The Prime Minister announced the PERMAI Assistance Package valued at RM15 billion on 18 January 2021. A total of 22 initiatives will be implemented under the PERMAI Assistance Package, anchoring on three main objectives as follows –
Updates
Wednesday, 20 January 2021
Sunday, 8 November 2020
2021 Budget Highlights
The COVID-19 pandemic heralded a significant increase in spending on tackling the crisis, making the newly tabled 2021 Budget the biggest allocated budget in Malaysian history. It is expected to help the nation’s economy get back on track.
Click on the following image to download our latest publication, 2021 Budget Highlights, which gives you a snapshot of the tax proposals introduced in the Budget.
Monday, 19 October 2020
Tax Bulletin | UPDATES ON INDIRECT TAX: Sales Tax and Service Tax
We would like to inform that the Royal
Malaysian Customs Department (RMCD) has uploaded the following in the website,
MySST recently:-
Date of Publication |
Subject |
Salient Points |
|
13 August 2020 |
Service Tax Policy |
The RMCD has published the following service
tax policies:- |
|
1) Service Tax Policy No. 1/2020 (Amendment
No. 1) [click HERE] – Expansion of scope of taxable service. |
This is to highlight that the taxable
service under item (m), Group G, First Schedule of the Service Tax
Regulations 2018 (“STR”) namely provision of digital services including
transaction for provision of digital services on behalf of any person is
deleted and added into item (l) of the STR, as follows: New item (l) – provision of digital
services including provision of electronic medium that allows the suppliers
to provide supplies to customers or transaction for provision of digital
services on behalf of any person, excluding provision of such services in
relation to matters outside Malaysia. |
||
2) Service Tax Policy No. 3/2020 (Amendment
No. 1) [click HERE] – Claiming a refund by offsetting method
on service tax on imported digital service provided by foreign registered
person. |
This is to amend the technical term “Foreign
Service Provider (FSP)” with “Foreign Registered Person (FRP)” that used on
service acquired from a foreign vendor who is registered and charging service
tax to its customers in Malaysia. |
||
3) Service Tax Policy No. 4/2020 (Amendment
No. 1) [click HERE] – Service Tax on online distance
learning services. |
Service Tax Policies No. 4/2020 & 5/2020
– These services provided by both foreign and local service providers are
given the concession for the services to be excluded from service tax. |
||
4) Service Tax Policy No. 5/2020 (Amendment
No. 1) [click HERE] – Service Tax on online newspaper, online
journals and periodicals. |
|||
5) Service Tax Policy No. 8/2020 (Amendment
No. 1) [click HERE] – Group relief facility on provision of
taxable services to company within the same group of companies. |
This is amended to include digital service
under item (l), Group G, First Schedule of the STR as a service that is
eligible for intragroup relief. |
||
Specific and Industry Guides |
The RMCD has published the following
guides:- |
||
24 August 2020 |
1) GST Guide on Declaration and Adjustment
after 1 September 2018 dated 18 August 2020 [click HERE]. |
This Guide is to replace the GST Guide on
Declaration and Adjustment after 1st September 2018 dated on 8 May 2019. |
|
17 September 2020 |
2) Guide on Service Tax Treatment on Disbursement
and Reimbursement dated 15 September 2020 [click HERE]. |
To provide guidelines on how to apply
service tax rules between “Disbursement” and “Reimbursement”. |
|
17 September 2020 |
3) Guide on Service Tax Treatment on
Consultancy, Coaching and Training Services dated 15 September 2020
[available in Malay language only click HERE]. |
To provide guidelines on scope of
Consultancy, Coaching and Training Services that fall under taxable services. |
|
5 October 2020 |
4) Guide on Service Tax Treatment on
Management Services dated 1 October 2020 [available in Malay language only
click HERE]. |
To provide the scope of management services
that fall under taxable services: 1) Project management services, full or part
of the project. 2) Tourism management services – removed as
