eKTP 120

4 Types of Industry Are No Longer Prescribed As Services Start From Now

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These 4 services are:
- Logistics Management Services
- Tourism Management Services
- Amusement Park Services &
- Cleaning Services operated via Coin Operated Laundry Machine (COLM)

However, any services tax collected from customers beginning from 01/01/2019 must be remitted to the Royal Malaysian Customs Department (RMCD). Any person who has paid service tax, no refund is allowed.

Extract from the Royal Malaysian Customs Department (RMCD) example of 4 types of services is appended as below:

https://mysst.customs.gov.my/assets/document/Annoucement/ServiceTaxPolicy_12019.pdf

 

eKTP 119

IRB Only Accept Online Submissions for CP39 Start From 01.09.2019

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Beginning Sept 1, the Inland Revenue Board of Malaysia (IRBM) will no longer accept manually submitted form CP39 (Statement of Monthly Tax Deduction), Compact Disk (CD/DVD), Flash Drive and Diskette as well as cash and cheque payments of the Monthly Tax Deduction (MTD) from employers.

This is in line with the government’s effort to increase the usage of online payment, the government agency said in a statement today.

“Employers may only use the e-PCB, e-Data PCB or e-CP39 methods provided through the ezhasil sub-menu on IRBM’s official portal www.hasil.gov.my for submission of the statement of Monthly Tax Deduction or employees MTD data for the month of August 2019 and for subsequent months,” it said.

As for the MTD payment, IRBM said employers are required to do this for their employees using online payment (e-payment) methods such as Financial Process Exchange (FPX), internet banking, internet GIRO transfer or via cheque deposit at CIMB Bank.

IRBM said employers are advised to adhere to this new provision to ensure that the submission of employees’ personal data and MTD payment can be made within the stipulated time to avoid compound on late remittance.

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eKTP 118

Automated Compound Reduction Scheme by Companies Commission of Malaysia (SSM)
Part 2 of 2

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Illustration of the Automated Compound Reduction Scheme

SSM issued a compound letter dated 1 August 2019 to Mr. Ang, Director of Ang Sdn Bhd for failure to lodge Company’s Annual Return (AR) under Section 68 (1) of Companies Act 2016 with a fine amounting to RM50,000.00.

Mr. Ang prepared an appeal letter (intend to appeal for a reduction on the amount of fine) and brought along the compound letter to SSM Johor Bahru Branch office. When he reached SSM branch office, the officer notified him there was an automated reduction scheme offer to defaulter without any appeal. The amount of fine under such a scheme works out as below:

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The SSM officer urged Mr. Ang to pay the fine either in cash, cheque (exclude personal cheque), bank draft, credit card, postal order or money order make payable to “Suruhanjaya Syarikat Malaysia” and receipt will be issued upon payment.

 

eKTP 117

Automated Compound Reduction Scheme by Companies Commission of Malaysia (SSM)
Part 1 of 2

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Starting from 1 July 2019, SSM will implement an automated compound reduction scheme as a measure to facilitate the settlement of compound within the period of time.

This approach is to encourage the company under Companies Act 1965 and Companies Act 2016 to take this advantage to enjoy the higher compound reduction rate without having to submit any appeal letter.

The rate of compound reduction will be automated according the following table:

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This offer is subject to Section 38A(1) of the Companies Commission of Malaysia Act 2001. No appeals will be entertained when there is legal action taken toward the company.

This reduction scheme also EXCLUDE any compound which:

  • settlement out of court or investigation conducted by “

  • expired and re-issued for payment; and

  • successful reduced amount through appealing process.

SSM urge the companies and directors to take this opportunity to make payment through counter at any of the SSM State Offices throughout Malaysia.

