Royal Malaysian Customs Department publishes guide on transmission and distribution of electricity services and guide on information technology services

Royal Malaysian Customs Department publishes guide on transmission and distribution of electricity services

The Royal Malaysian Customs Department published the guide on transmission and distribution of electricity services on 1 July 2020. The guide seeks to assist taxpayers in understanding the service tax treatment on the provision of electricity services.

The guide illustrates the following:

• terminology

• scope of tax

• service tax treatment on the provision of electricity services

• treatment of service tax on electricity services in designated area and special area

• frequently asked questions

• inquiry contact

Royal Malaysian Customs Department publishes guide on information technology services

The Royal Malaysian Customs Department published the guide on information technology services on 1 July 2020. The guide seeks to assist taxpayers in understanding the service tax treatment on information technology services. The service tax is a consumption tax governed by the Service Tax Act 2018 and its subsidiary legislation.

The guide illustrates the following:

• imposition and scope of tax

• terminology

• general operations of the industry and overview of information technology services

• charging service tax

• service tax treatment on information technology services

• exemption from payment of service tax (business-to-business exemption)

• treatment on imported taxable services

• responsibility of a registered person

• frequently asked questions

• inquiry contact

Source: Royal Malaysian Customs Department website, 1 July 2020

PM unveils short-term recovery plan, 09 June 2020

PM unveils short-term recovery plan, 09 June 2020

Prime Minister Tan Sri Muhyiddin Yassin on 5 June 2020 announced a series of measures for the Short-Term Economic Recovery Plan aimed at alleviating the effects of the COVID-19 pandemic. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz stated that the plan would focus on three key objectives, namely empowering people, propelling businesses and stimulating the economy.

The Short-Term Economic Recovery Plan is the fourth of the six-phase 6R approach, which are Resolve, Resilience, Restart, Recovery, Revitalise and Reform.

The highlights of the Prime Minister’s speech are illustrated below:

• The Statistics Department recorded that until 2 June 2020, around 12.7m of the workforce have started working in comparison to only 10.2m on 17 May 2020.

• RM9b has been allocated by the Government to address rising unemployment and it is to benefit over 3m workers nationwide.

• Wage Subsidy Programme which has allocated RM600 per worker is to be extended for another three months.

• Employers who were not allowed to operate during the conditional movement control order (MCO) are allowed to apply for the Wage Subsidy Programme.

• The Pelan Jana Semula Ekonomi Negara, which is a direct fiscal injection, seeks to empower people, propel businesses and stimulate the economy.

• The government packages have so far saved 2.4m jobs, has reduced the cash flow burden of around 10m people and supported more than 300,000 companies.

• Employment subsidy programme worth RM1.5b introduced. Companies to get financial subsidies for giving jobs to the unemployed.

• There are two incentives given to companies for six months, whereby companies that employ unemployed Malaysians under 40 years are eligible to get RM800 per worker and firms that employ Malaysians over 40 years and persons with disabilities (OKU) will get RM1,000.

• The Government plans to introduce My30 unlimited pass for public transport users. It is open to all nationalities, beginning 15 June until the end of 2020.

• Grants are to be given to daycare (taska) operators for implementing and adhering to the standard operating procedures set by the Government.

• E-vouchers will be available for online child-minders’ services.

• Incentives of RM3,000 have been allocated for individual income tax for fees paid by parents to taska and tadika (kindergartens).

• To encourage trade via e-commerce platforms using promo codes and discount vouchers, the Government is allocating RM70m in Campaign Shop Malaysia Online.

• Banking sector allocated RM2b to assist SMEs with a threshold of RM500,000 per SME.

• RM1b allocated for the tourism industry under Penjana Tourism Funding to ensure that the country’s tourism industry can still be competitive.

• G2 and G3 contractors who have been awarded minor government projects are provided cash-flow aid by SME bank.

• Malaysian Global Innovation and Creativity Centre (MaGIC) have been allocated RM10m to fund social enterprises for social projects for vulnerable groups.

• Penjana Nasional fund worth RM600m introduced to drive the process of digitalisation of businesses and innovation.

• RM75m has been allocated to draft policies related to the so-called gig economy.

• The Government allocated RM50m matching grant for gig economy workers’ Employees Provident Fund and Social Security Organisation contribution.

