CPA Tax & Investment Review 2009 - The Malaysian Institute ...

CPACPATAX & INVESTMENTR E V I E W2 0 0 9

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CPA Tax & Investment Review 2009

Copyright © 2009 by The Malaysian Institute of Certified Public Accountants

All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior writ-ten permission of the publisher.

Perpustakaan Negara Malaysia Cataloguing in Publication Data

CPA Tax & Investment Review 2009ISBN 978-983-2657-19-4

Published by

The Malaysian Institute of Certified Public Accountants (Institut Akauntan Awam Bertauliah Malaysia) (3246-U)

No. 15, Jalan Medan Tuanku, 50300 Kuala Lumpur, Malaysia Tel: (603) 2698 9622 Fax: (603) 2698 9403 E-mail: [email protected] Website: www.micpa.com.my

Printed in Malaysia

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The CPA Tax and Investment Review is intended to serve as a quick source of reference on the latest changes in tax laws and

regulations as well as Government’s policies and guidelines on investment and incentives.

The publication contains updates on tax laws and regulations, an index of current amendments to the Income Tax Act and related legislation, and a summary of recent tax cases. It also contains quick information on doing business in Malaysia, including Malaysia’s investment policies and incentives; the procedures for incorpora-tion of companies; guidelines on foreign investment; list of promoted activities and products; immigration procedures and the contact numbers of the relevant Ministries, Government agencies and regulatory authorities.

The Institute hopes that the publication will not only assist members in their work as business professionals but also their clients and other businesses as a handy source of reference on the latest changes and developments in tax laws, investment policies, incentives and other relevant information on doing business in Malaysia.

I would like to take this opportunity to thank the Institute’s Tax Practice Committee for their technical input in the production of this publication. I would also like to thank the various Ministries and Government agencies, especially the Malaysian Industrial Development Authority (MIDA), for allowing us to extract relevant information from their guidelines and publications.

Dato’ Nordin BaharuddinPresidentMICPA

Forewordby President

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Special appreciation is expressed to the following Ministries, Government agencies and accounting firms for their significant

contributions and technical input towards the production of the CPA Tax and Investment Review.

Ministries and Government Agencies:

Kementerian Perdagangan Antarabangsa & Industri Ministry of International Trade and Industry (MITI)

Lembaga Hasil Dalam Negeri (LHDN) Inland Revenue Board (IRB)

Malaysian Industrial Development Authority (MIDA)

Percetakan Nasional Malaysia Berhad

Accounting Firms

BDO Binder Tax Services Sdn Bhd

Deloitte KassimChan Tax Services Sdn Bhd

Ernst & Young Tax Consultants Sdn Bhd

Horwath KL Tax Sdn Bhd

KPMG

Mazars Taxation Services Sdn Bhd

PFA Tax Services Sdn Bhd

PricewaterhouseCoopers

Taxand Malaysia Sdn Bhd

Acknowledgement

Foreword by President iii

Acknowledgement iv

1. IRB (Inland Revenue Board) Guidelines and Rulings

A. Summary of Public Rulings Issued by Inland Revenue Board 4

B. IRB Guidelines 20

2. Dialogues with IRB (Inland Revenue Board)

A. Dialogue with Technical Department of IRB 38

B. Dialogue with Revenue Management Department of IRB 107

C. Minutes of Meeting of IRB with Accounting Bodies – Desire 134

3. Royal Malaysian Customs Guidelines and Minutes of Meetings

A. Royal Malaysian Customs Guidelines 202

B. Minutes of Meetings of Consultative Panel between the Customs and Private Sector 241

4. Indirect Taxes

A. Amendments to Customs Legislation 290

B. Amendments to Excise Legislation 292

C. Amendments to Service Tax Legislation 293

D. Others 294

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Part I – Tax Review

Contents

vi


5. Summary of Tax Cases

A. Malaysian Special Commissioners' Decisions 300

B. Malaysian Courts' Decisions 338

6. Gazette Notifications

Amendments to : Income Tax Act, 1967 Promotion of Investment Act, 1986 Stamp Act, 1949 360

7. Guidelines from Ministry of Finance, Ministry of Agriculture and Malaysian Industrial Development Authority 376

8. MIDA (Malaysian Industrial Development Authority) Investment Policy and Incentives

A. Approval of Manufacturing Projects & Incorporating a Company 392

B. Guidelines on Equity Policy 399

C. Incentives for Investment 403

D. Taxation 474

E. Banking, Finance and Foreign Exchange Administration 484

F. Immigration Procedures 515

G. List of Promoted Activities and Products 524

H. Useful Addresses 549

Finance Act 2009 (Act 693) 572

Part II – Investment Review

Appendix

IRB(INLAND REVENUE BOARD)GUIDELINEs AND RULINGs

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*1

2009

17.04.2009 This Addendum provides clarification in relation to tax exemption on certain benefits-in-kind received by an employee pursuant to his employment.

Third Addendum to Public Ruling No. 2/2004

*2 Addendum to Public Ruling No. 3/2005

05.02.2009 This Addendum provides clarification on the change in the determination of value of living accommodation benefit provided for the employee by the employer.

*3 Second addendum to Public Ruling No. 1/2006

25.02.2009 This Addendum provides clarification in relation to tax exemption on perquisites received by an employee pursuant to his employment in respect of: a) innovation or productivity award - paragraph 25C, Schedule 6 of the

Income Tax Act 1967 (17A) b)(i) gift of a new personal computer - Income Tax (Exemption)(No. 4)

Order 2008; and (ii) allowances, subsidised interest and gifts - the relevant Income Tax

exemption order yet to be gazetted.

A Summary of Public Rulings Issued by Inland Revenue Broad

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1 • IRB (Inland Revenue Board) G

uidelines and Rulings

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*1

2008

22.10.2008 This Ruling explains: a) the tax treatment of entertainment expense as a deduction against

gross income of a business; and b) steps to determine the amount of entertainment expense allowance

as a deduction.

Public Ruling No. 3/2008

*2 Public Ruling No. 2/2008 03.04.2008 This Ruling is meant to assist taxpayers in ascertaining their entitlement to Reinvestment Allowances (RA) under Schedule 7A of the Income Tax Act 1967 (ITA).

This Ruling provides clarification in relation to the: a) projects that qualify for RA b) expenditure that qualifies for RA c) period of eligibility for RA d) computation of RA.

*3 Addendum to Public Ruling No. 5/2004

03.04.2008 This Addendum provides clarification and tax treatment in relation to the: a) special deduction for research expenditure granted to a pioneer

company under subsection 34(4A) of the Income Tax Act 1967 (ITA); and

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b) ascertainment of the adjusted income of a pioneer company which has made an election under subsection 34A(4A) of the ITA

The Addendum also provides further clarification in relation to Public Ruling No. 5/2004 with regards to the:c) the definition of holding company (paragraphs 15.5 and 16.3); and d) the amount claimed in the tax computation (paragraph 20).

4 Addendum to Public Ruling No. 5/2004 Double Deduction Incentive on Research Expenditure

03.04.2008 This Addendum provides clarification and tax treatment in relation to the: a) special deduction for research expenditure granted to a pioneer

company under subsection 34(4A) of the Income Tax Act 1967 (ITA)b) ascertainment of the adjusted income of a pioneer company which

has made an election under subsection 34A(4A) of the ITAc) Public Ruling No. 5/2004 with regards to: – the definition of holding company (paragraphs 15.5 and 16.3) – the amount claimed in the tax computation (paragraph 20).

5 Public Ruling No. 2/2008 Reinvestment Allowance

03.04.2008 This Ruling is meant to assist taxpayers in ascertaining their entitlement to Reinvestment Allowance (RA) under Schedule 7A of the Income Tax Act 1967. It provides clarification in relation to the: a) projects that qualify for RA b) expenditure that qualifies for RA c) period of eligibility for RA d) computation of RA.

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NO TITLEDATE OF

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6 Public Ruling No. 1/2008 Special Allowances for Small Value Assets

27.03.2008 This Ruling explains the special allowances accorded to small value assets not exceeding RM1,000 which are used in a business.

7 Second Addendum to Public Ruling No. 2/2005 Computation of Income Tax Payable by a Resident Individual

03.01.2008 This Second Addendum provides clarification on the change in tax treatment of personal deductions which can be claimed by a resident individual in respect of:a) further education fees - paragraph 46(1)(f), Income Tax Act (ITA) 1967 (effective from year of assessment 2006) b) reading material expenses - paragraph 46(1)(i), ITA 1967 (effective from year of assessment 2007) c) purchase of personal computer - paragraph 46(1)(j), ITA 1967 (effective from year of assessment 2007) d) children - subsection 48(3), ITA 1967 (effective from year of assessment 2006)

8 Addendum to Public Ruling No. 4/2005 Withholding Tax on Special Classes of Income

30.11.2007 This Addendum provides clarification on the change in tax treatment of:a) Exemption on specific special classes of income chargeable to tax under paragraph 4A(ii), Income Tax Act (ITA) 1967; andb) the consequences of not deducting and remitting tax in relation to the special classes of income - subsection 109B(2), ITA 1967.

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9 Addendum to Public Ruling No. 1/2006 Perquisites from Employment

30.08.2007 This Addendum provides clarification on the change in tax treatment of perquisites for service awards received by an employee pursuant to his employment.

10 Addendum to Public Ruling No. 3/2004 Entertainment Expense

23.08.2007 This Addendum provides clarification on the change in tax treatment of expenditure incurred by an employer for the provision of local leave passage benefit to an employee.

11 Addendum to Public Ruling No. 1/2003 Tax Treatment of Leave Passage

23.08.2007 This Addendum provides clarification on the change in tax treatment of:a) benefit of meals and accommodation provided by an employer to an employee pursuant to local leave passages - paragraph 13(1)(b)(ii)(A), Income Tax Act (ITA) 1967; and b) deduction for expenditure incurred by an employer on local leave passages provided to an employee - proviso (vii) of paragraph 39(1)(l), Income Tax Act (ITA) 1967.

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2006

06.07.2006 This Addendum provides clarification and the current tax treatment on the following: a) deduction for husband - section 45A of the Income Tax Act 1967

(ITA); and b) tax rebate for zakat or fitrah payments - subsection 6A(3) of the

ITA.

Addendum to Public Ruling No. 2/2005 Computation of Income Tax Payable by a Resident Individual

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NO TITLEDATE OF

ISSUEOBJECTIVE

2 Public Ruling No. 6/2006 Tax Treatment of Legal and Professional Expenses

06.07.2007 This Ruling explains:a) the deductibility of legal and professional expenses; andb) the non-deductibility of legal and professional expenses.

3 Public Ruling No. 5/2006 Professional Indemnity Insurance

31.05.2006 This Ruling explains:a) the deductibility of premium expense paid for a professional

indemnity insurance policy; andb) the taxability of insurance proceeds received on professional

indemnity insurance.

4 Public Ruling No. 4/2006 Valuation of Stock in Trade and Work in Progress (Part 1)

31.05.2006 This Public Ruling on valuation of stock in trade and work in progress will be dealt with in 2 parts. Part 1 of this Ruling explains:a) the importance of valuation of stock in trade and work in progress

for the purpose of ascertaining the adjusted income of a person from a business for the basis period for a year of assessment;

b) the bases of valuation of stock in trade and work in progress; andc) the special rules to be applied when the person permanently

ceased to carry on the business.

5 Public Ruling No. 3/2006 Property Development & Construction Contracts

13.03.2006 This Ruling explains:a) the basis of determining gross income for the purpose of computing

adjusted income derived from the business of property development; and

b) the basis of determining gross income for the purpose of computing adjusted income from the business of construction contracts.

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6 Public Ruling No. 2/2006 Tax Borne By Employers Construction Contracts

17.01.2006 This Ruling explains:a) the computation of the perquisite relating to income tax of the

employee borne by the employer; andb) the computation of tax payable by the employee who is entitled to

this perquisite.

7 Public Ruling No. 1/2006 Perquisites from Employment

17.01.2006 This Ruling explains:a) the distinction between perquisites and benefits-in-kind (BIK);b) the meaning of perquisites in relation to an employment;c) types of perquisites and the tax treatment;d) the employer’s responsibilities upon the granting of perquisites to

the employee; ande) the employee’s responsibilities on receiving such perquisites.

8 Second Addendum to Public Ruling No. 2/2004 Benefit-In-Kind

17.01.2006 This Second Addendum to the Public Ruling No. 2/2004 is to explain the circumstances under which goods and services offered at discounted prices can qualify for an administrative concession and be regarded as benefits-in-kind which are not taxable.

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NO TITLEDATE OF

ISSUEOBJECTIVE

1

2005

08.12.2005 This Ruling explains:a) the tax treatment accorded to trade associations; andb) the application of relevant Income Tax Exemption Orders relating to

trade associations.

Public Ruling No. 6/2005 Trade Association

2 Public Ruling No. 5/2005 Deduction for Loss of Cash and Treatment of Recoveries

14.11.2005 This Ruling explains:a) the deductibility of loss of cash in the course of business caused by

theft, defalcation or embezzlement; andb) the income tax treatment of recoveries in respect of the loss of cash

which has been given a tax deduction in an earlier year.

3 Public Ruling No. 4/2005 Withholding Tax on Special Classes of Income

12.09.2005 This Ruling explains:a) the special classes of income that are chargeable to tax under

section 4A of the Income Tax Act, 1967 (ITA);b) the deduction of tax from these special classes of income; andc) the consequences of not deducting and remitting tax deducted from

these special classes of income.

4 Public Ruling No. 3/2005 Living Accommodation Benefit Provided for the Employee by the Employer

11.08.2005 This Ruling explains:a) the tax treatment of living accommodation provided for an employee

by his employer;b) the method used to calculate the value of that benefit;

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c) the circumstances in which the value of that benefit can be reduced; and d) the expenses related to such benefit which can be deducted for income tax purposes and the method or calculation.

5 Public Ruling No. 2/2005 Computation Of Income Tax Payable By A Resident Individual

06.06.2005 This Rulings explains the deductions that are allowable against the total income of an individual in computing his chargeable income for a year of assessment and the income tax computation for an individual for a year of assessment.

6 Addendum to Public Ruling No. 2/2004 Benefits-In-Kind

20.05.2005 This Addendum explains further the tax treatment of recreational club membership and telephone provided by the employer to his employee which are personally enjoyed by the employee.

7 Public Ruling No. 1/2005 Computation Of Total Income for Individual

05.02.2005 This Ruling explains how total income in respect of an individual is computed.

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2004

30.12.2004 This Ruling explains the particular activities that qualify as research, the expenditure that qualifies for double deduction and the general procedure for the application for the double deduction incentive in respect of research expenditure.

Public Ruling No. 5/2004 Double Deduction Incentive on Research Expenditure

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NO TITLEDATE OF

ISSUEOBJECTIVE

2 Public Ruling No. 4/2004 Employee Share Option

09.12.2004 This Ruling explains the tax treatment in respect of a benefit arising from an employee share option scheme (ESOS) received by an employee from his employer by reason of his employment. It also explains the following:a) the circumstances in which the benefit from ESOS will arise;b) determination of the amount or value to be taken as gross income

from a source of employment of an employee;c) employer’s responsibilities upon launching an ESOS and employee’s

responsibilities on receiving ESOS benefit.

3 Public Ruling No. 3/2004 Entertainment Expense

08.11.2004 This Ruling explains the tax treatment of entertainment expense as a deduction against gross income from a business.

4 Public Ruling No. 2/2004 Benefits-in-Kind

08.11.2004 This Ruling explains the tax treatment in relation to benefits-in-kind (BIK) received by an employee from his employer for exercising an employment and the method of ascertaining the value of BIK in order to determine the amount to be taken as gross income from employment of an employee.

5 Public Ruling No. 1/2004 Income from Letting of Real Property

30.06.2004 This Ruling considers: a) the treatment of rent as a non-business source of income under

section 4(d) of the Income Tax Act 1967 (the Act)b) the situations or circumstances where rent or income from the

letting property can be treated as business income of a person under

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c) how all properties of a person are to be grouped in several categories in computing the statutory income under section 4(d) of the Act.

1

2003

30.12.2003 This Ruling explains the deductibility of premium expense paid for a “key-man” insurance policy; and the taxability of insurance proceeds received on “key-man” insurance.

Public Ruling No. 2/2003 “Key-man” Insurance

2 Public Ruling No. 1/2003 Tax Treatment of Leave Passage

05.08.2003 This Ruling explains the tax treatment of: a) leave passage provided for the employee by or on behalf of his

employer as a benefit or amenity taxable under gains or profits from an employment; and

b) expenditure incurred on leave passage provided to the employee by the employer in ascertaining the adjusted income of the employer.

1

2002

08.07.2002 This Ruling applies in respect of pre-operational and pre- commencement of business expense allowable to a company under the following:a) Income Tax (Deduction of Incorporation Expenses) Rules, 1974

[p.u.(A) 134 /1974]b) Schedule 4B, Income Tax Act 1967 – Qualifying Pre-operational

Business Expenditure

Public Ruling No. 2/2002 Allowable Pre-operational & Pre-commencement of Business Expenses

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c) Income Tax (Deductions for Approved Training) Rules 1992 [P.U.(A)61 /1992] – as amended by Income Tax (Deductions for Approved Training) (Amendment) Rules 1995 [P.U.(A)111/1995]; and Income Tax (Deductions of Pre-commencement of Business Training Expenses) Rules 1996 [P.U.(A) 160 /1996].

2 Public Ruling No. 1/2002 Deduction for Bad & Doubtful Debts and Treatment of Recoveries

02.04.2002 This Ruling applies in respect of the deduction of bad and doubtful debts under section 34 and the treatment of recoveries under section 30 of the Income Tax Act 1967. It is effective for year of assessment 2002 and subsequent years of assessment.

1

2001

30.04.2001 This Ruling applies in respect of section 21A of the Income Tax Act 1967. It is effective for the year of assessment 2001 and subsequent years of assessment. This Ruling supersedes Public Ruling 2/2000 dated March 1, 2000 where it relates to companies.