a taxable service from 1 September 2019. 3) Logistics management services – removed
as a taxable service from 1 September 2019 4) Maintenance management services 5) Warehousing management services – Further
explained in the Warehousing Guide below. 6) Collection and debt management services 7) Car park management services 8) Sports facilities management services 9) Secretarial management services 10) Any management services other than
specified above, made on behalf or another person. |
|
7 October 2020 |
5) Guide on Service Tax Treatment on
Warehousing Management Services dated 6 October 2020 [available in Malay language
only click HERE]. |
To provide guidelines on warehouse operator
and the scope of warehousing management services. This includes services such
as: 1) Handling 2) Loading and unloading 3) Sorting 4) Consolidation and de-consolidation 5) Labelling 6) Inventory control 7) Storage space 8) Pick and pack 9) Security control Note: Transportation of goods is excluded
from the scope of warehousing management services. |
|
7 October 2020 |
6) Guide on Service Tax Treatment on
Professional Services dated 6 October 2020 [click HERE]. |
To provide guides on digital services that
fall under Professional Services Group G, First Schedule of the STR. |
|
7 October 2020 |
General Guide |
General Guide on Service Tax dated 6 October
2020 [available in Malay language only click HERE]. |
This Guide is to replace the General Guide
on Service Tax dated on 7 September 2018. |
7 October 2020 |
Sales Tax |
Sales Tax (Person Exempted from Payment of
Tax) (Amendment) (No. 2) Order 2020 [click HERE] |
We will keep you updated on any further guidelines and announcements to be issued by the Royal Malaysian Customs Department or other relevant authorities, if any.
Tuesday, 11 August 2020
New Public Rulings No.1/2020, No.2/2020, No.3/2020 and No.4/2020
We would like to inform that the following Public Rulings (PRs) have been uploaded in the website of the LHDNM recently: -
Public
Rulings |
Title |
Date
of Publication |
Objective
& Salient Points |
No.
1/2020 [click
HERE] |
Tax
Incentives For Bionexus Status Companies |
22.05.2020 |
To
explain the tax treatment in respect of tax incentives for a BioNexus Status Company (BNX) in Malaysia.
It
is stated in this PR that a BioNexus
Status is a special status awarded to qualified biotechnology companies
undertaking value-added biotechnology or life sciences activities. A company
which has been awarded the BioNexus Status would be able to enjoy fiscal
incentives, funding assistance and other benefits to assist the growth of the
company. The
PR also explains the application process for BioNexus
status, the tax incentives available for a BNX and treatment of losses
incurred by a BNX.
Note:
This PR replaces PR No. 8/2018. |
No.
2/2020 [click
HERE]
No.
3/2020 [click
HERE] Note
: Both PRs are to
be read together |
Tax
Treatment Of Stock In Trade Part I - Valuation Of Stock
Tax
Treatment Of Stock In Trade Part II - Withdrawal Of Stock |
03.06.2020
03.06.2020 |
To
explain the valuation of stock in trade in relation to a business carried on
by a person in Malaysia.
The
PR states that for tax purposes, the value of the stock in trade is important
in determining the adjusted income of a business. The
PR explains the basis of valuation of stock in trade for tax purposes is that
the market value of an inventory (stock in trade) would be equal to the fair
value or estimated selling price. Net realizable value is not acceptable for
tax purposes. To
explain the tax treatment of withdrawal of stock in trade in ascertaining the
adjusted income in relation to a business for the basis period for a year of
assessment carried on by a person in Malaysia. The
PR states that the stock in trade withdrawn from a business for own use or
for use in a different business activity or reclassification from trading to
capital or vice versa due to a change of intention of the business, has to be
accounted for and valued to an amount equal to the market value of that stock
in trade. It
is also stated that the market value of stock in trade can be reduced under
certain circumstances. Reference can be made to the example provided in this
PR.