• The Government allocated RM75m to e-wallets, or RM50 per person, where Malaysians can begin applying in July 2020 to encourage cashless payments.

• The Government has provided 100% tax exemption for the purchase of locally assembled cars beginning June until 31 December 2020.

• An additional RM50m has been provided to the Malaysian Investment Development Authority for promotional and marketing activities.

• RM1b allotted for the tourism industry to help related SMEs to operate.

• RM400m microcredit has been provided by Tekun and Bank Simpanan Nasional with RM50m specifically for female entrepreneurs.

• Full exemption of tourism tax from 1 July 2020, until 30 June 2021.

• The exemption provided of services tax on lodgings and accommodation services extended from 1 September 2020 until 30 June 2021.

• Companies’ financial burden has been reduced through the waiver of penalty to companies that are late in submitting payment for Sales and Service Tax as well as an extension of tax exemptions.

Source: The Star, 5 June 2020

STANDARD OPERATING PROCEDURES (SOPs) FOR VISITORS TO PASSIT PMC OFFICE

STANDARD OPERATING PROCEDURES (SOPs) FOR VISITORS TO PASSIT PMC OFFICE

Prime Minister Tan Sri Muhyiddin Yassin announced today that the Conditional Movement Control Order (CMCO) which was originally scheduled to end on 12 May 2020 has been further extended until 9 June 2020.

Passit PMC will continue with its plan to resume office on 11 May 2020. To support the Government’s efforts to control and contain the spread of COVID-19 while adhering to its call to minimise the movement of people, and taking into consideration of the safety of our staff, Passit strongly encourages its clients and other stakeholders to liaise with the us online unless absolutely essential to visit its office premises.

Guidelines and SOPs for Visitors to Offices

Passit’s office will resume to attend to matters that cannot be dealt with online as part of our ongoing support to clients and other stakeholders.

To ensure the safety of our visitors, Passit will implement SOPs as set by the Government as follows:

  • Visitors are required to make an appointment prior to coming to Passit’s office in order to limit the number of people present in the office.
  • Visitors are required to complete the health declaration form before entering the office.
  • Physical appointments and meetings shall comply with all social distancing and sanitisation protocols. 
  • Temperature screening will be carried out for all visitors before they enter the office. If their temperature is high (37.5° C) or they present COVID-19-like symptoms (such as cough, sore throat or shortness of breath), Passit will advise them to go to the nearest clinic. They will not be allowed to enter the office.
  • To observe strict personal hygiene practices including wearing masks, practising social distancing and sanitisation.

Thank you and stay safe.

Standard Operating Procedure (SOP) for Conditional MCO

You may download the SOP of different industries below if you wish to re-start your business operations.

Lampiran: 

 00 – PENGENALAN SOP PEMBUKAAN SEMULA EKONOMI.pdf

 01 – SOP SEKTOR SUKAN DAN REKREASI – KEMENTERIAN BELIA & SUKAN.pdf

 02 – SOP SEKTOR PENGANGKUTAN – KEMENTERIAN PENGANGKUTAN.pdf

 03 – SOP SEKTOR MAKANAN – KEMENTERIAN WILAYAH PERSEKUTUAN.pdf

 04A – SOP SEKTOR PERKHIDMATAN IKHTISAS & PROFESIONAL – KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI.pdf

 04B – SOP SEKTOR PEMBUATAN – KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI.pdf