Public Ruling No. 7/2001 Basis Period for Business & Non-Business Sources (Companies)

2 Public Ruling No. 6/2001 Basis Period for a Business Source (Individuals & Persons other than Companies/Co-operatives)

30.04.2001 This Ruling applies in respect of section 20 and 21 of the Income Tax Act 1967. It is effective for the year of assessment 2001 and subsequent years of assessment. This Ruling supersedes Public Ruling 3/2000 dated March 1, 2000.

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3 Public Ruling No. 5/2001 Basis Period for A Business Source (Co-operatives)

30.04.2001 This Ruling applies in respect of section 20 and 21 of the Income Tax Act 1967. It is effective for the year of assessment 2001 and subsequent years of assessment. This Ruling supersedes Public Ruling 2/2000 dated March 1, 2000 where it relates to co-operatives.

4 Public Ruling No. 4/2001 Basis Period for a Non-Business Source (Individuals & Persons other than (Companies)

30.04.2001 This Ruling applies in respect of section 20 and 21 of the Income Tax Act 1967. It is effective for the year of assessment 2001 and subsequent years of assessment. This Ruling supersedes Public Ruling No. 1/2000 dated March 1, 2000.

5 Public Ruling No. 3/2001 Appeal Against an Assessment

18.01.2001 This Ruling applies in respect of section 99, 100, 101 and 102 of the Income Tax Act 1967. It is effective for the year of assessment 2001 and subsequent years of assessment.

6 Public Ruling No. 2/2001 Computation of Initial & Annual Allowances in Respect of Plant & Allowances

18.01.2001 This Ruling applies in respect of the computation of annual allowances for plant and machinery under paragraph 15, Schedule 3, Income Tax Act, 1967 and the Income Tax (Qualifying Plant Annual Allowances) Rules 2000 [P.U.(A) 52/2000]. This Ruling is effective for year of assessment 2000 (current year basis) and subsequent years of assessment.

7 Public Ruling No. 1/2001 Ownership of Plant and Machinery for the Purpose of Claiming Capital Allowances

18.01.2001 This Ruling applies in respect of ownership of plant and machinery for the purpose of claiming initial and annual allowances under paragraph 10 & 15, Schedule 3 to the Income Tax Act, 1967. It is effective from the year of assessment 2000 (current year basis) and subsequent years of assessment.

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NO TITLEDATE OF

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1

2000

30.12.2000 This Ruling considers:a) what constitutes or amounts to wilful evasion or intent to evade or to assist any other person to evade tax under section 114(1) of the Income Tax Act (ITA) 1967;b) the nature of assistance or advice given by any person in the preparation of a return that can be regarded as an offence under section 114(1A) of the Act; andc) the consequences of such wilful evasion, intent to evade tax or to assist any other person to evade tax, and of giving of assistance or advice in the preparation of a return which results in the understatement of liability for tax.

Public Ruling No. 8/2000 Wilful Evasion of Tax and Related Offences

2 Public Ruling No. 7/2000 Providing Reasonable Facilities And Assistance

16.06.2000 This Ruling considers:a) what facilities and assistance a person should provide to the Director

General or an authorized officer; b) the consequences of failing to provide such facilities and

assistance.

3(i) Public Ruling No. 6/2000 Keeping Sufficient Records (Persons other than Companies & Co-operatives) - Revised

30.06.2001 This Ruling considers:a) what constitute sufficient records that a person other than a

company or an individual needs to keep when carrying on a business or an activity;

b) the consequences of failing to keep sufficient records.

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(ii) Public Ruling No. 6/2000 Keeping Sufficient Records (Persons other than Companies & Co-operatives)

01.03.2003

4 Public Ruling No. 5/2000 Keeping Sufficient Records (Individuals & Partnerships)- Revised

30.06.2001 This Ruling considers:a) what constitute sufficient records that an individual needs to keep

when carrying on a business as a sole proprietorship or a partnership; and

b) the consequences of failing to keep sufficient records.

5(i)

(ii)

Public Ruling No. 4/2000 Keeping Sufficient Records (Companies & Co-operatives) - Revised

Public Ruling No. 4/2000 Keeping Sufficient Records (Companies & Co-operatives)

30.06.2001

01.03.2000

This Ruling considers:a) what constitute sufficient records that a company or a co-operative

needs to keep; b) the consequences of failing to keep sufficient records.

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NO TITLEDATE OF

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6 Public Ruling No. 3/2000 Basis Period for a Business Source (Individuals & Persons other than Companies & Co-operatives)

01.03.2000 This Ruling considers:a) the basis period for an individual or a person other than a company

or a co-operative commencing a new business; b) the basis period for an individual or a person other than a company

or a co-operative changing the accounting date of his/its existing business;

c) the basis period for an individual joining a partnership.

7 Public Ruling No. 2/2000 Basis Period for a Business Source (Companies & Co-operatives)

01.03.2000 This Ruling considers:a) the basis period for a company or a co-operative commencing a new

business; b) the basis period for a company or a co-operative changing the

accounting date of its existing business;c) the basis period for a company joining a partnership.

8 Public Ruling No. 1/2000 Basis Period for a Non-business Source

01.03.2000 This Ruling considers the basis period for a non-business source.

Note: The above Public Rulings are available on Inland Revenue Board’s website at www.hasilnet.org.my. * Public Rulings not published in previous issue of CPA Tax Review.

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B IRB Guidelines

I. ExtEnsIonoftImEforsubmIssIonofborange-bE

1.0 IntroDuCtIon

The Inland Revenue Board (IRB) has allowed an extension of time until Sunday, May 3, 2009 for tax agents to submit the Borang e-BE and e-M (non-business source) through the tax agent’s module (TAeF) only.

MICPA Circular No.: TEC/020/04/2009/WIssue date : April 30, 2009

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1 • IRB (Inland Revenue Board) Guidelines and Rulings

II. EstablIshmEnt of joInt tax workIng group onfInanCIalrEportIngstanDarDs(jtwg-frs)

1.0 Since 1978, the provisions of International Accounting Standards (IAS) had been gradually incorporated into the local standards and greater harmonisation was achieved following the establishment of the Malaysian Accounting Standards Board (MASB) as an independent standard-setting authority in 1997. In an effort to create a single set of global accounting standards based on the International Financial Reporting Standards (IFRS), the Financial Reporting Standards (FRS) was introduced in 2005 as a result of evolvement from those local standards developed by MASB up to 2003. FRS developed by MASB is set to achieve full convergence with IFRS by January 1, 2012.

2.0 Many of the FRS adopted in or developed by Malaysia have tax implications. There are also instances where the relevant tax treatments are not clear even when the provisions of the Income Tax Act 1967 are considered.

3.0 In light of the above, the Tax Practice Committee of The Malaysian Institute of Certified Public Accountants (MICPA), the Taxation Committee of the Malaysian Institute of Accountants (MIA) and the Technical and Public Practice Committee of the Chartered Tax Institute of Malaysia (formerly known as Malaysian Institute of Taxation) have decided to pool their resources together and establish a joint working group, called the Joint Tax Working Group on FRS (JTWG-FRS) to look into the various tax issues arising from the adoption of FRS in Malaysia.

4.0 Initially, the JTWG-FRS will focus on eight FRS as follows:- FRS 2 Share-based Payment FRS 5 Non-current Assets Held for Sale and Discontinued Operations FRS 102 Inventories FRS 116 Property, Plant and Equipment FRS 117 Leases FRS 121 The Effects of Changes in Foreign Exchange Rates FRS 139 Financial Instruments: Recognition and Measurement FRS 140 Investment Property Other FRS will be reviewed progressively from the tax perspective.

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5.0 Upon completion of the study of a particular FRS, the JTWG-FRS may, highlight and provide comments on major tax implications related to the FRS and propose appropriate tax treatments in respect of the FRS, where applicable, to the relevant tax authorities for consideration.

6.0 Comments and proposals on the eight FRSs stated above may be submitted to the MICPA Secretariat at [email protected] by may,.312009 for the JTWG-FRS consideration.


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1.0 Further to the Circular No. TEC/005/02/2008W, the prescribed form under Section 152A of the Income Tax Act 1967 in relation to authority given by the taxpayer to the tax agent to file return electronically has been amended to replace Borang CP55 [1/2008]. The latest Borang CP55 [1/2009] is available on the Inland Revenue Board (IRB) website at www.hasil.org.my in PDF and Microsoft Excel format.

2.0 A copy of the sample Borang CP55 [1/2009] is attached as per Annexure I.


III. borang Cp55 [1/2009] - authorIty to fIlE rEturnElECtronICallyunDErsECtIon152aofInComEtaxaCt1967

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LEMBAGA HASIL DALAM NEGERI MALAYSIA KUASA PEMFAILAN PENYATA SECARA ELEKTRONIK

AUTHORITY TO FILE RETURN ELECTRONICALLYBorang ini ditetapkan di bawah seksyen 152 Akta Cukai Pendapatan 1967

This form is prescribed under section 152 of the Income Tax Act 1967

No. Rujukan Cukai / Tax Reference No.

No. Kad Pengenalan / No. Pasport / No. Polis / No. Tentera *Identity Card No. / Passport No. / Police No. / Army No. *

AKUAN PEMBAYAR CUKAI / TAXPAYER’S DECLARATION

Saya, I

(nama penuh dalam huruf besar / full name in block letters)

yang menjalankan kuasa di bawah subseksyen 152A(3) Akta Cukai Pendapatan 1967, dengan ini mengakui bahawa:- in the exercise of authority conferred under subsection 152A(3) of the Income Tax Act 1967, declare that:-

kuasa diberikan kepada ejen cukai berikut untuk memfailkan penyata bagi pihak saya / syarikat / kumpulan orang / majikan / perkongsian * secara elektronik; danauthority is hereby given to the following tax agent to furnish the return on my behalf / company / body of persons / employer / partnership * through electronic filing; and

TandatanganSignature

Tarikh Date

maklumat yang diberikan kepada ejen cukai tersebut untuk penyediaan penyata adalah benar, lengkap dan betul the information supplied to the tax agent for the preparation of the return is true, complete and correct

seperti mana yang dikehendaki di bawah peruntukan seksyen 152A Akta Cukai Pendapatan 1967. as required under the provision of section 152A of the Income Tax Act 1967.

Nama Ejen Cukai Name of Tax Agent

(huruf besar / block letters)

No. Kelulusan Ejen Cukai / Tax Agent’s Approval No.

Jawatan Designation

CP55 [1/2009]

Tarikh kuasa diberikan Date of authority given

sehingga pembatalan kuasa diberikan secara bertulis.until a written cancellation of authority is given.

(jika bertindak bagi pihak syarikat / kumpulan orang / majikan / perkongsian / if acting on behalf of company / body of persons / employer / partnership)

Nama Syarikat / Kumpulan Orang / Majikan / Perkongsian *Name of Company / Body of Persons / Employer / Partnership *

No. Pendaftaran dengan SSM atau lain-lain / Registration No. with CCM or others

Borang ini dibuat bagi pihak saya sendiri / This form is made on my own behalf

Borang ini dibuat bagi pihak syarikat / kumpulan orang / majikan / perkongsian *This form is made on behalf of company / body of persons / employer / partnership *

( * Potong yang tidak berkenaan / Delete whichever is not relevant )

**

**

( ** Tandakan “ X ”di petak yang berkenaan / Enter “ X ” in the relevant box )

Nama Firma Name of Firm

(huruf besar / block letters)

annexure1

25


1.0 The Inland Revenue Board (IRB) has issued the programme for submission of 2008 income tax return forms. In this regard, the IRB advised that the due dates for the filing of income tax return forms for the various categories of taxpayers should be noted and complied with.

2.0 All income tax return forms should be submitted to Pusat Pemprosesan of the IRB in Pandan Indah, Kuala Lumpur.

3.0 A copy of the programme is attached as per Annexure I.

MICPA Circular No.: TEC/007/02/2009/W Issue date : February 27, 2009

Iv. programmE for submIssIon of yEar 2008 InComEtaxrEturnforms

26


annexureIjaDualpEngEluaranam/pEngEmbalIanborangnyataCukaIpEnDapatan

2008

jenisborang

kategori tarikhpengeluaranam

tarikhakhirpengembalian

BE Individu Pemastautin – tidak menjalankan perniaagan

28 Februari 2009 30 April 2009

B Individu Pemastautin – menjalankan perniaagan

28 Februari 2009 30 Jun 2009

M Individu Bukan Pemastautin

28 Februari 2009

30 April 2009(tidak menjalankan

perniagaan)

30 Jun 2009 (menjalankan perniagaan)

TP Harta Pusaka

TF Pertubuhan

TJ Keluarga Sekutu Hindu

P Perkongsian 28 Februari 2009 30 Jun 2009

E Majikan 31 Januari 2009 31 Mac 2009

C1 Koperasi

1 Jun 20087 bulan dari tarikh penutupan akaun

TC Amanah Unit / Harta Tanah

TA Badan Amanah

TR Amanah Pelaburan Harta Tanah / Tabung Amanah Harta

C & R Syarikat -Tempoh perakaunan berakhir:Januari 2008 - Mac 2008April 2008 - Jun 2008Julai 2008 - Sept. 2008Okt. 2008 - Dis. 2008

1 April 20081 Julai 2008

1 Oktober 20081 Januari 2009

7 bulan dari tarikh penutupan akaun

alamatbagIpEnghantaranborangnyataCukaIpEnDapatan

bE/E b/p/m/tp/tf/tj C/r/C1/ta/tC/tr

Lembaga Hasil Dalam Negeri MalaysiaPusat PemprosesanAras 10-18, Menara CPersiaran MPAJ, Jalan Pandan Utama, Pandan Indah, Karung Berkunci 11054, 50990 Kuala Lumpur, Malaysia.



Pembayar cukai boleh berkunjung ke mana-mana cawangan LHDNM terdekat bagi mendapatkan bantuan untuk mengisi Borang Nyata Cukai Pendapatan

atau

terus menghubungi Pusat Khidmat Pelanggan di talian 1-300-88-3010untuk keterangan lanjut.

27


1.0 E-fIlIngsystEmforformsbE,b,m,panDE

E-Filing system will be made available with effect from the following dates:

Type of Form Individual Module Tax Agents Module (TAeF)

e-BE February 3, 2009 March 1, 2009

e-B February 3, 2009 March 1, 2009

e-M March 1, 2009 March 1, 2009

e-E March 1, 2009 March 1, 2009

e-P March 1, 2009 March 1, 2009

2.0 ExtEnsIonoftImEforsubmIssIonofborangC&r anDpaymEntoftax/DEbtDuEtogovErnmEnt

The Inland Revenue Board has agreed to extend the deadline for the submission of Forms C and R as follows. However, the Forms must be received by the IRB on or before the date mentioned below. The extension of time also applies to the payment of the balance of tax payable and debt due to the government.

Year of Assessment

Financial Year Ended Extended Deadline

2008 June 30, 2008 February 14, 2009

2008 December 31, 2008 August 14, 2009

2009 January 31, 2008 September 14, 2009

3.0 formEforyEarofrEmunEratIon2008

3.1 ExtensionoftimeforsubmissionofformE

Form E was sent to employers on January 31, 2009. The Form E should be submitted to the IRB within 30 days from the date of the gazette of Income Tax (Returns By Employers) Order 2009. The IRB has informed that the deadline to submit Form E has been extended to March 31, 2009.

3.2 submissionofEmployees'remunerationDetails-C.p.8D

(i) Form C.P. 8D must be submitted to the IRB Processing Centre in Pandan Indah.

v. fIlIngprogramforyEar2009

28


(ii) Form C.P. 8D may be submitted using one of the following methods:

(a) Through e-Filing if Form E is submitted through e-FIling.

(b) Submit a txt file in CD-Rom / diskette with the data specification as per the attached Annexure I, Part A.

(c) Submit a file in Microsoft Excel in CD-Rom / diskette with the specification as per the attached Annexure I, Part B.

4.0 ExtEnsIon of tImE for paymEnt of pCb anD taxEstImatE

An extension of time has been granted by the IRB as follows:

Due Date Extended Deadline

PCB Payment for January 2009

February 10, 2009 February 14, 2009

Tax Installment Payment for Companies, Co-operative and Trust Body under Section 107C - February 2009 Installment

February 10, 2009 February 14, 2009

5.0 rEstrICtIononthEusEofformsInpDfformat

In order to encourage the use of e-Filing and to ease the processing of forms, tax agents are no longer allowed to use forms in PDF format with effect from the following dates:

Categories of Forms Effective Date

C, R, C1, TA and TC (except TR) Year of Assessment 2009

B, BE, M, E, P, TP, TF and TJ Year of Assessment 2008

However, the forms in PDF format may be used by tax agents for years of assessment before the year of assessment mentioned above.

MICPA Circular No.: TEC/003/01/2009/W Issue date : January 20, 2009

29


annexureI

bahagIana

panDuanpEngEmukaanmaklumatC.p.8DDalamfaIltxt

maklumatmajIkan

maklumat jEnIs panjang pEnErangan Contoh

No. Rujukan E integer 10 No. E majikan. Diisi tanpa E di hadapan

290003000

Nama Majikan variable character

80 Nama majikan seperti yang dilaporkan kepada LHDNM

Syarikat Bina Jaya

Saraan Bagi Tahun

integer 4 Tahun saraan berkenaan

2008

Contohdatatxt:

290003000|Syarikat Bina Jaya|2008

Nota: Setiap medan diasingkan dengan delimeter | dan disimpan dalam fail txt,

maklumatpEkErja


Nama Majikan

variable character

60 Nama seperti dalam kad pengenalan.

Ali bin Ahmad

No. Rujukan Cukai

integer 11 No. rujukan seperti yang diberikan oleh LHDNM. Jika pekerja tiada no. rujukan cukai, ruangan ini dibiarkan tanpa diisi.

03770324020

30



No. Kad Pengenalan (K/P) Baru / Lama / No. Tentera / No. Polis / No. Pasport

variable character

12 Keutamaan diberikan kepada no. K/P baru diikuti dengan no. tentera, no. polis dan no. pasport digunakan untuk warganegara asing.

730510125580 atau A2855084 atau T0370834

Jumlah Saraan Kasar

Decimal 11 Jumlah Saraan Kasar adalah tanpa nilai sen.