Please refer to the following link for further details:
http://www.ssm.com.my/Lists/Press%20Release/DispForm.aspx?ID=142&Source=http%3A%2F%2Fwww%2Essm%2Ecom%2Emy%2FPages%2FPublication%2FPress%5FRelease%2FPress%2DRelease%2Easpx&ContentTypeId=0x010098952881AC48D34C9D9967E0232CDB0B

 

eKTP 116

Important Changes On Form e-C For YA 2019

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The IRB recently made available the company income tax return form (Form e-C) for YA 2019 on its website. Significant additional information may need to be disclosed in the worksheets (“Helaian Kerja”) to the YA 2019 Form e-C and certain additional parameters have been included in the Form e-C itself. These matters are discussed below.

Requirement to submit detailed information in Helaian Kerja
The IRB has simplified the Form e-C for YA 2019 in comparison to the YA 2018 Form e-C, by requiring the details of each item / disclosure to be submitted via the Helaian Kerja (HK) instead. It is noted however that more details have been requested via the HK for YA 2019, compared the prior years.

In addition, with effect from YA 2019, the HKs will form part and parcel of the Form e-C, and are to be submitted together with the Form e-C.

1. New HK-F: Summary of absorbed / surrendered / disregarded losses carried forward (including pioneer losses after tax relief period)

The Finance Act 2018, which was gazette on 27 December 2018, restricts the carry forward of unutilized business losses to seven years with effect from YA 2019 (see Special Tax Alert – Highlights of Budget 2019 – Part I, Special Tax Alert – Highlights of Budget 2019 – Part II, Special Tax Alert No.1/2018 and Tax Alert No.25/2018).

To ensure that losses for each YA are properly tracked, companies are now required to complete the new HK-F:

Summary of absorbed / surrendered / disregarded losses and losses carried forward (including pioneer losses after tax relief period), to be submitted together with Form e-C.

2. New JK-N: Information on Controlled Transactions

Companies undertaking controlled transactions within the meaning of Section 139 and 140A of the Income Tax Act 1967 (ITA) are now required to complete the new HK-N: Information on Controlled transactions.

This new HK-N is broadly similar to the existing Form MNE pertaining to information on cross border transaction. Which some taxpayers would be familiar with. Previously, the Form MNE was only required to be completed and submitted by taxpayer upon specific request by the IRB.

With the new HK-N, impacted companies will be required to provide comprehensive details in relation to related party transaction and the parties they are dealing with. Significantly more information will be required as compared to prior Years’ disclosures required in the Form e-C (Part N: Transaction between related companies).

Examples of the information which would need to be disclosed in the HK-N include:

i. Specific classification of the taxpayer itself, e.g. whether it is a toll-manufacturer, limited- risk distributor, franchisor, service provider (and if so, the type of service provider), etc.
ii. Disclosure of specific categories of controlled transactions undertaken with parties in and outside Malaysia, including sales, purchases, loans, guarantee fees, advertising, marketing and promotions, research and development, cost contribution agreements
iii. Detailed disclosure of top-10 related party transaction, including the name, country code and business activity of the counterparty
iv. Disclosures of transaction with counterparties in jurisdictions with a lower corporate income tax rate than Malaysia, including the name, country code and business activity of the counterparty
v. Disclosures of business restructuring, research & development activities and cash pooling activities undertaken by the taxpayer

Taxpayers and their advisors would need the ensure that sufficient time and resources are available to accurately compile and analyses the information required, to ensure that HK-N is completed in a correct and consistent manner. Taxpayers may not have all the necessary information required to complete the form HK-N at their disposal and may need to reach out to their associated parties for certain information.

3. New item F8 (Form e-C): Subject to interest restriction under section 140C

The Finance Act 2018 introduced the new Section 140C into the ITA, to legislate earnings stripping rules (ESR) with effect from 1 January 2019 (Special Tax Alert No.25/2018).
Section 140C stipulates that in ascertaining the adjusted income of a person from his business sources, no deduction shall be allowed in respect of any interest expense in a controlled transaction granted directly or indirectly to that person, which is in excess of the maximum amount of interest as determined under any rules made under the ITA. The relevant rules have not yet been released.

In line with the above, item F8 has been incorporated in the YA 2019 Form e-C require taxpayers to specify whether or not the company is subject to “interest restriction” underSection 140C of the ITA.

 
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