Malaysia Tax

Quick links: Deloitte Malaysia Inland Revenue Board

Takeaways: Accelerated capital allowance for plant and machinery used for the manufacture of promoted products

Events/seminars: Tax and Transfer Pricing Audit 13 September 2013 9.00 am–12.30 pm with Japanese translation 1.30 pm-5.00 pm Contact Ingrid 03-7712 5136 GST Workshop: Manufacturing & Exports 18 September 2013 Contact Audrey 03-7725 7765 or Noorashikin 03-7712 5138 Global Employer Services Seminar 19 September 2013 Contact Zakiah 03-7712 5295

Important deadlines: Due date for 2013 tax estimates for companies with October year-end (1 October 2013)

6th month revision of tax estimates for companies with March year-end

Tax Espresso

9/2013 September 2013

Tax developments

Accelerated capital allowance for plant and machinery incurred in manufacturing promoted

products

Malaysian Investment Development Authority (MIDA) has issued a guideline on the procedure for

applying for a confirmation letter to support a claim for accelerated capital allowance by the

company. The following procedure / conditions will apply:

(a) Application is to be made to MIDA after the completion of the 15-year period of eligibility for

reinvestment allowance.

(b) The company is involved in the business of manufacturing promoted products.

(c) The company reinvests in plant and machinery.

(d) Two copies of the completed form ACA-Application for Confirmation Letter for a Company

which Manufactures Promoted Products under the Promotion of Investments Act 1986 are to

be submitted to MIDA together with a copy of the Memorandum and Articles of Association,

Certificate of Incorporation (Form 9) and Registered Address (Form 44) of the company.

With the letter from MIDA confirming that the company carries on a business of manufacturing

promoted products as determined under the Promotion of Investments Act 1986, the company can

claim accelerated capital allowance as follows:

Initial allowance – 40%

Annual allowance – 20%

Guidelines on particulars of payments to agents, dealers or distributors (Form CP58) -

Addendum

The Inland Revenue Board Malaysia (IRBM) has issued an addendum to clarify that the following

payments to agents, dealers or distributors are not considered as incentives to be included in the

Form CP58:

(a) Appreciation Night held in Malaysia for agents, dealers or distributors who have achieved a

9th month revision of tax estimates for companies with December year-end

Statutory filing of 2013 tax returns for companies with February year-end

target – dinner, entertainment and accommodation.

(b) Dinner or entertainment held in Malaysia for company anniversary or religious or cultural

festivals such as Hari Raya Aidilfitri, Chinese New Year, Deepavali or Christmas.

(c) Convention that includes leadership training, management training and other activities for the

purpose of increasing sales held in Malaysia (excluding a travel package in Malaysia that has

been considered as a non-cash incentive)

Taxation of Business Trust (Public Ruling No. 10/2013)

The IRBM has issued Public Ruling No. 10/2013 on Taxation of Business Trust to explain the tax

treatment accorded to a business trust which is registered with Securities Commission Malaysia.

A “business trust” means a unit trust scheme where the operation or management of the scheme

and the scheme’s property or asset is managed by a trustee-manager. The trustee-manager holds

legal ownership of assets as a trustee and also manages the business of the trust as its operator.

The business trust is given the same tax treatment as a company such as:

(a) Residence status – control and management of the business trust is exercised in Malaysia.

(b) Basis period – Financial accounting period of 12-months is the basis period.

(c) Controlled transfer of plant and machinery between related business trusts.

(d) Group relief – transfer of losses from surrendering entity to claimant entity.

(e) Tax incentives under the Income Tax Act 1967, Rules and Orders.

The business trust is not eligible for the following preferential tax treatment which is accorded to a

company:

(a) A business trust with a unit capital of not more than RM2.5 million is required to submit an

estimate of tax payable within 3 months from the date of commencement of its operations.

(b) The preferential tax rate of 20% does not apply to a business trust.

(c) Special allowance for small value assets does not apply to a business trust.

For tax enquiries, email or call:

Business Tax

Compliance & Advisory

Yee Wing Peng (603) 7712 5250

Alex Wong (605) 255 5358

Ng Lan Kheng (604) 228 8255

Financial Services

Chee Pei Pei (603) 7712 5132

International Tax

K Sandra Segaran (603) 7712 5142

Mergers & Acquisitions

Sim Kwang Gek (603) 7712 5134

Oil & Gas

Tan Hooi Beng (603) 7712 5122

R&D and Government Incentives

Daniel Lim (603) 7712 5139

Real Estate

Tham Lih Jiun (603) 7712 3899

Tax Audit & Investigation

Chow Kuo Seng (603) 7712 5137

Global Employer Services

Ang Weina (603) 7712 5143

Indirect Tax

Fan Kah Seong (603) 7712 5105

Tan Eng Yew (603) 7712 5164

Robert Tsang (+65) 6530 5523

Transfer Pricing

Theresa Goh (603) 7712 5135

Level 19, Uptown 1

1, Jalan SS21/58, Damansara Uptown

47400 Petaling Jaya, Selangor

Malaysia

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