RM 50000.70 dan RM 50000.20 dilaporkan sebagai 50000

Elaun / Perkuisit / Pemberian / Manfaat Yang Dikecualikan Cukai

Decimal 11 Jumlah Elaun /Perkuisit / Pemberian / Manfaat Yang Dikecualikan Cukai adalah tanpa nilai sen.


PCB Decimal 11 Jumlah PCB adalah tanpa nilai sen.


CP38 Decimal 11 Jumlah CP38 adalah tanpa nilai sen.


Contohdatatxt:

Ali bin Ahmad|03770324020|730510125580|50000|445|2555|1058 Mike Thompson|5822221110|ZZ5842211|20200|400|1520|3200

Nota : Setiap medan diasingkan dengan delimeter | dan disimpan dalam fail txt

31


bahagIanb

panDuan pEngEmukaan maklumat C.p. 8D DalammICrosoftExCEl

1. LHDNM telah menyediakan format C.P. 8D dalam bentuk Microsoft Excel 2003 untuk kemudahan majikan menyediakan data tersebut. Program tersebut boleh diperoleh melalui laman web LHDNM.

2. Media yang boleh digunakan ialah CD dan disket.

3. Majikan yang menggunakan kemudahan Microsoft Excel yang dibekalkan oleh LHDNM perlu menamakan fail mengikut piawaian seperti berikut:

YYHHHHHHHHHH_TTTT.XLS

YY : maklumat majikan dan pekerja (MP) HHHHHHHHHH : no. E TTTT : tahun saraan

Contoh : Majikan dengan No. E 2900030000 untuk tahun 2008 yang menggunakan Microsoft Excel.

1 fail akan dihantar kepada LHDNM dengan nama mp2900030000_2008.xls

4. Bagi majikan-majikan yang mempunyai sistem berkomputer sendiri dan mempunyai bilangan pekerja yang ramai, mereka digalakkan menyedia data tersebut dalam bentuk txt mengikut format yang disediakan di atas (Bahagian A).

5. Majikan yang memilih tidak menggunakan Microsoft Excel, maklumat majikan dan pekerja disimpan dalam 2 fail berbeza. Walau bagaimanapun, ia perlu dimasukkan dalam CD yang sama dan menggunakan nama fail mengikut piawaian di bawah:

YHHHHHHHHHH_TTTT.TXT

Y : maklumat majikan (M) atau pekerja (P) HHHHHHHHHH : no. E TTTT : tahun saraan

Contoh : Majikan dengan No. E 2900030000 untuk tahun 2008 yang menghantar fail txt.

2 fail akan dihantar kepada LHDNM dengan nama:

(1) m2900030000_2008.txt-mengandungi maklumat majikan

(2) p2900030000_2008.txt-mengandungi maklumat pekerja

32


panduan ralat yang dikeluarkan ketika menggunakan formatmicrosoftExcelyangdibekalkan.

bil. ralat mEsEjkEsalahan

1 no.E:Memasukkan nilai bukan digit dan melebihi 11 digit.

1. Nilai yang diterima adalah digit

2. Bilangan digit mesti kurang dari 11

2 namamajikan:Memasukkan nama majikan melebihi 80 aksara.

Panjang melebihi 80

3 saraanbagitahun:Memasukkan nilai bukan digit dan melebihi 4 digit.

Nilai bukan digit atau melebihi 4 digit

4 namapekerja:Memasukkan nama majikan melebihi 60 aksara.

Panjang melebihi 60

5 no.rujukanCukai:Memasukkan nilai bukan digit dan melebihi 11 digit.

Nilai yang dimasukkan bukan digit atau melebihi 11

6 no.k/pbaru/lama/no.tentera/no.polis/no.pasport:Memasukkan maklumat melebihi 12 aksara.

Panjang melebihi 12

7 jumlahsaraankasar:Memasukkan nilai melebihi 11 digit atau mengandungi nilai sen.

Nilai melebihi 11 digit atau mengandungi nilai sen.

8 Elaun/perkuisit/pemberian/manfaatyangDikecualikanCukai:Memasukkan nilai melebihi 11 digit atau mengandungi nilai sen.


9 pCb:Memasukkan nilai melebihi 11 digit atau mengandungi nilai sen.


10 Cp38:Memasukkan nilai melebihi 11 digit atau mengandungi nilai sen.


33


1.0 faIlurEtofIlEborangEbyEmployEr

The Inland Revenue Board (IRB) has informed that Borang E was sent to employers of active companies based on the records in the IRB's database. IRB has issued notice of compound to those employers who fail to submit the Borang E. Employers who received the Borang E should complete and submit the Borang E to the IRB within the stipulated period even if the company was dormant or does not have any employees. As a concession, compound that has been issued to companies that were dormant or have no employees or are under liquidation will be withdrawn provided written confirmation which is signed by the director / business owner is submitted to IRB certifying that the company was dormant or under liquidation together with the relevant supporting documents.

Employers are reminded that they should complete and submit the Borang E received from the IRB for a particular year of remuneration within the stipulated timeframe. Employers are also required to inform the IRB if the business is no longer active or the company is under liquidation.

2.0 taxrEturnformInpDfformat

The IRB has informed that tax agents are no longer allowed to file the tax return form in PDF format for the year of assessment 2008. In this regard, tax agents are encouraged to use e-filing or the original copy of the tax return form for filing tax return.

However, the tax return form in PDF format will still be made available on the IRB website for taxpayers who do not receive the tax return form and have difficulty in contacting or be present personally at the IRB office to obtain the original tax return form.

MICPA Circular No.: TEC/002/01/2009/WIssue date : January 20, 2009

vI. faIlurE to fIlE borang E by EmployEr anD taxrEturnformInpDfformat

34


vII. InComE tax rEturn form wIth amEnDED yEar ofassEssmEnt

1.0 The Inland Revenue Board (IRB) had reported that they have received a number of income tax return forms of which the year of assessment was amended.

2.0 The IRB had advised that correct forms are to be used and no changes should be made to the year of assessment when members filed in the income tax return form. Exception would only be given for those cases which require tax clearance certificate where the income tax return form is not available yet.

MICPA Circular No.: TEC/042/12/2008/WIssue date : December 15, 2008

1.0 The Inland Revenue Board (IRB) has announced that the e-Filing system for forme-b2007, e-bE2007, e-m2007, e-p2007, e-p2007, e-E2007, C2007andr2007 will cease operation permanently from October 31, 2008 onwards.

2.0 Taxpayers who have yet to file their forms may do so manually and the forms can be obtained from:

(i) any LHDNM branch offices; or

(ii) LHDNM website (www.hasil.gov.my)

3.0 IRB has also announced that the e-Filing system for forme-C2008ande-r2008will cease operation temporarily from November 1, 2008 to November 9, 2008 for maintenance purposes.

MICPA Circular No.: TEC/033/10/2008/WIssue date : October 15, 2008

vIII. E-fIlIngsystEm

35


1.0 The Inland Revenue Board (IRB) has informed the Institute that they have allowed tax agents anad tax payers to download the 'borang nyata' in PDF format from the IRB website only. However, the IRB had received a number of 'borang nyata' in PDF format which do not adhere to the specifications indicated by the IRB and thus had caused difficulties and delays in the processing of the 'borang nyata'. In this regard, the IRB has reiterated that all 'borang nyata' that do not meet the specifications indicted by IRB would be rejected.

The IRB has also advised that only 'borang nyata' in PDF format which is downloaded from the IRB website is to be used.

Tax agents are encouraged to use the e-Filing or original forms when assisting their clients in submitting 'borang nyata' to the IRB.

2.0 translatIonofborangbInChInEsElanguagE

Borang B 2007, which has been translated into Chinese Language, is now available on the IRB's website at www.hasil.org.my and can only be used as a reference. The translated copy of Borang B cannot be used for filing purposes.

MICPA Circular No.: TEC/021/06/2008/WIssue date : June 16, 2008

Ix. submIssIon of borang nyata for yEar ofassEssmEnt2007InpDfformat

36


THIS PAGE IS INTENTIONALLY LEFT BLANK

DIALOGUEs wIth IRB(INLAND REVENUE BOARD)

38


1.0 AdialoguebetweentheTechnicalDepartmentofInlandRevenueBoard (IRB) and representatives of MICPA, MIA, Chartered TaxInstitute of Malaysia (formerly known as Malaysia Institute ofTaxation),MAICSA,MICCIandMATAwasheldonDecember12,2008.Theminutesofthedialogue,settingouttheissuesdiscussedandthecomments/clarificationsprovidedbytheIRBaresetoutinAnnexureIandarealsopostedontheMICPAwebsiteatwww.micpa.com.my.

MICPA Circular No.: TEC/020/04/2009/W

Issue date : April 30, 2009

I. MInutesofPostBudget2009dIalogue

Dialogue with Technical Department of Inland Revenue BoardA

39

2 • Dialogues with IRB (Inland Revenue Board)

annexureI

JoIntMeMoRanduMonPost2009BudgetIssues

ByMalaYsIanInstItuteoftaXatIon(MIt)MalaYsIanInstItuteofaCCountants(MIa)

tHeMalaYsIanInstItuteofCeRtIfIedPuBlICaCCountants(MICPa)

Content

a geneRal

B InCoMetaXatIon1. ReductioninIncometaxRatesforIndividuals(schedule1)2. RedefinitionofsmallandMediumenterprises(sMe)3. tax treatment of Bonuses and director’s fee [section 25

(2a)]4. exemptiononallowances,Benefits-in-kindandPerquisites5. acceleratedCapitalallowances(aCa)forsMes6. ResidencestatusofCivilservants[section7(1a)]7. Withholdingtax(WHt)ontechnicalfees8. taxtreatmentofCostofdismantling(schedule3,Paragraph

67C)9. extension of scope of deductible expenditure to Promote

CorporatesocialResponsibilities[section34(6)(h)]10.extensionofthedefinitionofatradeassociationtoInclude

ProfessionalBodies(section53)11.taxationofaClub,associationandsimilarInstitution(section

53a)12.taxexemptiononInterestIncome13.selfamendmentoftaxReturn(section77B)14.notificationofnonChargeability(section97a)15.Withholdingtaxonsection4(f)Income(section109f)16.advancePricingarrangement(aPa)(section138C)2017.transferPricingadjustments[section140a(1),(2)&(3)]18.thinCapitalisationRules[section140a(4)&(5)]19.donationstoapprovedInstitution20.Reinvestmentallowance(Ra)(schedule7a)21.singletiersystem22.PowerofdgIRtodirectInstalmentPaymentsforCompanies

[section107C(8a)&(8B)]23.deductiononexpensesforRecruitmentofWorker24.taxIncentivestoenhancetraininginselectedfields25.extensionofaCaonsecurityControlequipment26.ImprovementofaCaonICtequipment

40


C staMPdutY

1. stampdutyonloan,services,equipmentleaseagreementorInstrument[stampact1949,firstschedule,Item22(1)]

d otHeRteCHnICalIssues1. taxtreatmentofunabsorbedlossesandCapitalallowances2. PermittedexpensesofInvestmentHoldingCompany(IHC)3. RentalIncomeofIHC4. PublicRulingno.2/2008Reinvestmentallowance5. gazettingofPriorYearsBudgetProposals

41


a. geneRal

1. TheInstituteswouldliketoenquireastotheexpectedtimeframewhen the gazette orders/guidelines relating to the 2009 budgetproposals and the amendments to the following Public Rulings/guidelineswouldbeissued:

GazetteOrdersrelatingto

• Review of the tax treatment for perquisites provided toemployees

• Tax exemption on income of corporate advisors on theissuanceandtradingofSukuk

• EnhancingtaxincentivesforhotelsinSabahandSarawak• Taxincentivestoenhancetraininginselectedfields• Stimulatingthedevelopmentoftheventurecapitalindustry• Tax incentives for listing of foreign companies and foreign

productsonBursaMalaysia

PublicRulings

o No.2/2008:ReinvestmentAllowanceo No.1/2008:SpecialAllowancesforSmallValueAssetso No.1/2006:PerquisitesfromEmploymento No.6/2005:TradeAssociationo No.4/2005:WithholdingTaxonSpecialClassesofIncomeso No.2/2004:Benefits-in-kindo No.2/2002:AllowablePre-operationalandPre-commencement

ofBusinessExpensesforCompanies

Guidelines

- GuidelinesonAdvancedPricingArrangement- GuidelinesonThinCapitalisation- TransferPricingGuidelines- Guidelines on the Types of Treatment/Medicines Eligible For

ExemptMedicalBenefits- Guideline on the Expenditure Eligible for Deduction Under

Section34(6)(h).- Guidelines on Section 4(f) Income Subjected to Withholding

TaxunderSection109F

AnswerbyIRBM:

AsperappendixA

42


B. InCoMetaXatIon

1. ReductioninIncometaxRatesforIndividuals(schedule1)

The Institutes welcome the proposal for the reduction of thetax rates for individuals (both resident and nonresident) andco-operatives.

Inviewoftheaboveproposal,thecurrentschedulartaxdeduction(STD)tableneedstoberevisedaccordinglybasedontheproposedincome tax rates for the tax deductions in 2009. The Institutesunderstandthat the revisedSTDtablewouldbegazettedby theendoftheyear.

TheSTDdeductionismerelya'payasyourearn'systeminorderto ensure timely payments of estimated income tax liability byindividualtaxpayers.Thebalanceisinvariablytobesettleduponreturnsbeingfiled.TofacilitateandsimplifytheSTDcompliance,theInstitutesareoftheopinionthatcalculationsshouldbemadeas simple as possible and complicated calculations should beavoided.

Although STD rules have been improved over the years, theneed to apply STD on all cash remuneration, particularly thosewhich are not fixed in nature e.g. bonus; compensation for lossof employment and other forms of perquisites which are notpaid monthly creates a heavy administrative burdens to theemployers.

TheInstitutesareoftheopinionthatitwouldbehelpfuliffirstly,STDsareappliedpurelyonfixedmonthlycashremunerationandsecondly, to find a simpler way of effecting STDs for non fixedpayments.

AnswerbyIRBM:

TheIRBMhasamendedtheSTDtableduetotheamendmentsofthelawandthedraftiswiththeAttorneyGeneraltobegazettedand to be effective by 1 January 2009. If it has not yet beengazetted, the old table will be applicable. The IRBM has beentryingtoimprovetheSTDsystemtoensurethatestimatedtaxisalmost the sameas theactual taxpaid.Previously, theproposalpaper has been discussed with all the professional bodies andMEF(MalaysiaEmployersFederation).

In the implementing of the new STD rules, IRBM will ensureeducationprogrammesandpublicitywillbeheldtomakeiteasier

43


foremployerstobeawareandunderstandthechangesmade.Forthispurpose,IRBMhasstartedgivingtalkstoallIRBMbranchesregarding the implementation of the new STD system. Talks toemployers such as banks, big employers, Accountant GeneralDepartment and software provider have been held. Positive feedbackshavebeenreceivedfromtheseemployers.

2. Re-definitionofsmallandMediumenterprises(sMe)

The definition of an SME has been restricted to exclude thosecompaniesheldbyorowninganinvestmentinacompanywithapaid-upordinarysharecapitalofmorethanRM2.5million.

(i) applicationofthelaw

In respect of the eligibility for exemption from furnishingtax estimates under Section 107C(4A), the re-definitionwilltakeeffectfromYA2010.Forthepurposesofapplyingthe preferential tax rate under Schedule 1, Paragraph 2A,the re-definition takes effect from YA 2009. Similarly, forthe purpose of claiming small assets allowances, the re-definition takes effect from 2009. For the purposes ofapplyingIncomeTax(AcceleratedCapitalAllowance)(Plantand Machinery) Rules 2008, the re-definition shall haveeffectfromYA2009to2012.

TheInstitutesareoftheopinionthattherelevanteffectivedates should be streamlined so as to avoid the unduecomplicationnowarises.

AnswerbyIRBM:

Thedifferenteffectivedate is togivemorebenefits to thetax payers. The government’s intention is to help SMEsto improve cash flow and competitiveness in view of therising cost of doing business. As such, the governmenthas proposed accelerated capital allowances for plant &machinerypurchasedbySMEsfromYA2009toYA2012asanadditionaltaxincentive.

Section 107C(4A) takes effect from YA 2010 - to givedue consideration to companies which have commencedtheir operations in 2008 and have began their YA 2009to continue enjoying the preferential tax treatment of notfurnishingestimatesandmakinginstallmentpaymentsforthefirsttwoyearsofassessment.

Inviewoftheabove,therelevanteffectivedatescannotbestreamlinedtoYA2009assuggestedbytheInstitutes.

44


(ii) exemption from furnishing tax estimates undersection107C(4a)

Undercurrentlegislation,SMEsarenotrequiredtofurnishany estimated tax payable or make installment paymentsfor2yearsunderSection107C(4A)oftheIncomeTaxAct1967(theAct).There-definitionofaSMEtakeseffectfromYA2010andsubsequentyears.

ForthoseSMEswhichcommenceoperationsinYA2009andwhichareexcluded inYA2010 following the re-definition,dotheystillenjoythetwo(2)yearwaiver(i.e.forYA2009&2010)oronlyoneyear(i.e.YA2009)?Whenshouldtheystartfurnishingtaxestimatesandmakinginstalmentpayments?

WhereanSMEcommencesbusinessonsay1May2009andin 30 November 2009 is taken over by another companywithordinarypaid-upsharecapital, sayRM50millionandtheholdingaccountingyearendissay30March2010,willthetaxpayer,beingdisqualifiedasSMEafter30November2009,penalisedfornoncompliancetofurnishestimatetaxpayableunderSection107C(4)?

TheInstitutesareoftheviewthatoncetheSMEiseligiblein YA 2009 for waiver under Section 107C(4A), it shouldcontinued intoYA2010,even though itmayhavebecomeeligiblebythenewdefinition.

AnswerbyIRBM:

Thecompanyconcernedwouldstillenjoy the twoyearsofwaiver and would start furnishing estimates and makinginstallment payments under subsection 107C(2) & (3)of the ITA on the third year just like any other existingcompanies (i.e for examples 1 and 2 above, the waiveryearswouldbeYA2009 to2010andYA2010 to2011respectively).Thecompanywouldnotbepenalizedfornon-compliance.