In
the event the stock in trade is parted with by compulsion, the PR states that
the gains or profits from a business shall include an amount receivable
arising from stock in trade parted with by element of compulsion (including
requisition or compulsory acquisition). The amount receivable will be treated
as gross income of the business in the year where the stock in trade was
compulsorily acquired.
Note:
The above PRs replace PR 4/2006. |
No.
4/2020 [click
HERE] |
Tax
Treatment Of Any Sum Received And A Debt Owing That Arises In Respect Of
Services To Be Rendered |
16.06.2020 |
To
explain where in the relevant period – (a)
any sum received by a person, notwithstanding that no debt is owing to the person;
and (b)
a debt is owing to a person that
arises in respect of services to be rendered is to be treated as gross income
of the person from a business for the relevant period. The
PR explains that the amendment to paragraph 24(1)(b) of the ITA provides that
where in a relevant period, a debt owing to the relevant person arises in
respect of services to be rendered in the relevant period or in any
following basis period, the amount of the debt is to be treated as gross
income of the relevant person from the business for the relevant period. Pursuant
to the subsection 24(1A) of the ITA, where in the relevant period, any sum is
received by a relevant person in the course of carrying on a business, in
respect of any services to be rendered in the relevant period or in any
following basis period, the sum is to be treated as gross income of the
relevant person from the business for the relevant period the sum is
received, notwithstanding that “no debt is owing to the relevant person
in respect of such services”. In other words, payment received in advance
will be brought to tax in the basis period the sum is received.
The
PR states that the application of paragraph 24(1)(b) would have to be
considered first before applying subsection 24(1A).
The
PR also provides examples of services that are not subject to the above
paragraph 24(1)(b) and subsection 24(1A) of the ITA. |
Updates On Indirect Tax: Goods and Services Tax & Service Tax
We would like to inform that the Royal Malaysian Customs Department (RMCD) has uploaded the following in the website, MySST recently:-
Subject |
Date
of Publication |
Objective
& Salient Points |
FAQ Pertaining to GST Refund [available in Malay
language only click HERE] |
16 June
2020 |
The RMCD has on 16
June 2020 published the FAQ Pertaining to GST refund [“the GST FAQ”]. The
salient points extracted from the GST FAQ are as follows:-
|
Notification of GST Refund [available in Malay
language only click HERE] |
16 June
2020 |
The RMCD has on 16
June 2020 published the Notification of GST Refund [“the Notification”]. For
the purpose of expediting the GST refund during/post MCO period, the RMCD
will be adopting “pay first, audit later” approach for selected companies as
summarised below:-
Companies that have
yet to receive the GST refund can access the TAP or contact the nearest RMCD
office to check on the status of the GST refundable and any information
requested by the RMCD.
|
Service Tax Policy No. 9/2020
(Amendment No. 1) [click HERE] |
17 June
2020 |
The RMCD has on 17
June 2020 published the Service Tax Policy No. 9/2020 (Amendment No. 1). The
amendment is made subsequent to the Short-Term Economic Recovery Plan
[“PENJANA”] announced by our Prime Minister on 5 June 2020. The amendments
are in relation to the following exemptions:- ·
the service tax exemption for hotel related services will
be extended from 31 August 2020 to 30 June 2021; and ·
the tourism tax will also be exempted from 1 July 2020 to
30 June 2021.
|
FAQ Pertaining to PENJANA [available in Malay
language only click HERE]
|
30 June
2020 |
The RMCD has on 30
June 2020 published the FAQ Pertaining to PENJANA [“the PENJANA FAQ”]. Please
refer to the PENJANA FAQ more information.
|
Specific and Industry Guides |
|
The RMCD has
published the following guides:- |
1 July
2020 |
|
|
13 July
2020 |
|
|
13 July
2020 |
|
|
29 July
2020 |
|
We will keep you updated on any further guidelines and announcements to be issued by the Royal Malaysian Customs Department or other relevant authorities, if any.