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PR states that the stock in trade withdrawn from a business for own use or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. |
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