(iii) Preferential tax Rate under schedule 1, Paragraph2a

ItisnotclearwhethertheconditionslaiddowninParagraph2B refers to shareholding structure of the company at thebeginningofthebasisperiodofayearofassessmentorattheendofthebasisperiodofayearofassessment,orevenanypointintimeduringthebasisperiod.ItisenvisagedthattherecouldbeasituationwhereanSMEisboughtoverbyan investor company during the first year of commencingoperations and now loses its privilege under Schedule 1,

45


Paragraph2AoftheAct.

Forexample,aSME isacquiredbya relatedCompanyon1June2009.Thebasisperiodforyearofassessment2009fortheSMEis1January2009to31December2009.Whenwould the SME cease to be considered as a SME for thepurposeofSchedule1,Paragraph2AoftheAct?

TheInstitutesareoftheopinionthatthelawshouldapplyprogressively.TheInstitutesproposethatifthefirstdayofthebasisperiodofacompanyfallsbefore29August2008,theexistingruleshallapply(i.e.thenewdefinitionofSMEshallnotapply).

AnswerbyIRBM:

The status ofSME is determined at the beginning of thebasisperiodforayearofassessment.

FortheexampleillustratedbytheInstitutes,theSMEwouldceaseitsprivilegeon1January2010.

(iv) ReviewofRestrictionongroupReliefundersection44a(2)(ii)oftheact

Since the new SME definition would exclude manycompanies, it is the Institutes view that Section 44A(2)(ii)of the Act should be amended and such a company beallowed to claim group relief, even though their paid-upsharecapital in respectofordinaryshare isRM2.5millionorbelowatthebeginningofthebasisperiodforthatyearofassessment.

AnswerbyIRBM:

Forthepurposeofgrouprelief,thesurrenderingcompanyand the claimant companiesmusthavepaid-up capital inrespectofordinarysharesofmorethanRM2.5millionasatbeginningof thebasisperiod forayearofassessment.Thus any company that does not fulfill the condition isnotentitledtothegrouprelief. It isapolicymattertobeconsidered by MOF if paragraph 44A(2)(ii) were to beamendedassuggestedbytheInstitutes.

(v) exclusion

Thenewdefinitionof anSMEexcludesa companywheremore than 50% of its ordinary paid-up share capital isdirectly or indirectly owned by a related company or viceversa.

46


It is not clear whether the conditions laid down refers toshareholdingstructureofthecompanyatthebeginningofthebasisperiodofayearofassessmentorattheendofthebasisperiodofayearofassessment,ortoanypointintimeduringthebasisperiod.

As the exclusion is determined by direct or indirectownership, the Institutes would like to clarify how manylevels/tiers of ownership must taxpayers/tax practitionersexamine to determine the SME status, i.e. would thetaxpayers/tax practitioners need to determine ultimateownership? The Institutes are of the opinion that thiswill be difficult to do, particularly in the case of foreignownership.

AnswerbyIRBM:

Thedeterminationofdirectandindirectownershipisatthebeginningofthebasisperiodforayearofassessmentandisuptoultimateholdingcompanylevelregardlessofwhetherthe company is foreign holding company or local holdingcompany.

(vi) definitionofRelatedCompany

A related company is defined as “a company which hasa paid up capital in respect of ordinary shares of morethan twomillionand fivehundred thousand ringgitat thebeginningofthebasisperiodforaYA”.

The Institutes seek clarification as to whether this meansthat the related company must be a Malaysian company.Ifnot,whatisthepositionwherethepaidupsharecapitalinrespectofordinarysharesofaforeignrelatedcompany(sayaThailandor Indian residentcompany)whichwillberecordedinforeigncurrency?Ifitismeanttobeanamountequivalent to RM2.5 million, then the SME status of theMalaysian resident company may thus be subjected toforeignexchangefluctuations.

TheInstitutessuggestthatinsuchasituation,theauthoritiesshouldtaketheSMEstatusofthecompanyfortheYA2009andcontinuetomaintaintheSMEstatusunlessthereisasubsequentchangeinthepaid-upordinarysharecapitalofthe foreign relatedcompanyviaan increase in the issuedsharecapital.

The Instituteswould like tohighlight that theremayalsobea situationwhere thecompany isownedbya foreignentity

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whichhasnosharecapital,forexample,apartnership,inwhichcasethestatusofthecompanywouldremainunchanged.Insuchasituation,theInstituteswouldviewtheseasnotbeensubjectedtothenewdefinitionofaSME.

AnswerbyIRBM:

The related company may be a Malaysian or a foreigncompany with a paid-up capital in respect of ordinarysharesofmore thanRM2.5millionor its equivalent.TheInstitutes’suggestionthattheSMEstatusatthebeginningofthebasisperiodforYA2009toremainuntilthereisachangeinsharecapitalisnotagreed.SMEstatusineveryYAisalwaysdeterminedbyRM2.5millionatthebeginningofthebasisperiodofeachYAasillustratedbelow:

BasisperiodforCompanyAis31December.PaidupcapitalforCompanyAon1January2009isUSD0.6millionwhichisequivalenttoRM2.4million.On1June2009,thepaidupcapitalisstillUSD0.6millionbutitisequivalenttoRM2.6million.On1January2010thereisstillnochangeinpaidup capital of USD 0.6 million and it is still equivalent toRM2.6million.Inthissituation,CompanyAisSMEforYA2009eventhoughon1June2009thepaidcapitalisRM2.6million.InYA2010,CompanyAisnolongerSMEsinceon1January2010thepaidupcapitalisRM2.6million.

Partnership does not fall under the definition of “relatedcompany”.

(vii) ConfusionoverthedefinitionofsMe

The Institutes note that there is a different definition forSMEusedbyTheSmallandMediumIndustriesDevelopmentCorporation(SMIDEC)andBankNegaraMalaysia(BNM)forthe purpose of granting financial assistance. The SMIDECandBNMdefinitionisasfollow:

(a) For Manufacturing, Manufacturing Related Servicesand AgroBased Industries --- Small and MediumEnterprises are enterprises with fulltime employeesnotexceeding150;ORwithannualsalesturnoverofRM25millionandbelow.

(b) ForServices,PrimaryAgricultureand Information&Communication Technology (ICT) Sectors --- SmallandMediumEnterprisesareenterpriseswithfulltimeemployees not exceeding 50, OR with annual salesturnovernotexceedingRM5million.

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TheInstitutesareoftheopinionthatthiswillcertainlycauseconfusiontothelaybusinessmenwhentheyareeligibleforthe SME financing package but not qualified for the SMEtax incentive due to their paid-up capital structure. Thiswill in turn hinder the effort to strengthen the SME sectorin our economy. The Institutes would suggest that the taxauthorities streamline the definition in future to reduceunnecessarymisunderstandingandconfusion.

AnswerbyIRBM:

The definition is for tax purposes only. The Act does notrefer to such company as an SME but the term is usedto simplify the meaning during seminars and talks. TheActmerely states thata companywithpaid-up capital inrespectofordinarysharesofnotmorethanRM2.5millionasatbeginningofthebasisperiodforayearofassessmentisentitled toenjoy thepreferential tax treatmentas speltoutintherelevantprovisionsoftheAct.

However,MOFtakesnoteoftheissueraised.

3. tax treatment of Bonuses and director’s fee [section 25(2a)]

TheInstituteswelcomethemovethatbonusesanddirector’sfeesareassessedintheyearofreceiptasthiswillreduceadministrativeburdens.

TheInstituteswouldliketoseekconfirmationonthefollowing

(i) that “bonus” in Section 25(2A) covers bonus paid to anemployee and is not restricted to only bonus paid todirectors.

AnswerbyIRBM:

Yes. Section 25(2A) covers bonus paid to an employeeand is not restricted to only bonus paid to directors.Theintentionistocoverallemployees.

(ii) For a leaver case, an expatriate may receive his bonus inrespectofaprioryearafterheleftthecountry.Howshouldthebonusbereported?

AnswerbyIRBM:

Bonus should be reported in the year of receipt as peramendment of the Act. As far as practical aspect isconcerned,theemployerhastowithholdthemoneyuntiltheclearanceletterisissuedbyIRBM.Iftheemployerbearshistax,theclearancelettershouldbeissuedtotheemployer.

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4. exemptiononallowances,Benefits-in-kindandPerquisites

(i) disclosureinformea

The Instituteswould like toenquireas towhat shouldbedisclosed in respect of allowances, benefits-in-kind andperquisitesintheEAForm,i.e.thegrossornetamountortheprescribedvalueofbenefits?

AnswerbyIRBM:

Thenet/taxableamountinrespectofallowances,benefitinkind and perquisites should be disclosed inPartB of theEA Form. The exempted amount should be disclosed in alumpsuminPartGoftheEAForm.NotestoPartGoftheEAFormwillbeissuedtogethertoemployerstoassisttheminthecalculationoftheexemptedamountfordisclosureinPartGoftheEAForm.

TheInstituteswouldliketoconfirmthatwherefullexemptionis given, suchasmealallowance, telephonebills, etc.,nodisclosureisrequired.

AnswerbyIRBM:

AllallowancesaretobedisclosedintheEAFormirrespectiveofwhetherfullexemptionhasbeenallowed.TheexemptedallowanceswillbeaggregatedanddisclosedinPartGoftheEAForm.

(ii) Computationofschedulartaxdeductions(std)

The Institutes understand that with effect from YA 2009,subject to the agreement by the employer, an employeeis allowed to take into account all reliefs, rebates anddeductions allowed under the Act in arriving at the STD.Option is also given to employers and employees todeductSTDonbenefits-in-kindgiventoemployees.Wherethe employee wishes to deduct STD on benefits-in-kind,employermaynotobligeifheisnotwillingtodeduct.

AnswerbyIRBM:

Yes.IfemployeeoptstodeductSTDonbenefitinkind,theemployermayoptnottoagreetooblige.Insuchsituation,theemployeewillhavetosettleanydifferenceintaxesuponfilinghisreturn.

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Pendingthegazettingofthestatutoryorder,theInstituteswouldliketoconfirmthatemployersareallowedtoexcludeallexemptedallowances/perquisiteswhencalculatingSTDfortherestofthemonthsin2008.

AnswerbyIRBM:

Yes, with effect from September 2008, employers areallowedtoexcludeallexemptedallowance/perquisiteswhencalculatingSTD.

To enhance the objective of increasing the disposableincomeoftherakyat,theInstitutesareoftheopinionthattheSTDsforthecomingmonths(SeptembertoDecember2008)shouldbeallowedtobereducedbywhathavealreadybeenpaidontheexemptallowancesfromJanuarytoAugust2008.

AnswerbyIRBM:

Employers are not allowed to reduce the STD with effectfromSeptember2008by taking into account the amountthathasalreadybeenpaidontheexemptallowancesfromJanuarytoAugust2008.

(iii) PetrolCard/Petrolortravelallowancebetweenhomeandworkplace(uptoRM2,400p.a.)PetrolCard/Petrolortravelallowance/tollCardforofficialduties(uptoRM6,000p.a.)

(a) Currently an employee provided with a motorcarmaybeassessedon thebenefitofamotorcarandpetrolpursuanttotheprescribedvaluesasstatedinAppendix2ofthePublicRulingNo.2/2004.

Will the prescribed annual benefit of petrol as perAppendix2stillbeavailabletothosewhoareprovidedwithacarandfuel?Willtherebeanychangestothevalueofprescribedannualbenefits?

AnswerbyIRBM:

If an employee is provided with a motorcar and freepetrol he will be assessed on the annual prescribedbenefitofamotorcarasperAppendix2ofPR2/2004.

As for free petrol, the annual prescribed benefit ofpetrolasperAppendix2ofPR2/2004isnolongerapplicablewitheffectfromyearofassessment2008toyearofassessment2010.

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However,employerswillhavetodeterminetheactualvalue of petrol used by employee whether it is fromhometoworkplaceandviceversaorforofficialduties.

(b) Where an employer opts to deduct STD on thepetrol allowance, how should the STD on theallowancecomputed?Shouldtheexemptedamountbe apportioned evenly throughout the year or fullyalloweduntilthethresholdismet.

For example, where an employee is paid travellingallowance of RM1,000 a month would STD becalculated at RM (1,000 – 8,400/12) = RM300 amonth,ORnoSTDforthe first8months,andSTDcalculated on RM600 for the month of SeptemberandthereafteronRM1,000permonth.(Refertothetablebelow):

travellingallowance(RM)

amountexempted

BalanceforstdComputation

amountexempted

BalanceforstdComputation

Jan 1,000 1,000 0 700 300

feb 1,000 1,000 0 700 300

Mar 1,000 1,000 0 700 300

apr 1,000 1,000 0 700 300

May 1,000 1,000 0 700 300

Jun 1,000 1,000 0 700 300

July 1,000 1,000 0 700 300

aug 1,000 1,000 0 700 300

sept 1,000 400 600 700 300

oct 1,000 0 1,000 700 300

nov 1,000 0 1,000 700 300

dec 1,000 0 1,000 700 300

total 12,000 8,400 3,600 8,400 3,600

AnswerbyIRBM:

EmployerswhoopttodeductSTDshouldapportiontheexemptedamountevenlythroughouttheyear.

(c) TheInstituteswouldliketoconfirmthatnosupportingdocument is required if theclaimforexemptionontravelling allowances (both for official duties and

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to/fromhome-workplace)arebelowthethresholdsof RM6,000 and RM2,400 respectively. Where anemployeewishes toclaimdeduction formore thanRM6,000, then he may do so by maintaining thenecessarydetailsanddocumentatione.g. logbook,receipts etc of ALL the travelling expenses whichneedtobemaintainedforthepurposeofataxaudit,ifany.

AnswerbyIRBM:

Yes. IRBM confirms that no supporting documentis required if the claim for exemption is below thethresholds.

(iv) Mealallowance

Sincethereisnolimitfortheexemptionofmealallowance,the Institutes are of the view that employees are notrequiredtokeepanysupportingdocuments.TheInstituteswishtoconfirmthis.

AnswerbyIRBM:

EmployersarerequiredtodisclosemealallowancesinPartGoftheEAForm.Employeesarenotrequiredtokeepanysupportingdocumentswithregardstothismealallowance.

The Institutes would like to clarify on the tax treatmentforacompositeallowancewhichconsistsoftravellingandmealallowance.AstheexemptioniseffectivefromYA2008,thereisapracticaldifficultyinidentifyinganddeterminingtheamount foreachelementof thecompositeallowancefrom 1 January until 31 August 2008. Since there is nothreshold forexemptiononmealallowance, the Institutesareoftheopinionthatthefullcompositeallowancewillbeexempted.

AnswerbyIRBM:

Wherethereisacompositeallowancewhichconsistsofbothtravelling and meal allowance, employers are required toidentify and determine the actual value of travelling andmealallowancefortheperiodfrom1.1.2008to31.8.2008.Ifemployersfailtoidentifyanddeterminetheactualvalueoftheseallowances,itwouldbedifficulttoascertainwhetherthethresholdfortravellingexemptionhasbeenreached.

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(v) Childcare allowance or subsidies (up to RM2,400p.a.)

TheInstitutesseekclarificationastowhethertherewouldbeanagelimitinrespectofthechild.Inaddition,wouldtherebeanyconditionsonthetypesofchildcareprovided?Istheexemption allowable for payment to a childcare centre orpaymenttoanypersontakingcareofthechild?Isemployingamaidtotakecareofthechildalsoeligible?

AnswerbyIRBM:

• The age limit in respect of child for this purpose ofclaiming exemption of childcare allowance or subsidiesprovidedbyemployeris12yearsoldandbelow.

• There are no conditions on the types of childcareprovided.Aslongasthechildis12yearsorbelow,thechildcareallowanceorsubsidyprovidedbytheemployerisexempted.

• Anemployeemayclaimanexemptionon thechildcareallowance or subsidy provided by the employer if thechildis12yearsoldorbelowandthepaymentismadeto a childcare centre or any person taking care of thechildincludingamaid.

• Incaseswherehusbandandwifebothreceivechildcareallowances and they have only one eligible child, bothhusband and wife can still claim child care allowanceexemptionofRM2,400perannumeach.

(vi) telephone/MobilePhone,telephoneBills,Pager,PdaandInternetsubscription

The Institutes understand that this applies to both thehardwareaswellasthetelephonebills.Doestheexemptionontelephonebillsextendtotelephoneallowance?Willtheexemption extend to related charges such as registrationandaccessfee,etc.?

TheInstituteswouldalsoliketoconfirmthattelephonebillsand internet subscribed in thenameof theemployeewillalsoenjoytheexemption.

AnswerbyIRBM:

• Exemption is allowed to both hardware (personal dataassistant,telephone,mobilephone,pager)andtelephonebills only. Telephone allowance is not exempted fromtax.

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• Relatedchargessuchasregistration&accessfeeisalsoexemptedfromtax.

• Telephonebillsandinternetsubscribedinthenameoftheemployeewillalsoenjoytheexemption.

(vii) employers’ own goods Provided free of Charge oratadiscountWheretheValueofdiscountdoesnotexceedRM1,000p.a.

TheInstitutewouldliketoconfirmthatwherethediscountexceedsRM1,000,onlytheexcesswillbeliabletotax.Doestheexemptionapplytogoodsreceivedfreeofchargeoratadiscountfromrelatedcompaniesinagroup?

AnswerbyIRBM:

• DiscountonemployersowngoodswhichexceedsRM1,000p.aistaxable.

• The exemption does not apply to goods provided byrelated companies. For this purpose, the meaning ofemployerdoesnotextendtogroupofcompanies.ItwillbeaddressedinthePublicRuling.

(viii) servicesProvidedfreeofChargeoratadiscount

TheInstituteswouldliketoconfirmwhethertheexemptionappliestoservicesprovidedfreeofchargeoratadiscountfromrelatedcompaniesinagroup?Doesexemptionincludeservicesenjoyedbythestaffaswellastheimmediatefamilymembers?

AnswerbyIRBM:

Theexemptiondoesnotapplytoservicesprovidedbyrelatedcompanies.Forthispurpose,themeaningofemployerdoesnotextendtogroupofcompanies.

