
Director
Director
+603 7610 8875
+608 246 3311
+608 246 3311
Kota Kinabalu Chia Swee How Leong Sing Yee
Executive Director
Assistant Manager
+603 7610 7371
+608 823 9601
Sim Kwang Gek Tan Hooi Beng Stefanie Low Thin Siew Chi Julie Tan
Chia Swee How Ang Weina Chee Ying Cheng Tham Lih Jiun Tan Eng Yew
Senthuran Elalingam
Chee Pei Pei Mark Chan Chow Kuo Seng
Theresa Goh
Tax Espresso – December 2019
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Subhabrata Dasgupta
Philip Yeoh Toh Hong Peir Ng Lan Kheng Choy Mei Won
Suzanna Kavita Shareena Martin Michelle Lai Cynthia Wong Peggy Wong
Chandran TS Ramasamy
Larry James Sta Maria
Wong Poh Geng Chan Ee Lin Anston Cheah
Kei Ooi Wong Yu Sann Gagan Deep
Nagpal Justine Fan Vrushang Sheth
Anil Kumar Gupta
Mohd Fariz Mohd Faruk
Kelvin Kok Gan Sin Reei Au Yeong Pui Nee
Monica Liew Tan Wei Chuan Lam Weng Keat Patricia Lau Gabriel Kua
Tax Espresso – December 2019
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Thean Szu Ping Philip Lim Su Sing
Chai Suk Phin Sumaisarah Abdul Sukor
Lily Park Sung Eun
Leong Sing Yee
Tax Espresso – December 2019
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Tax Espresso – December 2019
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