Foreign firms’ online income to be taxed
The Treasury Secretary-General has reiterated that foreign companies operating vide online platforms are not exempt from tax in Malaysia if the income is generated here. He informed that the Treasury’s online business and commerce decision task force is working on a mechanism to collect taxes from companies using online platforms.
Directors charged for not declaring income tax, 14 February 2017
The Inland Revenue Board (IRB) has charged two directors for failing to declare their income tax returns.
A contractor is facing eight charges under s 77(1)(a) and 112(1) of the Income Tax Act 1967 for failing to declare his income and submitting the Form B for YAs 2006 to 2013.
In another case, a director is facing three charges under s 77(1)(a) and 112(1) of the Income Tax Act 1967 for failing to declare the company’s income and the Form C for YAs 2011, 2013 and 2014.
If convicted, the two individuals may face a penalty between RM200 to RM2,000 or imprisonment not exceeding six months or both for each charge. The IRB has requested for an arrest warrant and the court has set a mention date of 13 March 2017.
Source: IRB website, 13 February 2017
Recent update dd 10/01/2017
The highlights of the recent update include the following:
Vietnam
Taiwan
South Korea
Hong Kong
India
Malaysia Revenue Legislation, 10 January 2017
We are pleased to inform you that the following has been updated/inserted in CCH’s Malaysia Revenue Legislation and is available on IntelliConnect®:
Provident Fund
The Employees Provident Fund Act 1991 has been amended by the Employees Provident Fund (Amendment) Act 2016 as follows:
– Amendment to s 50, 51A, 70C and 70E, and
– Insertion of new s 55B.
The amendments come into operation on 1 January 2017.
The Rules insert a new r 41A to the Employees Provident Fund Rules 1991. The Rules come into operation on 1 January 2017.
The Order amends s 54(6) of the Employees Provident Fund Act 1991. The Order comes into operation on 1 January 2017.
IRB issues public rulings on tax borne by employers and income from employment on board a ship, 16 December 2016
The Inland Revenue Board (IRB) has published the following public rulings (PRs):
• Tax Borne by Employers (Second Edition) (PR No 11/2016) dated 8 December 2016.
• Taxation of Income from Employment on Board a Ship (PR No 12/2016) dated 9 December 2016.
Tax Borne by Employers (Second Edition) (PR No 11/2016)
This PR rearranged, rewrote and updated the contents of PR No 2/2006. This PR replaces PR No 2/2016 dated 17 January 2006.
Taxation of Income from Employment on Board a Ship (PR No 12/2016)
The PR explains the tax treatment of income of an individual derived from an employment exercised on board a ship. The PR covers, among others, derivation of income, tax treatment, double taxation agreement provision, documents required for verification and responsibility of employer and seafarer.
The penalty imposed by the Director General of Inland Revenue was 20% of the tax assessed for the year. The 20% penalty should not be based on the difference between the tax payable and the tax already paid because that was not what s 112(3) of the Income Tax Act 1967, whether expressly or impliedly provides. Yung Lung Holdings Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (2016). KCH-14-2/12-2015. High Court, Kuching. Dato’ Rhodzariah binti Bujang J. 4 May 2016.
The Royal Malaysian Customs Department (RMCD) has revised the following guide in its portal:
Industry Guides
• Insurance and Takaful
The Guide on Insurance and Takaful revised as at 22 October 2014 is withdrawn and replaced by the Guide on Insurance and Takaful revised as at 19 August 2016.
The abovementioned Order states that any tax payable under the Income Tax Act 1967 and stamp duty payable shall be remitted in full by the Employees Provident Fund Board and the Perbadanan Tabung Pendidikan Tinggi Nasional and any party to whom the agreement is transferred or assigned, in relation to the Murabahah Term Financing Facility Agreement of RM2,200m and the guarantee provided by the Malaysian Government.
The abovementioned Order came into operation on 22 August 2016.
| The Malaysian Accounting Standards Board (MASB) has today issued Clarifications to MFRS 15 Revenue from Contracts with Customers (the Amendments). The Amendments is word-for-word Clarifications to IFRS 15 as issued by the International Accounting Standards Board (IASB). The Amendments is effective for annual periods beginning on or after 1 January 2018 and early application is permitted.
The Amendments clarifies how certain principles should be applied in: a) identifying whether performance obligations are distinct; b) determining whether an entity is a principal or an agent; and c) assessing whether revenue from a licence of intellectual property is recognised over time or at a point in time.
|
|
ROYAL MALAYSIAN CUSTOMS DEPARTMENT UPDATED GST GUIDES ON TRANSITIONAL RULES, EXPORT AND GAMING
The Royal Malaysian Customs Department has recently uploaded the updated GST Guides as follows:
GST Specific Guide on Transitional Rules (as at 3 August 2016).
Paragraph 55 (definition of reviewable contract) and Paragraph 56 (meaning of reviewable opportunity) together with the corresponding Example 13 of the guide as at 19 March 2015 were removed.
GST Industry Guide on Export (as at 12 August 2016).
Paragraph 9 was inserted to include additional conditions for the claim of input tax relating to exported goods. Please take note of the new requirement to endorse a statement – “A claim for input tax under the GST Act 2014 will be made”, in the Sistem Maklumat Kastam (SMK) in respect of the export.
Answer (A8) to Frequently Asked Question No. 8 (Q8) was also amended in line with the above requirement, by including two more export documents i.e. the Export Declaration (Form K2/K8) with endorsement on Remarks column in SMK and the Customs Official Receipt (COR), that must be kept for a period of 7 years.
GST Industry Guide on Gaming (as at 12 August 2016).
The amendment was made to the Answer (A6) to Frequently Asked Question No. 6 (Q6) by substituting the words “gaming operator” with the words “casino operator”.