Exemption includes services enjoyed by the spouse orunmarriedchildoftheemployee.Theagelimitofunmarriedchildisthesameasprovidedundersection48oftheITA.

(ix) Interest subsidies on loans up to RM300,000 forHousing,PassengerMotorVehiclesandeducation.

a. TheInstituteswouldliketoenquirewhethertheexemptionincludesapersonalloantakenbyanemployeefromthebankandtheemployersubsidises the interestpaidbywayofreimbursingtheemployeeORmusttheloansbetakenthroughtheemployer?

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AnswerbyIRBM:

The IRB confirm that the exemption includes a loanpersonally taken by an employee from the bank andthe employer subsidises the interest paid by way ofreimbursingtheemployee.

b. The Institutes would like to confirm that where anemployerborrowsfromabankandprovidesaninterestfree loantohisemployee, the interest incurredby theemployer on the free loan will also be considered asa subsidy on interest on loan and will enjoy the taxexemption

AnswerbyIRBM:

TheIRBconfirmthatwhereanemployerborrowsfromabankandprovidesaninterestfreeloantohisemployee,the interest incurredby the employer on the free loanwillalsobeconsideredasasubsidyoninterestonloanand the employee will enjoy the tax exemption on thesubsidy.

c. In addition, would any conditions be imposed onthe loans, e.g. only for the first residential house, forpassengersalooncar,etc.?

AnswerbyIRBM:

Thereisnoconditionimposedonloanforaresidentialhouse.However,aloanforacarisrestrictedtovehicleforpersonaluseandnotvehicleforcommercialuse.

d. How does one determine the amount of loans? Is itbasedontheoriginalloanamountoroutstandingloanbalance inanyoneyear? If the loanstakenweremorethan RM300,000 but part of them have been repaidand the total of outstanding loans is now (YA 2008)belowRM300,000,wouldthefullinterestsubsidystillbeexemptedoraportionofitwillbeexempted?

AnswerbyIRBM:

Theamountofloanisprincipalamount.

The loanamount isbasedontheoriginal loanamountand the outstanding loan balance in any one year.The interest exemption in thebasis year for ayear ofassessmentiscalculatedusingthefollowingformula:

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Interestpaidbyemployer

X BalanceofloansumorRM300,000whicheverislower

originalloansumtaken

example:

Year Originalloanamount

[email protected]


Calculationofinterestexemption

2008 350,000 290,000 10,000 10,000× 290,000

350,000

=8,285

Year [email protected]

[email protected]



2009 290,000 240,000 10,000 10,000× 240,000

350,000

=6,857

Year [email protected]

[email protected]



2010 240,000 190,000 10,000 10,000× 190,000

350,000

=5,428

e. Is the loan for education restricted to the employee’seducationonlyorwoulditcovertheloansforchildren’seducation?

AnswerbyIRBM:

The loan for education is restricted to the employee’seducationonly.

f. WheretheloansexceedRM300,000,willthefullinterestsubsidy be brought to tax or will only the interestsubsidyontheexcessportionoftheloanbetaxed?

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AnswerbyIRBM:

Where the loans exceed RM300,000, the interestsubsidyontheexcessportionoftheloanwillbetaxed.

(x) tax exempt Medical Benefits extended to IncludeexpensesonMaternityandtraditionalMedicines

TheInstituteswouldliketoenquireastowhetheraguidelinewillbeissuedonthetypesoftreatments/medicineseligibleforexemption.

AnswerbyIRBM:

NoguidelineswillbeissuedbuttherewillbeanamendmenttothePublicRulingNo2/2004.

(xi) non-applicationtodirectorsofControlledCompanies,soleProprietorsandPartnerships.

Section2oftheActdefinesservicedirectoras“adirector,notbeingapersontowhom,togetherwithhisassociateswithin the meaning of Section 139(7), if any, there wouldbe distributed, on the distribution of a dividend by thecompany,morethan5%ofthedividend)whoisemployedintheserviceofthecompanyinamanagerialortechnicalcapacity, and is not, either on his own and with anyassociateorassociateswithinthatmeaning,thebeneficialownerof (orabledirectlyorthroughthemediumofothercompaniesorbyanyotherindirectmeanstocontrol)morethan5%oftheordinarysharecapitalofthecompany.”

TheInstitutesareoftheviewthataservicedirectoriseligiblefor the exemptions in the same way as the employees ofa company or soleproprietorship and a partnership areeligiblefortheexemptions.

TheInstitutesareoftheopinionthatiftheintentionoftherestrictionisthepreventionofabusebythesepersonsduetotheirabilitytocontroltheentity,thenservicedirectorsoughtnottobeincludedintherestriction,eveniftheyarethedirectorofacontrolledcompany.

As for the directors of subsidiaries of a MultinationalCorporationorPublicListedCompany,thedirector is justa representative of the holding company and is liable tothe supervision of holding company. The factor of abusewillnotariseasthesepeopleareaccountabletothepublic(shareholders) and the parent company. The Institutestherefore suggest that there should be no restriction forthesecategoriesofdirectors.

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AnswerbyIRBM:

Yes, service director is eligible for the exemption. Theexemption is not applicable to director/employee who hascontrolovertheemployer,partnerofapartnershipandtheownerofasoleproprietorship.

5. acceleratedCapitalallowance(aCa)forsMes

The Income Tax (Accelerated Capital Allowance) (Plant andMachinery)Rules2008[P.U.(A)No.357/2008]weregazettedon25September2008togiveeffecttothe2009BudgetproposalthatACAonexpensesincurredonplantandmachineryinYAs2009and2010willbegiventoaSMEintheyearofassessmentinwhichtheassetisfullyacquired.

(a) MeaningofPlantandMachinery

The Institutes assume that ALL expenditure on plant andmachineryqualifyingforSchedule3capitalallowancesareeligibleforthisACA.

AnswerbyIRBM:

Yes,allexpenditureonplantandmachinerythatqualifyforSchedule3capitalallowancesareeligibleforACA.

(b) applicationofsMedefinition

It is a good practice that the new law should applyprospectively. The Institutes therefore suggest that wherethefirstdayofthebasisperiodforYA2009foranSMEfallsbefore29August2008,thenewdefinitionofSMEshallnotapplyforYA2009.

AnswerbyIRBM:

IRBMconfirmsthatthenewdefinitionofSMEisapplicabletoallSMESforYA2009includingSMESwherethefirstdayofthebasisperiodforYA2009fallsbefore29August2008.

(c) RestrictiononassetsacquiredunderHire-Purchasearrangement

BasedonRule3oftheOrder[P.U.(A)No.357/2008],whereanassetispurchasedinYA2009undera36monthshire-purchasearrangement,thecapitalexpenditureincurredafterYA2010wouldnoteligibleforACA.This isnotconsistentwith the objective of the incentive i.e. to give financialassistancetotheSME.Thelongerperiodofhire-purchase

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termreflectstheneedforfinancialassistance.Rule3,whenreadingtogetherwithRule2(c)maybeinterpretedashire-purchaseassetsacquiredinprioryearsbutwhosepaymentterm stretches over YA 2009 and 2010 would be allowedto claim the ACA on capital expenditure incurred on theassets during YAs 2009 and 2010! Such practice will alsocomplicatethecalculationofbalancingallowances/chargesondisposalastheclaimforallowancesareatdifferentratesfordifferentYAs.

The Institutes suggest that the full capital expenditure oftheassetsacquiredinYA2009and2010shouldqualifyfortheACA.Forthoseassetsacquiredunderhire-purchaseinYA2009and/or2010,capitalexpenditureincurredafterYA2010shouldbeallowedACAwhenitisincurred.

AnswerbyIRBM:

No, only capital portion of any instalment payment forassets acquired under hire-purchase arrangement in2009and2010qualify forACA inaccordancewithpara46Sch3.ACAisonlyclaimableuptoYA2010.Capitalexpenditureincurredafter2010isnoteligibleforACA.

(d) ClawBackofaCa

Rule 6(3) of the Order stipulates claw back for a disposalmadewithin2years.

The Institutes would seek confirmation that where thereis commercial justification for the disposal, e.g. theft,obsolescence, damage, fire, etc., the claw back provisionshall not apply. In view of the high obsolescence of ICTequipment,theInstitutesareoftheopinionthatclawbackshouldnotbeimposedonICTequipment.

AnswerbyIRBM:

TheOrder stipulates clawbackwithin2years of disposal.Disposal means sold, conveyed, transferred, assigned oralienatedwithorwithoutconsideration.IRBMconfirmsthatiftherearebonafidereasonse.g.theft,obsolescence,damage,firefordisposalwithin2years,clawbackwillnotapply.

Claw back within 2 years of disposal is for all assetsincludingICTequipments.

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6. ResidencestatusofCivilservants[section7(1a)]

Anemployeeinpublicserviceandinastatutoryauthority,whoisnot in Malaysia by reason of exercising his employment outsideMalaysia or attending any course of study in any institution orprofessionalbodyoutsideMalaysiawhichisfully-sponsoredbytheemployer,shallbedeemedtobeaMalaysianresidentprovidedheisacitizen.

The Institutes would request that in the interest of equity andsimplicity, all citizens who are not in Malaysia by reason ofattendinganycourseof study (fully sponsoredby theemployer)inany institutionorprofessionalbodyoutsideMalaysia shallbedeemedtobeMalaysianresidents.

AnswerbyIRBM:

Itisapolicymatter.MOFwilltakenote.

7. Withholdingtax(WHt)ontechnicalfees

Itwasproposed that reimbursementofhotelaccommodation inMalaysia is no longer subject to WHT. This is welcomed by theInstitutes. However, due to the rigid restriction, this measureis instead going to cause more administrative burden and isextremelynarrowinitsscope.

(i) segregationofHotelexpenses

If the hotel accommodation charges are inclusive of otherincidentalcostsuchasrentaloftrainingroom,projector,etc.,wouldtheseincidentalexpensesbesubjectedtoWHT?Whathappensifthehoteldoesnotsegregatetheseexpenses?

This now requires the non-resident to provide a detailedanalysis of all reimbursements/disbursements so thathotel accommodation can be excluded. Thus causes moreadministrativeworkbothfortheresidentpayerandtheIRB.

AnswerbyIRBM:

IRBM clarifies that in order for the hotel accommodationexpense tobe excluded from thegross incomeof technicalfees, either the non-resident (payee) or a payer himselfhastoprovideadetailedanalysisorsegregateallchargesthat relates to that reimbursement/disbursements ofhotel accommodation only. It should not cause any extraadministrativeworkbothtothepayerornon-residentpayeesince nowadays all documentations are computerised anddetailscaneasilyberetrieved.

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(ii) disbursements

The proposal refers to the exclusion of reimbursement ofhotelaccommodationchargesfromwithholdingtax.

TheInstituteswouldliketoconfirmthatdisbursementsofhotelaccommodationchargesarealsoexcluded.

AnswerbyIRBM:

TheIRBMclarifiesthatdisbursementsofhotelaccommodationchargesarealsoexcludedfromwithholdingtax.

TheInstitutesareoftheopinionthatwithholdingtaxshouldnotbeimposedonALLreimbursements/disbursementsasthese are incidental costs for providing the service ratherthanfeesearnedontheservicesprovided.Reimbursements/disbursementsarenotconsiderationforservicesperse.ItisratherstrangethatonlyreimbursementsrelatingtohotelaccommodationinMalaysiaareexcludedfromwithholdingtax.

AnswerbyIRBM:

Itisapolicydecision.

The Institutes would like to confirm that pending theamendment to the Public Ruling No. 4/2005 (WithholdingTax on Special Classes of Income), the taxpayers areallowed to rely on the Budget proposal and exclude thereimbursementsrelatingtohotelaccommodationfromthecomputationofwithholdingtax.

AnswerbyIRBM:

TheIRBMconfirmsthatpendingtheamendmenttothePublicRulingNo.4/2005,andiftheamendedPublicRulingisnotbeingissuedby31December2008,thetaxpayersareallowedtorelyontheBudgetproposalandexcludethereimbursements/disbursements relating to hotel accommodation from thecomputation of withholding tax which relates to the servicesperformedonorafter1January2009.

8. taxtreatmentofCostofdismantling(schedule3Paragraph67C)

InlinewithFRS116,thedismantlingcostswillnowbeconsideredasaqualifyingexpenditureandaddedtotheresidualexpenditureoftheassetondisposalandthebalancingallowance/chargewouldthenbecomputedaccordingly.

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(i) The Institutes welcome the move. However, thecurrent treatment will involve additional administrativereconciliations.Itissuggestedinsteadofbeingrecognisedas capital expenditure qualifying for capital allowances, itwould be administratively simpler if the dismantling costsareallowedasadeductionagainstgrossincome.

AnswerbyIRBM:

Thedismantlingcostisacapitalexpenditureanddoesnotqualify for deduction against gross income under section33(1)oftheITA.

(ii) TheInstituteswouldliketoconfirmthatifthedismantlingcost is incurred after the year of cessation, the costs willdeemedtobe incurred intheyearofcessation. Insuchacase,thetaxreturnfortheyearofcessationwouldneedtobeamended.

AnswerbyIRBM:

Yes.HoweverthetaxpayerhastoinformIRBMbyaletterthattheassethasbeendisposedofandtheIRBMwillissueaReducedAssessmentifapplicable.ThetaxpayerneednotsubmitanamendedReturn.

(iii) Theproposedtaxtreatmentisveryrestrictive.Itisavailableonlytoapersonwhoisrequiredbyanylaworagreementtodismantleandremoveassetsaswellasrestorethesite.Itappearsthatifthefactoryisownedbythetaxpayerandthereisnoneedinlawtodismantleassetandrestorethesite,thetreatmentisnotapplicable.

AnswerbyIRBM:

Yes, the proposed provision is related to dismantling ofplant & machinery that is required by law/agreement todismantleandremovedtheplant&machinerybecausetheplant&machineryconcernedcannotbeusedanymore.

(iv) Further,sincetheobligationtorestorethesiteisrequiredbywrittenlaworagreement,itcreatesanaccruedliability.Anaccrued liability is incurredwhentheobligationtopayis established, i.e. at the beginning of the agreement. Itfollows that the cost of dismantling should be includedascostofacquisitionof theassetandcapitalallowancesclaimedaccordingly.

AnswerbyIRBM:

The cost of decommissioning at the beginning of theagreementisnotascertainedyetandismerelyaprovision.Thustheamountdoesnotqualifyforcapitalallowances.

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(v) Paragraph67C(3)oftheActstipulatesthatifthedismantledasset is subsequently used for any other business, thistreatmentshallnotapply.

The Institutes would like to have further clarification onthe interpretation of Paragraph 67C(3). Where an asset isdismantled and used to trade in for a new asset, wouldthedismantledassetbedeemednot inuse foranyotherbusinessandthecostofdismantlingbeeligibletobeaddedtotheresidualexpenditure?

AnswerbyIRBM:

Thetreatmentdoesnotapplytotrade-incases.Thusitisnoteligibleforcapitalallowances.Pleasereferto(iii).

9. extension of scope of deductible expenditure to PromoteCorporatesocialResponsibilities[section34(6)(h)]

Witheffectfromyearofassessment2009,expenditureincurredbythe taxpayer on “conservation and preservation of environment(and)enhancementofincomeofthepoor”aredeductibleagainstgross income.UnderSection34(6)(h)of theAct,expenditureonsuchprojectsmustbeapprovedbytheMinister.

(i) Foracompanyhavinganearlyyear-end,YA2009wouldhavealready commenced. Will the Minister grant retrospectiveapprovalforsuchcasesandwillthesebeacceptedbyIRB?

AnswerbyIRBM:

Ministry of Finance (MOF) confirms that the approval isalsoapplicable to theexpenses incurredbefore thebudgetdaywhichfallsinYA2009.IRBMconfirmsthatasfarasIRBMisconcerned,thoseexpensesthatareapprovedbytheMOFareeligiblefordeduction.

(ii) Forthepurposeoftransparencyandclarity,the Institutessuggest that the authority issue a guideline in respect ofexamples of the various types of expenditure that will beeligible.

AnswerbyIRBM:

TheguidelinethathasbeenissuedbyMinistryofFinance(MOF)willbeupdated.

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10. extensionofthedefinitionofatradeassociationtoincludeProfessionalbodies(section53)

WitheffectfromYA2009,professionalbodieswillbeconsideredastradeassociations.

The Institutes are of the view that a trade association and aprofessionalbodyaretwodifferentkindofentities.Unlikeatradeassociation,membersofaprofessionalbody includeacademics,practitionersandprofessionalsunderemployment.Notallofthemarecarryingonabusiness,whichisthemainattributeofatradeassociation.

Themainobjectiveofaprofessionalbodyisinvariablytoadvancethe interest of the profession. It regulates and promotes theprofessionforthebenefitoftheprofessionandthesociety.

Aprofessionalbodymay sponsorandconduct related research,and occasionally advises the government authority on thedevelopmentoftheprofession.Ontopofthat,theyarenon-profitmaking bodies and do not conduct business to earn profits ordistributegainstomembers.

Theactivitiesofaprofessionalbodygenerally revolvearound itsmembers. It collects subscription from members to fund theiractivitieswhicharemainlyeducational,e.g.conductingcontinuingprofessional education programmes, publishing professionaljournals, sponsoring research, etc, or social events, e.g. annualdinners,sports functions,etc.Non-membersparticipation in thecontinuingprofessionaleducationprogrammesisincidentaltotheactivitiesprovidedtothemembersandtheparticipationisallowedto advance the interest of the profession as well as to provideknowledgeondevelopmentsintherelevantfield.

Fromtheabove, itcanbeseenthataprofessionalbodyismoreakin to a club whereby members help themselves by organisingtheir financial resources toadvance the interestof thebody.Assuch,aprofessionalbodyshouldbetaxedasaclubratherthanatradeassociation.Infact,itistheviewoftheInstitutesthatspecialpreferential tax treatment should be accorded to professionalbodiestoassistthemindischargingtheirobjectivestomembers,theGovernmentandthenationatlarge.