 05 – SOP SEKTOR SOSIAL – KEMENTERIAN PERPADUAN.pdf

 06 – SOP SEKTOR MINYAK & GAS – PETRONAS.pdf

 07 – SOP SEKTOR PERKHIDMATAN & PELBAGAI – KEMENTERIAN SUMBER MANUSIA.pdf

 08 – SOP SEKTOR PERUNCITAN – KEMENTERIAN PERDAGANGAN DALAM NEGERI DAN HAL EHWAL PENGGUNA.pdf

 09 – SOP AR-RAHNU & KOPERASI KREDIT – KEMENTERIAN PEMBANGUNAN USAHAWAN DAN KOPERASI.pdf

 10 – SOP SEKTOR AGRIKOMODITI – KEMENTERIAN PERUSAHAAN PERLADANGAN DAN KOMODITI -.pdf

 11 – SOP SEKTOR KEWANGAN – KEMENTERIAN KEWANGAN.pdf

 12 – SOP SEKTOR INDUSTRI PERTAHANAN – KEMENTERIAN PERTAHANAN.pdf

 13 – SOP SEKTOR TENAGA, PERHUTANAN & MINERAL – KEMENTERIAN TENAGA DAN SUMBER ASLI.pdf

 14 – SOP SEKTOR PENDIDIKAN – KEMENTERIAN PENDIDIKAN MALAYSIA.pdf

 15 – SOP SEKTOR PERTANIAN & MAKANAN – KEMENTERIAN PERTANIAN DAN INDUSTRI MAKANAN.pdf

 16 – SOP SEKTOR KOMUNIKASI & TEKNOLOGI MAKLUMAT – KEMENTERIAN KOMUNIKASI & MULTIMEDIA.pdf

 17 – SOP SEKTOR PELANCONGAN, SENI & BUDAYA – KEMENTERIAN PELANCONGAN, SENI & BUDAYA.pdf

 18 – SOP SEKTOR ALAM SEKITAR – KEMENTERIAN ALAM SEKITAR.pdf

 19 – SOP SEKTOR PEMBINAAN – KEMENTERIAN KERJA RAYA.pdf

 20 – SOP SEKTOR GUAMAN – BAHAGIAN HAL EHWAL UNDANG-UNDANG.pdf

 21 – SOP SEKTOR KAWALAN KESELAMATAN SWASTA – KEMENTERIAN DALAM NEGERI.pdf

 22 – SOP SEKTOR KEBERSIHAN, KESELAMATAN, PEMBINAAN, PENGURUSAN STRATA, KEWANGAN – KEMENTERIAN PERUMAHAN DAN KERAJAAN TEMPATAN.pdf

 23 – SOP SEKTOR PERUBATAN – KEMENTERIAN KESIHATAN MALAYSIA.pdf

 24 – SOP SEKTOR R&D DAN MAKMAL UJIAN – KEMENTERIAN SAINS, TEKNOLOGI DAN INOVASI.pdf

 25 – SENARAI AKTIVITI YANG DILARANG.pdf

Announcement — Penalty in MySST system for late payment of taxes on Taxable Period included in the Movement Control order (MCO) period

Announcement — Penalty in MySST system for late payment of taxes on Taxable Period included in the Movement Control order (MCO) period

  • Due to inevitable time and system constraints during the MCO, penalties on Taxable periods which are included in the MCO period will still be generated in the MySST as usual. However JKDM will remit the penalties as soon as possible.
  • Actual Due Date of the taxable period and the date of penalty generated are as follows:
No.Taxable periodDue Date to submit
return and payment
Date of penalty
generated
1.Jan-Feb 202031/3/20201/4/2020
2.Feb-Mar 202030/4/20201/5/2020
  • Any Bill of Demand (BOD) on penalties elligable for remission during the Movement Control Order (MCO) the will be remitted by JKDM as soon as possible.
    Application for remission of these penalty is not required.

Allow SMEs to defer paying income tax till December 2020

Allow SMEs to defer paying income tax till December 2020

Accountants urged the Government to permit small- and medium-sized enterprises (SMEs) to defer income tax instalment payments up to December 2020 instead of a three-month period ending in June 2020.

The Malaysian Institute of Certified Public Accountants and Malaysian Rating Corporation Bhd said that several SMEs were facing bankruptcy as their cash flow and revenue ran out with overhead expenses accumulated with the movement control order. The Government could consider extending the deferment until December 2020 as the impact of supply chain disruptions would be felt even after the COVID-19 outbreak ends.

The Government permits all SMEs to postpone income tax instalment payments for a three-month period commencing 1 April 2020 under the Prihatin Rakyat Economic Stimulus Package. This measure is in addition to the tax instalment payment postponement provided to impacted businesses in the tourism sector for six months, also beginning from 1 April 2020.

The accountants said that it is essential for financial institutions, namely commercial banks and development financial institutions, to step forward at this critical moment in Malaysia’s economic history. It is necessary that they continue to introduce funds into the economy and support economic activities by lending to viable businesses.

Otherwise, Malaysia could end up with thousands of business failures which would have dire implications on the financial system, economy and labour market. The two organisations said that the surge in business failures could also trigger large-scale social problems.