AnswerbyIRBM:

This is a policy decision and the law is very clear on that. TheInstitute is merely expressing its view which is general andsubjective.Thestatementthataprofessionalbodyismoreakintoaclubisverydisputable.Infacttherearemuchmoresimilaritiesbetweenaprofessionalbodyandatradeassociationthanwitha

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club or society that only focuses on recreational, charitable andsocialaims.Thefactthatthedefinitionofbusinessitselfincludes“profession,vocationandtrade..."showsthatthereisaverythinlinebetweenprofessionandtrade.

Before the Public Ruling 6/2005 was issued, the tax treatmentaccorded were similar for both the professional bodies and thetrade associations. However the Public Ruling 6/2005 broughtaboutabitofproblemduetothestatementthatthemembershipofthebodiescannotbeextendedtothoseexercisingemployment.

However with the budget amendments of 2009, this problem isovercomedandthesituationreturnstostatusquo.

IRBM is of the view that the extension of the definition of atrade association to include professional bodies is correct andappropriate.

11. taxation of a Club, association and similar Institutions(section53a)

Section 53A stipulates that clubs, associations and similarinstitutions should maintain a separate account in respect ofincomederivedfromitsmembersandnon-members.TheInstituteswouldsuggest thataprovisionsimilar towhatcurrentlyexists foratradeassociationshouldbeintroducedtodeemincomederivedfromnon-memberstobebusinessincomeoftheclub.

AnswerbyIRBM:

Allalongreceiptsfromnon-membershavealwaysbeentreatedasbusinessincomeoftheclubsandassociations.Thisisbasedonthecase lawdecisionofTheCarlisleandSillothGolfClubVSmithandon thedoctrineofmutuality.Theproposalby the Institutesistogoonestepfurtherbyintroducingaspecific legalprovisionregardingthesaidpractise.Theinstitutes’intentioninsuggestingthatwebelieveistoensurecertainty.TheIRBMappreciatesthesuggestionandwewillgivedueconsiderationanddecidewhetherthereisarealneedforsuchaprovisiontobeintroducedassection53Aisacleartaxingprovision.

12. taxexemptiononInterestIncome

The Income Tax (Exemption) (No. 7) Order 2008 [P.U. (A) No.351/2008]wasgazettedon25September2008togiveeffecttothe2009Budgetproposalthatwitheffectfrom30August2008,interestincomereceivedbyaresidentindividualfrommoneydepositedinapproved financial institutionswillbeexempted from income tax.TheOrderrevokepreviousincometaxexemptionorders[P.U.(A)No.64/1996,65/1996,383/1997and155/1998].

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TheInstituteswishtoclarifythefollowing:

(i) In the revoked orders, it was specifically mentioned thatinterest received from saving accounts/fixed depositaccounts/investmentaccountswereexemptedfromincometax. However, the current order only states that interestreceivedfrommoneydepositedatapprovedinstitutionsareexemptedfromincometax.

The Instituteswould like toclarifywhether theexemptionisapplicabletointerestfromalltypesofmoneydepositedwith the approved institutions, including REPO, shortterm money market, current account as well as Islamicfinancialinstrumentsandothertypesofstructuredfinancialproducts which pay interest to the depositors as well asinterestreceivedundervariousinsurancepolicies.

AnswerbyIRBM:

TheGuidelineswillbeamendedtoaddresstheissue.

(ii) Whether the exemption is on interest paid on or after 30August 2008 or interest accrued on or after 30 August2008.

Forexample,interestofsay,RM3,000ona6month(fromJuly to December 2008) fixed deposit will be paid on 31December 2008. Will the full RM3,000 be exempted oronly interestaccruedfortheperiodfrom30Augusttill31December2008,i.e.RM(124/184X3,000)=RM2,021.74beexempted?

AnswerbyIRBM:

TheIRBMconfirmsthattheexemptionisapplicabletotheinterestpaidtothedepositorsonorafter30August2008.Hence,basedontheexamplegiven,thefullRM3,000willbeexempted.

(iii) Whether the exemption would also apply to Joint Accountholders. Where the deposits are made under the businessnameofasole-proprietorshiporapartnership,willthesole-proprietorandpartnersbeexemptedontheinterest?

AnswerbyIRBM:

Thedepositswhich aremadeunder the business name ofa sole proprietorship or partnershipwill not be exempted.The exemption is only given to the deposits made underthenameofanindividualresident includingjoint-accountholdersofindividualssuchasmotherandsonorbrotherandsistereventhoughoneoftheindividualsisnon-resident.

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13. self-amendmentoftaxReturn(section77B)

TheInstitutesgenerallywelcomethemovetoallowself-amendmentofataxreturn.

(i) disincentiveforself-amendment

In practice, a voluntary declaration of error within a yearafterduedateofsubmissionofataxreturnwillattracta15%penalty under Section 113(2). However, self-amendmentof a tax return form under Section 77B stipulates that ataxpayerwouldbepenalisedforlatepaymentpenaltyof10%if self-amendment is made and additional tax paid within60 days from the due date of submission. Where the self-amendmentortaxpaymentismadeafter60daysfromdateofsubmission,thepenaltyis15.5%.Thisisadisincentiveforself-amendmentoftaxreturn.

Itisunclearastohowrevisionoftaxreturnswouldbedealtwithinsituationswheretherehavebeennoerrorsbuttheneedtorevisearisesduetoclawbackofcapitalallowances,etc.whichisoutsidethecontroloftaxpayer.

The Institutessuggest that theperiod forselfamendmentbe increased to one year rather than be confined to sixmonths.Thiswillalsoavoidtheneedtorevisethecurrentpenalty rate for voluntary disclosure after the six monthperiodwhich,upon revision,will invariablybehigher thanthe current 15%. As such, an attempt to introduce theright for a taxpayer to self-amendhis tax return (which islaudable)willnotbeseenasanattempttoactuallyincreasepenaltyratesinstead.

ThecontentionbythetaxauthoritythatithasbeendeniedtheuseoftaxrevenuethatshouldhavebeencollectedontheduedateofsubmissionisnottenableunlessanduntilacorrespondingprovisionisincorporatedintheActwhereininterestonlaterefundofthetaxoverpaidisalsointroducedasataxpayerwouldalsobedeniedtheuseofthefundsthatshouldhavebeenreceivedearlier.

AnswerbyIRBM:

Theimpositionoflatepaymentpenaltyandtimeframeforselfamendmentarepolicymatters.Anyclawbackofcapitalallowances for the YA concerned would have been knownatthetimeofsubmittingthecurrentyeartaxreturn.Selfamendmentdue to clawback shouldnotarise,bearing inmindselfamendmentisforthecurrentYAonly.

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Whether IRBM should pay interest on late refund of taxoverpaidisalsoapolicymattertobeconsideredbyMOF.

However,wheretheclawbackisnotapparentatthetimeofsubmissionoftaxreturnforexampletheclawbackisduetothedisposalofassetwithintwoyears,thetaxpayerhastoinformIRBMandadditionalassesmentwillberaisedandnopenaltybeimposed.

(ii) Commencement of Business / Change of accountingdate

The proposed legislation does not cover situations forcommencement of business where the income for a YAmay need to be revised in the following YA. An example[extracted from Example 1, Paragraph 3.5.3, Public RulingNo. 7/2001 Basis Period for Business & Non-businessSources(Companies)]isasfollow:

A company commences operations on 26.06.2001 andaccounts are made up to 30.04.2002 (>10 months), andsubsequentlyto30.04.2003.

Y/a accountingpe-riod

BasisPeriod Deadline for filing

2001 NoAccounts 26.06.2001to31.12.2001

30.11.2002

2002 26.06.2001–30.04.2002

01.01.2002to31.12.2002

30.11.2002

2003 01.05.2002–30.04.2003

01.05.2002to30.04.2003

30.11.2003

ItcanbeseenfromtheabovethatatthetimeofsubmittingthetaxreturnforYA2002,theincomeforthebasisperiodfrom01.05.2002to31.12.2002cannotbeascertaineduntilthefinalisationandauditoftheaccountsended30.04.2003.Thus,arevisedreturnhastobemadein2003totakeintoaccounttheincomefortheperiod.

Similarly, the proposed legislation does not appear toprovide for returns furnished under Section 77A(2), i.e.in the event where there is change in the company’saccounting period. For illustration, Example 2, Paragraph3.6.1,PublicRulingNo.7/2001[BasisPeriodforBusiness&Non-businessSources(Companies)]isreproducedbelow:

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A company which normally closes its accounts on 31December changes its accounting date to 31 March andprepares accounts as follows: 01.01.2001 to 31.03.2002,andsubsequentlyto31Marcheachyear.

BasedonSection77A(2),thereturnformforY/A2001-2003mustbefiledasfollows:

Y/a accountingpe-riod

BasisPeriod Deadline for filing

2001 NoAccounts 01.01.2001to31.12.2001

31.10.2002

2002 01.01.2001–31.03.2002

01.01.2002to31.12.2002

31.10.2002

2003 01.04.2002–31.03.2003

01.04.2002to31.03.2003

31.10.2003

Thetaxreturnformfortheyearofassessment2002hastobe amended in 2003 because at the time of submission,incomeforthebasisperiodfrom01.04.2002to31.12.2002cannotbeascertained.

Underboththeabovecircumstances,willtherevisionofthetaxreturnbeconsideredasaself-amendmentandsubjecttoapenalty?

AnswerbyIRBM:

Selfamendmentdoesnotcovercommencementofbusinessandchangeofaccountingdatecasesasthesecasesinvolveamendmenttoprioryears’taxcomputationandmostlikelyfalloutsidethetimeframeforselfamendment.

ThedetailexplanationoftheabovecircumstancesisasperappendixB.

(iii) CompaniesinPartnerships

Acompanyentersintoseveralpartnershipshavingdifferentyear-ends as illustrated below. Company X has a Julyyear-end whilst Partnership A has a December year-endandPartnershipBhasaMarchyear-end.TheCompany isrequiredtosubmit2revisionstoitsoriginaltaxreturn.

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YA2007:Filingdeadline-28February2008

1Aug2006 31July2007

Company YA2006:Filingdeadline- YA2007:Filingdeadline-P’shipa 30June2007 30June2008

1Jan2006 31Dec2006& 31Dec2007 1Jan2007

P’shipB YA2007:Filingdeadline- YA2008:Filingdeadline- 30June2008 30June2009

1Apr2006 31Mar2007& 31Mar2008 1Apr2007

AtthetimeofsubmittingthetaxreturnformforYA2007,i.e. 28.02.2008, Company X is unable to ascertain theincomesforpartnershipsA&B.Undersuchcircumstances,willtherevisionofthetaxreturnforYA2007byCompanyXwhentheincomesforpartnershipsAandBarefinalisedbeconsideredasself-amendmentandsubjecttopenalty?

AnswerbyIRBM:

Self-Amendment shall apply on the amendment inaccordancewithsubsection77(1)or77A(1)anddoesnotapplyonpartnershipsinceitisnotataxableperson.Currentoperational practice for partnership cases will continueto apply on the revision for finalisation on distribution ofprofit fromthepartnership.However,self-amendmentwillbe applicable for amendment on the partnership incomepertaining to omission or understatement of partnershipincome.

In a case where the amendment pertaining to theunderstatementofpartnership incomeismadebeyondthe6monthperiod,theamendmentonthepartnershipincomewillbesubjectedtopenaltyandtheamountofthepenaltyisasprovidedintheauditframework.

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(iv) extensionoftimetofiletaxReturns

Where a taxpayer has been granted extension of time tofile a tax return, either specifically or across the board(e.g.extensionoftimeupto14AugustforcompanieswithDecemberyearendtofiletaxreturns),itisassumedtheduedateasreferredtoinSection77Bwouldbemovedforwardaccordingly.

AnswerbyIRBM:

ThegrantingofextensionoftimeisnotprovidedintheITA.It ismerelyanadministrative concessiongivenby IRBM.Theduedatewouldnotbemovedforwardaccordingly.

(v) amended tax liability lower than estimated taxPaid

Where the amendment result in higher tax payable thanthe original return but LOWER than the instalments paidpursuant to Form CP204/CP204A, would a penalty stillbe imposed on the difference between the amendedassessmentandtheoriginalassessment?

Example:ACompanywithfinancialyearended31.12.2007submitted itsCP204on30.12.2006withanestimated taxpayable RM12,000. The tax instalment payments weresettledbyDecember2007.TheYA2007originaltaxreturnwasfiledon30July2008withthetaxpayableofRM5,000.SubsequentlytheCompanymadeaself-amendmentforYA2007andsubmittediton1October2008.TherevisedtaxpayableforYA2007isRM8,000

Is there any penalty for the difference in tax payablebetweentheYA2007originalreturnandtheself-amendedreturnofRM3,000,bearinginmindthatthetaxalreadypaidisRM12,000?TheInstitutesbelievethatinsuchasituation,nopenaltieswouldarise.

AnswerbyIRBM:

Theamendedreturnsubmittedbythecompanyissubjectedtopenaltyundersub-section77B(4)asaresultofadditionalassessment.Thepenaltyisbasedonthedifferencebetweenthe amended and the original assessment. The companyentitlesforarefundiftheamountpaidisexcessive.

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14. notificationofnon-Chargeability(section97a)

Theissuanceofanotificationofnon-chargeabilityiswelcomedbytheInstitutesasitprovidesanavenueforataxpayertoappealtotheSpecialCommissionersinrespectofadisputewiththeIRB.

(i) ItwasclarifiedduringtheIROUSeminarheldon3September2008 that in the event of a tax audit where there is noassessment, the letter issued to the taxpayer notifying ofthe tax audit findings and any adjustments required tothe tax computation is deemed to be the notice of non-chargeabilityundernewSection97A.

TheInstituteswishtoconfirmthatnormallyinanauditwhichdoesnotinvolvealiabilitytotax(duetolosses,etc),theIRBofficerwouldletthetaxpayerknowwhattheproposedadjustments are and obtain the taxpayer’s agreementto the audit findings. This would allow the taxpayer anopportunity to forward explanations and evidence tosupporthis arguments against theaudit adjustments thatareproposed.Ifthetwopartiescannotcometoagreementon the adjustments, then IRB may proceed to issue theNotification of non-chargeability and the taxpayer thencanconsiderwhethertoproceedtoappealtotheSpecialCommissioners.

Alternatively,theInstituteproposesthataspecificnoticebeintroducedandissuedunderthenewSection97Aandthattheletternotifyingtaxauditfindingsshallnotbedeemedtobeanotificationofnon-chargeabilityunderSection97A.

AnswerbyIRBM:

The IRBMconfirms that therewill bea standard formofnotification of non-chargeability for both audit and non-auditcases.

(ii) Section97A(1)statesthattheDGmayissuethenotificationofnonchargeabilitytogetherwiththetaxcomputationwithregard to it. The Instituteswish toseekclarificationas towhetherthenotificationwillbeissuedinallrelevantcasesorwhetherataxpayerwouldneedtorequestthatthe IRBissuessuchanotification.

AnswerbyIRBM:

Notification of non-chargeability will be issued on bothaudit and non-audit cases. All audit cases will be issuedwithanotificationofnon-chargeabilityuponcompletionof

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audit.However, fornon-auditcases itwillbe issueduponrequestbythetaxpayertotheIRBMbranches,forexampleincaseswhereataxpayerisnotliabletotaxandyethasto comply with public rulings or stand taken by IRBM.This is to enable him to make an appeal to the SpecialCommissionerofIncomeTax(SCIT).

15. Withholdingtaxonsection4(f)Income(section109f)

With effect from 1 January 2009, new Sections 6(1)(k), 15B and109Fwillbeintroducedtowidenthetaxnetasitappliestonon-residentinrespectofgainsorprofitsunderSection4(f).

TheInstituteswouldliketoseekclarificationsonthefollowing:

(i) natureofReceipts

ItisclearthatwhetherapaymentisagainorprofitunderSection 4(f) or business income depends on the facts ofthe case. Generally it is determined in the context of therecipient’sactivitiesasawhole.Itisthereforeverydifficultfor a Malaysian payer to determine whether the paymentto a non-resident recipient is income under section 4(f)or business income. For example, a commission paymentmayseemtobeaSection4(f) income,but itmayalsobebusinessincomeiftherecipientisalsocarryingonbusinessas a commission agent. Subjecting such a payment to awithholdingtaxwhenitisactuallybusinessincomeofanon-resident(whodoesnothaveapermanentestablishmentinMalaysia) will result in trade disputes and tax disputes.Furthermore, if thenon-resident is a residentof adoubletaxation treaty partner, a more serious problem mightoccurasdifferenttypesofincomearetreateddifferentlyinvariousdoubletaxationagreements.

AnswerbyIRBM:

TheIRBMconfirmsthatforthepurposeofthissectionthepayerorthenon-residentrecipienthimselfhastodeterminewhether thereceiptsare incomeunder thissection4(f)orbusiness income. As guidance, it would be necessary todeterminethat:

°thepaymentisincomeandnotcapitalinnature:°thepaymentisforanyjoborarrangementmade;°the payment is not income that falls under paragraph

4(a)to(e)andsection4A,ITA;°thepaymentisoften“oneoff”innature.

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If the non-resident recipient can verify that the paymentreceived in relation to the job/arrangement made is inrelationtoitsincomefromcarryingonofabusinesswhetherthebusinessoperationiscarriedoninoroutsideMalaysia,then thatpayment shouldnotbe subjected towithholdingtaxunderthisparagraph4(f),ITA.IRBMwillnotspecifythetypesofsupportingdocumentasitissubjecttocasetocasebasis.

ForthepurposeofDTA,incomeunderthisparagraphwillbe dealt with under the “Other Income” Article. As thewordingsineachDTAmayvary,referencehastobemadetotherelevantDTAwhennecessary.

(ii) overlappingofsection4(f)withothersectionsoftheIncometaxact

There is a potential overlap among Section 4(a), Section 4(f)andSection4A.TheInstituteswouldliketoclarifythatSection4(f)willonlybeinvokedafterSection4(a)to(e)andSection4Aareconsideredandthatinthecaseofabusinesssource,thepayerwillberequiredtoestablishifthenon-residentisactuallyreceivingthepaymentaspartofitsbusinessoperationscarriedonwhetherinoroutsideMalaysia,inwhichcase,nowithholdingtaxwouldapplyunderSection109F.

AnswerbyIRBM:

The IRBM confirms that there is no overlapping amongparagraphs4(a),section4(f)andsection4A.Section4(f)will onlybe invokedafterSection4(a) to (e)andSection4AareconsideredandthedetailswillbeaddressedinthePublicRuling.

(iii) BasisofWithholding

UnlikeSection4Aincome,Section4(f)referstogainsorprofitsnot fallingunderSection4(a) to (e). Section109F stipulateswithholdingthetaxonapaymenttoanon-residentinrelationtoanygainsorprofits.TheInstitutesareoftheopinionthatitwouldnotberightifthewithholdingtaxisdeductedbasedonthegrosspaymentsincetheActonlyprovidesforwithholdingtaxongainsorprofits.Thepayerhoweverisnotlikelytoknowthecostsoftherecipient.

Theoretically, thenonresidentshould filea tax returnandclaim the amount of tax over deducted. In practice, thenon-residentwillnotbother to file the tax returnand the

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localpayerhastobeartheexcessivetax.

TheInstitutesareoftheviewthatdetailedguidelinesshouldbe issued, indicatingthetypesof incomeenvisaged, rulesfordeterminationwhetherapaymentissubjectedtoWHTand the types of documentation required, etc. so thattaxpayerscaneasilycomplywiththeprovisions.

AnswerbyIRBM:

Withholdingtaxonapaymenttoanon-residentinrelationtoanygain/profitunderparagraph4(f)isatgrossandthedetailswillbeaddressedinthePublicRuling.

(iv) Incomeexcludedfromsection4a

Public Ruling No. 4/2005 (Withholding Taxes on SpecialClassesof Income)has specificallyexcluded the followingpaymentsmadetononresidents:

(a) commissionpaidtonon-residentgeneralcommissionagentfordealstransactedoverseas;

(b) guarantee fees connected with any loan orindebtedness,orcommissionforletterofcredit;

(c) deposit paid on signing of a technical servicesagreementwhich is refundableuponcompletionoftheservice;(d)testingservicesfortheprovisionoftest results on finished products to meet requiredstandardswhichdonot involve technical adviceorconsultation.

With the extension of Section 4(f), it appears that thesepayments may be brought into the WHT net again. TheInstituteswouldreiteratethatsuchitemsmentionedaboveshouldnotbesubjecttoWHTunderSection4(f).

AnswerbyIRBM:

The IRBM clarifies that those payments made to non-residents which are excluded in the Public Ruling No.4/2005isforthepurposeofclarifyingthatsuchpaymentswill not fall as special class of income for the purpose ofsection4A.

However, with the introduction of this new provision,the IRBM confirms that those payments now fall underparagraph4(f)andsubjecttowithholdingtaxundersection109Fifsuchpaymentsdonotfallsunderparagraph4(a)-4(e).

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(v) servicesPerformedoutsideMalaysia

Public Ruling No. 4/2005 (Withholding Taxes on SpecialClasses of Income) also specifically excludes paymentmade to non-residents for management, marketing andlegal services from Section 4A income on condition thattheservicesareperformedoutsideMalaysia,even thoughtheresponsibilityforpaymentlieswithaMalaysianresidentandthepaymentischargedasanoutgoingintheaccountsofabusinesscarriedoninMalaysia.

Basedonthesamerationale,theInstituteswouldsuggestthat payments in relation to services performed outsideMalaysia should also not be subjected to WHT underSection109F.

AnswerbyIRBM:

The IRBM clarifies that under this new proposal, incomeunderparagraph4(f)receivedbyanon-residentisdeemedto derived from Malaysia irrespective of whether theservices/job/arrangement are performed outside Malaysiaand subject to withholding tax under section 109F. TheissuewillbeaddressedfurtherinthePublicRuling.

(vi) treatmentofdisbursementsandReimbursements

TheInstitutesseekclarificationastowhetherdisbursementsand reimbursements are considered as Section 4(f) gainsandprofitsandsubjectedtoWHTunderSection109(F).

AnswerbyIRBM:

TheIRBMconfirmsthatdisbursementsandreimbursementsareconsideredassection4(f)gainsandprofitandsubjecttowithholdingtax.MOFalsoconfirmsthatnoexemptionisgivenfordisbursementsandreimbursementthatrelatestohotelaccommodationundersection4(f).

(vii) Payment to Permanent establishment (Pe) inMalaysia

Where amounts, including commissions, arrangement fee,guaranteefee,etc.arepaidtoaPEinMalaysia, isthepayerrequiredtowithholdthetax?TheInstitutesholdtheviewthatthis would not be the case as such a payment constitutesbusinessincomeinsteadofSection4(f)gainsorprofits.

AnswerbyIRBM:

TheIRBMclarifiesthatitdependsonthefactofeachcase.If the payment to PE is a business income under section4(a)ITA,thensuchpaymentisnotsubjecttowithholdingtaxunderthissection109F.

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(viii) applicationofdta

TheInstituteswouldliketoseekconfirmationfromtheIRBthatwheretheDTAprovidesthattherighttotaxunderthe“OtherIncome”Articlerestswiththecountryofresidenceofthenon-resident,thentheWHTwouldnotapplytothenon-residentperson.

AnswerbyIRBM:

Ifthesection4(f)incomefallsunderthescopeofthe“OtherIncome” Article of a DTA, and the said article providesforexclusiverightstothecountryofresidenceofthenon-resident, the withholding tax under section 109F is notapplicable.TobeeligiblefortheexemptionprovidedintheDTA,a letter from theRevenueAuthority of the relevantcountryconfirmingresidentstatusshouldbeobtained.

(ix) applicationofthelaw

TheInstituteswouldliketoseekclarificationastowhethertheeffectivedatereferstothedateofperformanceoftheserviceorthedateofpayment. Iftheeffectivedatereferstothedateofpayment,itwouldconstitutearetrospectiveapplication of the law because when the party enteredinto the transaction, no one was aware of the impendingchanges!

AnswerbyIRBM:

Inprinciple, for thepurpose ofwithholding tax on incomefallingunderparagraph4(f),theeffectivedateforderivationofsuchincomeiswhentheliabilitytomakepaymentarises.ThisissuewillbeaddressedinthePublicRulingandampleexampleswillbeshownforclarification.

TheInstitutesareoftheviewthatdetailedguidelinesshouldbeissuedsothattaxpayerscaneasilydeterminewhetherapaymentissubjecttoWHTandthetypesofdocumentationrequired for tax audit. The Institutes understand that apublicrulingwillbeissuedonthenewWHTandhopesthattherewouldbeadequatetimeprovidedtotheprofessiontoprovideitsviewsonthedraftpublicrulingsothatthenewprovisionwillbesimpleandtakesintoaccountallpracticalmattersandissues.

AnswerbyIRBM:

TheIRBMis inthemidstofpreparingthePRandIRBMwilltrytotakenoteallpracticalmatters.

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16. advancePricingarrangement(aPa)(section138C)

(i) Section138Cisapplicableto“anypersonwhocarriesouta cross border transaction with an associated person”.The Institutes suggest that this facility should also makeavailabletolocalresidentgroupsofcompaniesaswell.

(ii) As the APA is being introduced in Malaysia in 2009, theconcerniswhetherIRBwillseektoadjustprioryearpricesupontaxpayersapplying foranAPA?The Instituteswouldlike to confirm that the tax authoritieswouldnot seek toadjust prior year prices in any APA negotiations and nopenaltywillbeimposed.

(iii) Ifnoagreement is reachedwith the IRB,will this triggerataxaudit?WilltheinformationprovidedforanAPAbeusedsolelyforthepurposeofthatparticularAPA?TheInstitutesare of the opinion that this should not be the case andwouldliketoseekIRBconfirmation.

The Institutes wish to point out that unlike Malaysia, an APA inmost other countries are negotiated and agreed upon betweentaxpayer and the Ministry of Finance (the competent authorityunder double tax treaties) while the enforcement is carried outby agencies such as the IRB. The Institutes are concerned withthe possible conflict of interest where the IRB is empowered tonegotiate an APA and to enforce income tax law. The Instituteswould suggest that a specific team be set up and entrustedwith the responsibilitiesofAPAnegotiationandmembersof theteam shall not be involved in Transfer Pricing audits, tax auditsand investigation. There should not be a sharing of informationprovided during an APA as confidential information would bedivulgedduringthenegotiations.InformationprovidedforanAPAshouldbeusedsolelyforthatpurposeonly.

In view of the significant implications on the implementation ofan APA, the Institutes would like to enquire when the relevantguidelines can be issued. The Institutes hope that the authoritycouldallowtheprofessionalbodiestopresenttheirfeedbackonthedraftguidelinesbeforethesearefinalised.

AnswerbyIRBM:

TheissueistobediscussedseparatelyintheconsultationmeetingconductedbyMOFandwillbeaddressedintheRules/Guidelines.

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17. transferPricingadjustments[section140a(1),(2)&(3)]

(i) The Institutes seek confirmation that compensatingadjustments will be given for onshore transfer pricingadjustments.

(ii) The Institutes wish to seek clarification as to the scopeoftheterm“acquisitionorsupplyofpropertyorservices”as well as to the definition of the terms ‘property’ and‘services’.

(iii) The Institutes would like to seek clarification on thetreatment of interest free loans and advances betweencompaniesinviewoftheintroductionofthenewprovisionsinthelaw.

InviewofarecentlyreportedmatterwheretheIRBimputedinterest income on all interest free loans provided by acompany,theInstituteswouldliketoenquirewhythereisadeparturefromthepastpracticeofacceptinginterestfreeloans?

The institutes are of the view that there are genuinecommercial reasons for not charging interest particularlyamong companies of a group. This departure will have aserious impactonMalaysiangroupsof companies. If thereis indeedadeparture, the Instituteswould request the IRBtoapplyitprospectivelyandallowthecompaniesaffectedatransitionalperiodtorearrangetheirfinancialstructure.

(iv) In view of the effective date of the amendments, theInstitutes would also like to seek clarification that allexisting intercompany loans/advances would continue tobe accepted and that the new provision would apply toall loans/advances made or entered into from 1 January2009. This would be the logical treatment as the IRBand the Ministry of Finance are both fully cognisant thatinterest free loans/advances have been the way in whichbusinessactivitieshavebeencarriedonamonggroupsofcompanies.

The Institutes would also like to know if there would be anyadditional guidelines issued on transfer pricing or whether theexistingtransferpricingguidelineswillbeamendedaswellasthetimeframeforthis.

AnswerbyIRBM:


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18. thinCapitalisationRules[section140a(4)&(5)]

(i) The Institutes would like to seek clarification on what ismeantby

(a) “financialassistancewhichisexcessiveinrelationtothefixedcapital”;

(b) “debts”;and(c) “equity”.

Whatdebt-equityratiowouldbeused?

TheInstitutesareoftheviewthatthincapitalisationinmanycountriesappliestocrossborderlendingasitisameansofcurtailing any perceived excessive outflow of funds/profitstononresidents. Inthiscontext,theInstituteswishtoseekconfirmationthattheproposedthincapitalisationruleswillonlybeappliedtocrossbordertransactions.

Inaddition,theInstituteswouldalsoliketoknowwhatdebt-equity ratio would be used? The Institutes also hope thattherewillbeflexibilityinadoptingdifferentdebt-equityratiosfordifferentsectorsasthetypeandthemannerofcarryingonbusinessdiffersamongvarioussectors.

(ii) The Institutes would like to point out that existing loansor financial assistance made prior to the introductionof thin capitalisation rules should not be affected, i.e. agrandfatheringprovisionshouldbeinplace.Thus,therulesshould apply only to new loans/financial assistance madefrom2009onwards.

(iii) The Institutes would like to seek confirmation that therewouldbeacompensatingadjustmentontheotherpartyifanadjustmentismade.

(iv) It is felt that thincapitalisation,whentakentogetherwiththeSection33(2)interestrestriction,canleadtoadoublerestrictionandthusbedetrimentaltoabusiness.Althoughthesearedifferentconcepts,theyaddcomplexitytothetaxsystem. Such complexity adds to administrative burdens.TheInstitutesalsoseekconfirmationthattheSection33(2)provisionwillbeapplied toallborrowingsand thenwhenit comes to thin capitalisation, the restriction will applyto only the inter-company borrowing which exceeds therelevantdebt-equityratio.

AnswerbyIRBM:


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19. donationstoapprovedInstitution

Theincreaseinthelimitfrom7%to10%ofaggregateincomeforacompanyisnoted.However,theInstituteswouldalsosuggestthatthereshouldbeflexibilityinsuchcases.Forexample,therecouldbe a small company which made a small profit say, RM100,000and which wishes to donate say RM25,000 to a charitableinstitution.Undertheproposedchange, thiswillberestrictedtoRM10,000. It is suggested that the law be amended to stipulatethelowerof10%ofaggregateincomeorRM25,000(orsomeotherpractical threshold). In addition, the Instituteswish topointoutthat the provision should apply to all taxpayers instead of onlycompanies.

AnswerbyIRBM:

Itisapolicymatter.IftheInstituteswishtopursuetheissue,itisadvisabletomakeaproposaltotheMOF.

20. Reinvestmentallowance(Ra)(schedule7a)

The Institutes take note of the proposed amendments which itis understood are due to the perception that there had beenanelementof abuse inclaiming theRA.However, the Instituteswould like to express the view that an incentive should notbecome a disincentive. If there is abuse, the answer lies ineffectiveenforcementratherthanimposingstringentruleswhich,inmostcases,practicallynullifytheRAasanincentive.Tosomecompanies,theproposalshavecomeasatotaldisincentiveatatimewhentheeconomyisfacingchallengesandtheneedtofacechallengeswould involvemodernisationof thebusiness inorderto survive and take up new opportunities that may surface. Theextensionoftheeligibilityperiodto36months,thewithdrawaloftheRAiftheassetsaredisposedwithin5yearstorelatedpartiesandthenarrowdefinitionof‘manufacturing’areseenasnegativesteps for thebusinesscommunity.Asa temporarymeasure, theInstituteshopethatthe IRBcanamendthePublicRuling2/2008and introducea transitionalprovision for the implementationofthenewlaw.

AnswerbyIRBM:

An Addendum to Public Ruling 2/2008 is being prepared. Itwill incorporate the Budget 2009 amendments on ReinvestmentAllowance (RA). Relaxation on certain issues will also beincorporated.

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(i) Introductionofnewdefinitionofmanufacturing

TheInstituteswouldliketohighlightthatthenewdefinitionof manufacturing introduced in Schedule 7A is differentfromthedefinitionofmanufacturingactivityintheIndustrialCoordinationAct1975(ICA)anddefinitionofmanufacturein the Sales Tax Act 1972 (STA). It also differs fromthe definition contained in the Public Ruling No. 2/2008(Reinvestment Allowance) issued in April 2008. This maycreate confusion as businessmen may not understandwhytheyarenoteligibletoclaimthe incentivewhentheyhavethemanufacturinglicenceunderSTAorICA.Itmakesour tax system appear complicated. There is a need forthe various authorities to streamline the terms used informulatingfiscalpolicysoastoachievegreaterefficiency.

AnswerbyIRBM:

MOFhasstudiedthevariousdefinitionsbeforedecidingonthenewdefinitionasaprovisionintheSchedule7A.

(ii) Processingactivity

Witheffect fromYA2009,processingactivity isexcludedfrom the definition of a qualifying project and thereforewill not be eligible for the RA. Paragraph 2 of Schedule7A provides that RA shall be given in respect of capitalexpenditureincurredinthebasisperiodsfor15consecutiveYAbeginning from the YA for the basisperiod inwhich aclaim for RA was first claimed in respect of that capitalexpenditure.TheInstituteswouldliketoseekclarificationastowhethercompanieswhichpreviouslyqualifiedforRAfor processing activity would still be able to claim RA onexpansionafterYA2009onwards?

AnswerbyIRBM:

Yes.A company which previously qualified for RA for 15consecutive YA for processing activity (which qualifies forRAunderthecurrentschedule)butisnolongeraqualifyingactivity from YA 2009 onwards due to the exclusion ofprocessingactivityfromthedefinitionofaqualifyingprojectwould continue to be eligible for RA as long as all otherconditionsaremet.

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example1

Company A is engaged in processing activity and it hadfirst claimed RA in YA2005 to 2007 under the currentrules. The qualifying project was completed in YA2007.In YA2010 to 2013 Company A will embark on another 3yearexpansionprojectof itsexistingbusiness,which isaprocessing activity. Under the new provision, this activitywillnotbeconsideredasaqualifyingproject. IsCompanyAstilleligibletoclaimRAforYAs2010to2013pursuanttoParagraph2ofSchedule7A?

AnswerbyIRBM:

Company A’s qualifying period is from YA 2005 to YA2019.Withinthis15consecutiveyearsofassessment,thecompany iseligible to claimRAonanyqualifyingprojectinprocessingactivityundertakenbythecompanysincethequalifyingperiodhascommencedpriortoYA2009.

example2

CompanyBisengagedintheprocessingofaproductandhasembarkedona3yearexpansionprojectfromYA2008to2010underthecurrentrules.WillCompanyBstilleligibletoclaimRAforYAs2009and2010?

TheInstitutesareoftheviewthatthosecompanieswhichqualifiedforRApreviouslyshouldstillbeeligiblefortheRAuntiltheexpiryofthe15yeartimelimit.

AnswerbyIRBM:

SinceCompanyB’squalifyingperiodhadcommencedpriorto the amendment coming into effect in 2009, thereforeCompanyBiseligibleforRAforYA2009and2010fortheactivitiesthatwouldqualifyunderthecurrentschedule.

IRB agrees with the view of the Institutes on these 2Examples

(iii) newtermsusedinthedefinitionofManufacturing

Paragraph 9(i)(c) define manufacturing to include “mixingof materials by a chemical reaction process includingbiochemicalprocess….”

The Institutes would like to seek details in respect of thevarious new terms used in the new definition such as“biochemicalprocess’’,etc.

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Paragraph 9(iii) defines simple as “an activity which doesnotneedspecialskills,machines,apparatusorequipmentespeciallyproducedorinstalledforcarryingouttheactivity.”However,whatconstitutesspecialisnotdefined.