Source: Free Malaysia Today

COVID-19: Advice for Employers

What should employers do for the salaries, wages and related costs during Movement Control Order (MCO)?

With the implementation of the Order from 18 March 2020, employers are now facing a problem, i.e. continue to pay employees’ salaries while work cannot be performed due to MCO. What should employers do?

Current status

1) Employers are required to pay salary and related allowances during MCO, except for transportation allowance and attendance allowance. Employers cannot force their employees take annual leave or unpaid leave.

If an employer decides to retrench, temporarily lay-off or reduce salary, the employer must report to the Ministry of Labour via Borang PK.

3) For employees with a monthly salary less than RM4,000 and contribute to EIS, employers can submit applications with Perkeso since 20 March 2020 and get 6 months financial assistance (RM600 per month) if their employees go for unpaid leave. (Submission of Borang PK is necessary).

Recommendations

1) As it is rather difficult to predict the end of MCO, employers are advised to submit Borang PK to the Labour Department in order to obtain the rights to retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction of employees.

2) Employers may announce the available options to their employees as below: –

  • Adjust working hours based on workload at home and the salary accordingly (e.g. 2 working hour per day, and the remaining 6 hours are treated as unpaid leave);
  • Working hours remain at 8 hours per day and implement temporary pay-cut (e.g. reduce 20%);
  • Unpaid leave for those who are unable to work from home;
  • Voluntary Separation Scheme (VSS).

Please seek professional advice from HR professionals or the Labour Department before implementation of your plan.

Useful links

👉Download Borang PK – http://jtksm.mohr.gov.my/…/Pemberhentian_Peke…/borang_pk.pdf

👉Employment Retention Plan (ERP) – https://www.facebook.com/LANDCO.MALAYSIA/posts/891003541348043

👉Employment Insurance System (EIS): https://www.liew.my/social-zh/eis-zh/

👉Borang PK Guidance – http://jtksm.mohr.gov.my/images/pdf/Borang/Pemberhentian_Pekerja/garis_panduan_pemberhentian_pekerja.pdf

Movement Control Order

Following the Malaysia Government’s announcement of the nationwide movement control order from 18th March to 14th April 2020 (and subsequent extension, if any), we would like to announce that Passit Group will implement limited work from home during this period and we will do our best to fulfill your company’s needs.

You may contact us through our respective phone lines and emails as usual during business hours from 9 am to 5 pm, Monday to Friday.

Please do not courier anything to our office as we are unable to receive them at this moment. If you have any inquiries, please contact us at passitmy@passitmy.com.

Stay safe & healthy!

Malaysia commits to international tax standards

Malaysia commits to international tax standards

Malaysia, in principal, has committed to implement and adhere to Base Erosion and Profit Shifting (BEPS) Action Plan. It has officially joined the OECD Inclusive Framework on BEPS as Associate Members. The framework emphasises on four minimum standards:

• Action 5 – Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance

• Action 6 – Preventing the Granting of Treaty Benefits in Inappropriate Circumstances

• Action 13 – Guidance on Transfer Pricing Documentation and Country-by-Country Reporting

• Action 14 – Making Dispute Resolution Mechanisms More Effective

In addition, the Forum on Harmful Tax Practices (FHTP) has identified certain Malaysian incentives for evaluation on the basis that it provide preferential regimes for mobile geographical services activities related to intellectual property and non-intellectual property. The incentives are as follows:

Intellectual property incentives

Non-intellectual property incentives

Principal Hub
Pioneer Status (High Technology)
Biotechnology Industry (BioNexus)
MSC Malaysia

Biotechnology Industry (BioNexus)
MSC Malaysia
Principal Hub
Pioneer Status (Contract R&D)
Treasury Management Centre
Economic Development Regions [Iskandar Malaysia (IM), East Coast Economic Region (ECER), Sabah Development Corridor (SDC)]
Approved Services Project
Green Technology Services
Labuan Leasing Services
Foreign Fund Management
Inward re-insurance and offshore insurance
Malaysian International Trading Company

The Ministry of Finance (MoF) has released timelines where the above mentioned tax incentives shall be amended to meet the FHTP criteria. The Ministry of Finance is working with the Inland Revenue Board and related ministries/agencies to review the incentives in order to meet the criteria set under the FHTP.

Kindly visit the MoF website for further information.

Source: MoF website, 12 June 2018