In this respect, the Institutes would like to enquire whenwill the Public Ruling be amended and hopes that theprofessionwouldhavetheopportunitytocommentonthedraftamendmentstothePublicRuling.

AnswerbyIRBM:

AddendumtoPU2/2008isintheprocessofbeingprepared.TheInstitutes’requesttoseethedraftisnotedandwillbegivendueconsideration.

(iv) exclusionofPackagingactivity

Paragraph9(i)specificallyexcludesanyactivityofpackagingor presenting goods for sale, or facilitating shipment andtransportationfromthedefinitionofmanufacturing.

The Institutes are of the view that manufacturing activityshould be the whole process of manufacturing, includingthepackagingactivity.Withoutpackaging,thegoodswillnotbeinasaleablestate.Infact,someofourgoodsarelosingout in theexportmarketnotdue topricecompetitionorqualityofproduct,butduetounattractivepackaging!Inanintegrated manufacturing system, different manufacturingprocessesarelinkupandautomated.Itmaybedifficulttosegregatethecostofoneprocessingmachine.

The Institutes suggest that where the packaging is notthe only activity, it should be considered as part of themanufacturing activity and Paragraph 9(i)(aa) to (hh) shallnotapply

AnswerbyIRBM:

The packaging activity in paragraph 9(i)(bb) refers to abusinesswhoseactivityisnotmanufacturingbutonewheretheactivity ismerelybuying inbulkandrepackagingtheproduct.

Where the activity is manufacturing, packaging activitysuch as bottling, placing in boxes, bags and cases as asaleablestatewouldbepartandparcelofthemanufacturingprocess.

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The policy makers’ intention is to ensure that RA is notclaimed by companieswhose activities are basically onlythoselistedunderparagraph9(i)(aa)to(hh).

(v) ControlledtransferassetsandassetstransferunderaschemeofReconstructionandamalgamation

With effect from YA 2009, the above assets will not bequalifyingassetstotheacquireriftheassetswerepurchasedbythedisposerforthepurposesofqualifyingproject.

In a controlled transfer or transfer under a scheme ofreconstructionandamalgamation,whereaqualifyingassetwas purchased and disposed by the disposer within 5yearsandtheRAclaimedwasclawedback,whywouldtheacquirernotbeeligible to claimRAon that asset in viewthatnoRAhaseffectivelybeenclaimedbythedisposer.

The Instituteswould like toconfirm that the restriction isconfinedtoassetsonwhichRAhavebeenclaimedbythedisposer, i.e. if RA is not claimed by or has been clawedback from thedisposer, then theacquirercouldclaimRAontheasset.

AnswerbyIRBM:

IRBM confirms that in relation to control transfer underparagraph1B,Schedule7AITA1967,theacquirerisnotentitledtoRAalthoughRAhasbeenclawedbackfromthedisposer(paragraph2Aapplies).

(vi) ClawBackfordisposalofassetWithin5Years

With effect from YA 2009, where an asset is disposed ofwithin5yearsfromthedateofacquisition,theRAinrespectof theassetwillbeclawedback.The Instituteswould liketoconfirmthattheclawbackwillbeeffectedintheyearofdisposal.

The Institutes are of the view that the 5 year period isextremely long as the asset may become technologicallyobsolete before the 5 years. The move will restrain thecompanyfrominvestinginnewtechnologyandthiswillbedetrimentaltotheoveralleconomicpositioningofMalaysia.ThisisindirectcontradictionoftheGovernment’sintentionto encourage businesses in modernisation and expansionof their activities. The Institutes would suggest that the

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two year period is the norm that is used in the variousprovisions in the lawaffectingcontrolledtransfers.AstheIRB isconcernedaboutpossibleabuse, thevery fact thattheclaimingofRAmaytriggera taxauditwillserveasanadequatedeterrenttowouldbeabusers.

AnswerbyIRBM:

Foreaseofadministration,theclawbackwillbeeffectedintheyearofdisposal.However,ifataxpayerdoesnotagree,RAwillbeclawedbackintherespectiveyears.

The“fiveyearperiod”isapolicymaker’sdecision.

(vii) eligible for Ra 36 Months after Commencement ofBusiness

Whereacompanyhascommencedbusiness,sayonJanuary2007, for12monthsand isclaimingRA inYA2008undercurrentrules,buthasnotreachedthe36monthstestsinYA2009,canthecompanycontinuetoclaimRAinYA2009?

AnswerbyIRBM:

Yes.ForacompanywhichhasalreadyclaimedRApriorto2009,theoldprovision(12months)applies.

(viii) CompanieswithearlyYear-end

Foracompanywithanearlyyear-end(saybasisperiodfrom1February2008to31January2009), itmayhavedecidedto embark on an expansion project and acquired assetsfromrelatedcompaniesinsayMarch2008.TheexpansionprojectisimplementedafterhavingfactoredintheRA.Suchacompany isnowaffectedbytheamendmentswhicharecertainlyretrospectiveinitseffectonsuchcompanies.Forsuchentities,theproposedamendmentsarecertainlynotfair.Onepossiblesolutionwouldbetoapplytheproposedamendments from a specific date say 1 January 2009 orBudget Day so that such investments that have alreadybeenmadearenotaffected.

AnswerbyIRBM:

The suggestion is noted. This would involve the policymaker’sdecision.

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21. singletiersystem

AlthoughtheSingleTierSystemhasbeenintroducedforoneyear,various issues are still unresolved in respect of the transitionalprovisionsillustratedbelow.

(i) Parallel existence of Imputation and single tiersystem

Itwas indicated inthe2008NationalTaxConferencethatdividends paid (under the imputation system) by way ofoff-settinginter-companybalanceswillbetreatedsimilartothewaydividends- in-kindare treated, i.e.suchdividendswillbedeemedassingle-tierdividends (just likedividendsinkindpaidtoordinaryshareholders).Assuch,theSection108balancewillremainintact.TheInstituteswouldliketoconfirmthattheabovetreatmentisinorder.

AnswerbyIRBM:

Yes,theabovetreatmentisinorder.Dividendspaid(undertheimputationsystem)bywayofoff-settinginter-companybalances will be treated similar to the way dividends-in-kind are treated, i.e. such dividends will be deemed assingle-tier dividends (just like dividends in kind paid toordinary shareholders).As such, theSection108balancewillremainintact.

(ii) section110set-offfordividendnotPaidinCash

Clause50ofFinanceBill2008stipulatesthatSection110set-offisnotavailabletorecipientifthedividendisnotpaidincashwhentheFinanceAct2008comesintooperation.TheInstituteswouldliketoclarifythatSection110setoffisavailabletodividendpaidbywayofsetoffpriortocomingintooperationofFinanceBill2008.

AnswerbyIRBM:

Under section 40 of Finance Act 2007, a company isentitledtodeducttaxifdividendispaidincashinrespectofordinaryshare.Clause50ofFinanceBill2008istoclarifythatdividendmustbepaidincash.

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22. PowerofdgIRtodirectInstalmentPaymentsforCompanies[section107C(8a)]

Witheffectfromyearofassessment2010,theDGIRisempoweredtodirectinstalmentpaymentsofacompanybeforethe6thmonthof the basis period for a year of assessment and be deemed asestimateoftaxpayablefortheCompany.Thepenaltyof10%willbe imposed on the excessive difference between the actual taxpayableandtheamountofdeemedtaxestimate.

TheInstituteswishtoseekconfirmation/clarificationastowhetherthereisanyrestrictionontherevisedamount.

AnswerbyIRBM:

Thereisnorestrictionontherevisedamount.

23. deductiononexpensesforRecruitmentofWorker

The Income Tax (Deduction of Pre-commencement of BusinessExpenses Relating to Employee Recruitment) Rules 2008[P.U.(A)No.361/2008]weregazettedon25September2008togiveeffecttothe2009Budgetproposalthatdeductionbegrantedforrecruitmentexpensesofworkersincurredbeforecommencementof business. The Institutes applaud the Government’s efforts toassisttheprivatesectorinsettingupbusinesses.

However, the Institutes would like to seek clarification on thefollowingissues:

(i) Whatconstitutes“expensesontherecruitmentofemployeesto enable the person to commence its business”? Wouldpayment to a human resource agency for recruitment ofreceptionistandaccountspersonnel,whichisnecessaryforthemaintaininganoffice,beeligible?

AnswerbyIRBM:

Yes,thedeductionincludesexpensesontherecruitmentofadministrativeemployees.

Expensesontherecruitmentoftheadministrativeemployeesincurred prior to the commencement of the businessconstitutes “expenses on the recruitment of employees toenable the person to commence its business”. Therefore,payment to human resource agency for recruitment ofreceptionistandaccountpersonnelarealsoexpenseswhichfallsunderthatRules.

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(ii) The expenses must be incurred within the period of oneyear prior to the commencement of its business. It isbelievedthataoneyearperiodreferstoa12monthperiodprecedingtheactualdateofcommencementofbusiness.

The Institutes would suggest that on the same rationale,thestaffcosts,includingsalary,wages,EPFandSOCSOetc.should also be given deductions. This will certainly assisttheSMEsinstartingupbusinesses.

AnswerbyIRBM:

The policy is to exclude administrative expenses. In otherwords, expenses such as salary and EPF incurred priorto the commencement of the business are not eligible fordeduction.

24. taxIncentivestoenhancetraininginselectedfields

Toensurethedevelopmentofasufficientpoolofskilledmanpower,itisproposedthat:

i. Double deduction be given on expenses incurred byemployers in training their employees in the followingfields:

a. Postgraduatecoursesininformationcommunicationandtechnology(ICT),electronicsandlifesciences;

b. Postbasiccoursesinnursingandalliedhealthcare;and

c. Aircraftmaintenanceengineeringcourse.

ii. Withholdingtaxexemptionbegiventononresidentexpertsonincomereceivedbyprovidingtechnicaltrainingservicesintheabovefields.

The Institutes would like to confirm that where a non-residentexpertisonlyreceivingincomefromprovidingtheabovetechnicaltrainingservicesinMalaysia,heneednothavetofilehistaxreturnsincetheincomeisexempt.

AnswerbyIRBM:

Yes.Thenon-residentexpertneednothavetofilehistaxreturnifthefeesfromprovidingqualifyingtechnicaltrainingservicesisthesoleincomethatderivedfromMalaysia.

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25. extension of accelerated Capital allowance (aCa) onsecurityControlequipment

The government recognises that other business premises suchas hotels and banks also install security control equipment. Inrecognising their effort to ensure security, it was proposed inthe2009budgetthatACAonSecurityControlEquipmentwillbeextendedtoallbusinesspremises(Appendix24,2009Budget).

However,theIncomeTax(AcceleratedCapitalAllowance)(SecurityControl Equipment and Monitor Equipment) Rules 2008 [P.U.(A)No.359/2008]stipulatesthatACAisonlyavailableto

(i) aresidentindividualforsecuritycontrolequipmentinstalledat any building of permanent structure used for thebusiness.

(ii) a resident company incorporated under Companies Act1965 and approved under the Industrial CoordinationAct 1975, for security control equipment installed at itsfactory;

(iii) a resident company incorporated under Companies Act1965 for Global Positioning System (GPS) for vehicletrackingforits

(a) containerlorrybearingCarrierLicenceA,and(b) cargolorrybearingCarrierLicenceAorC

The Order does not extend the claim of ACA to all businesspremises as proposed in the 2009 Budget. It only extends tobusinesspremisesofindividualsonly.Forcompanies,thepositionremainsthesameasbefore.Non-manufacturingcompaniessuchas the hotel, banks, shopping malls, restaurants, etc. are noteligibletotheACA.

The Institutes would therefore like to enquire whether anotherOrder would be issued to address these non-manufacturingbusinesspremises.Ifnot,willthecurrentOrderbeamended?

AnswerbyIRBM:

A new Exemption Order will be issued to replace ExemptionOrder P.U.(A) 359/2008 and to include non-manufacturingcompanies.

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26. Improvement of aCa on Information and Communication(ICt)equipment

To encourage the private sector to invest in the latest ICTequipment and in line with the development in ICT, the 2009Budget propose to shorten the 2 year ACA claim to one year.The IncomeTax (AcceleratedCapitalAllowance)(InformationandCommunication Technology Equipment) Rules 2008 [P.U.(A) No.358/2008]weregazettedon25September2008togiveeffecttothe2009Budgetproposal.

Contrary to the intention stated in the 2009 Budget proposal,the Order appears to be more restrictive than the old rules inthat it introducesaclawbackprovisionandexcludescompaniesenjoyingincentivesunderPromotionofInvestmentsAct1986andreinvestmentallowancefromclaimingtheACA.

TheInstitutessuggestthattheauthorityconsiderwithdrawingtheclawbackprovisionasitisarestrictioncontrarytotheintentionandrealityoftechnologyadvancement.

AnswerbyIRBM:

IRBMconfirmsthattheclawbackprovisionwillnotbewithdrawnasitisapolicymatter.

C. staMPdutY

1. stampdutyonloan,services,equipmentleaseagreementorInstrument[stampact1949,firstschedule,Item22(1)]

With effect from 1 January 2009 a loan agreement, serviceagreementandequipmentleasingagreementwillbesubjectedtoadvaloremstampduty.ThiswilladdtothecostsofdoingbusinessinMalaysia.Theresultofthisisfarreaching.

TheInstituteswishtohighlightthatthechangewillhaveanegativeimpactontheservice industry. It runsagainst theGovernment’seffortstopromotethedevelopmentoftheservicessector.

TheInstitutessuggestthattheactualtypeofagreementsintendedto be covered be specified. A general coverage of everythingis an unacceptable approach as this will result in unintendedoutcomes and is particularly ‘painful’ under current economiccircumstances.

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AnswerbyIRBM:

DocumentschargeableunderItem22:(AdValoremDuty)

1. Loanagreement2.Serviceagreement3.Equipmentleaseagreement4. Annuity5. Covenant6. Licenceagreement

Documentunderitem22butchargeablewithfixedduty(RM10.00)

1. FinancingundertheSyariahprincipleofAlBaiBithamanAjil2.Highereducationloanagreement

DocumentschargeableunderItem27(AdValoremDuty)

1. Chargeoragreementforacharge2.Mortgage3.Loanforsmallandmediumsizeindustry4.Loaninforeigncurrency5.Memorandum of deposit for share certificate or fixed deposit

receipt

Loan and service agreement will be subject to ad valorem dutybasedonequitablegroundaswellas topreventmanipulation toavoidadvaloremduty.

Tenancyagreementisalsosubjecttoadvaloremduty.

d. otHeRteCHnICalIssues

1. tax treatment of unabsorbed losses and Capitalallowances

Section44(5A)andParagraph75A,Schedule3oftheIncomeTaxAct 1967 stipulates that a company with a substantial changein ownership/shareholders are not allowed to carry forward itsaccumulatedlossesandunabsorbedcapitalallowances.However,withthedirectiveissuedinearly2008,itisstatedthattheaboveisapplicabletoadormantcompanyonly.

TheInstituteswouldliketoseekclarificationonthemeaningofadormantcompany.

AnswerbyIRBM:

The IRBM confirms that the Minister of Finance recently hasprovided the meaning of dormant for the purposes of section44(5A)andparagraph75A,Schedule3ofITAasfollows:

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Meaningofadormantcompany:

“A company is considered dormant if it does not have anysignificanttransactioninitsaccountsinafinancialyearbeforeachangeof50%ormore inshareholdings.Assuch, therewillnotbeanyentriesinthecompany’saccountsexceptfortheminimumexpensestofulfillthestatutoryrequirements.

Theminimumexpensesreferredtoareasfollows;1) Cost of filing of annual returns toCompaniesCommission of

Malaysia;2) Secretarial fees for services rendered in filing company’s

annualreturn;3) Taxfilingfeesfortaxreturnandtaxcomputation4) Statutoryauditfees;and5) Accountingfeesforpreparationofaccounts.”

(i) Therearecaseswhereowingtohugelosses,thecompanyisunabletosustainitsbusinessandhenceceasestooperateuntila‘whiteknight’decidestoinvesttorevivethebusiness.This isparticularly true in theconstruction industrywherea project may be abandoned due to cash flow problems,and the developer/contractor find an investor later toinject funds into the company to revive the project. Willthe company be considered dormant and thus be deniedthecarryforwardofitscapitalallowancesandaccumulatedbusinesslosses?

AnswerbyIRBM:

Based on the scenario given, the company has ceased itsbusiness permanently and that company is considered asdormantforthepurposeofsection44(5A)andparagraph75A,Schedule3oftheIncomeTaxAct1967.Howeverifitcanbeproventhatthecompanyhasasignificanttransactionintheaccountsuchasexpensesforgettinganewprojectormaintaining an abandoned project, the company is notconsideredasdormant.

(ii) There are instances where a company temporarily ceasedbusiness to sort out various problems and issues. It maytakeafewyearsandthecompanyisthenfinallysoldtonewshareholderswhotheninvestandstartanewbusiness. Issuchacompanyconsidereddormant?

AnswerbyIRBM:

Notdormantifthatcompanyisstillhasasignificantaccounttransactionandnotonlyminimumexpensesincurred.

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2.PermittedexpensesofInvestmentHoldingCompany(IHC)

Section 60F(2) of ITA defines "permitted expenses" as expensesincurredbyaninvestmentholdingcompanyinrespectof—

a. directors'fees;b. wages,salariesandallowances;c. managementfees;d. secretarial, audit and accounting fees, telephone charges,

printingandstationarycostsandpostage;ande. rentandotherexpenses incidental tothemaintenanceof

anoffice,

whicharenotdeductibleundersubsection33(1)oftheIncomeTaxAct1967.

The Institutes are of the view that since wages, salaries andallowances paid to employees are permitted expenses, it wouldtherefore also include incidental expenses such as EPF, SOCSOcontributions,etcpaidfortheemployees.

AnswerbyIRBM:

IRBM confirms that incidential expenses to wages, salariesand allowances such as EPF and SOCSO contributions paid toemployeesarenotpermittedexpensesasitisapolicydecision.

3. RentalIncomeofIHC

With the amendment of Section 60F in YA 2006, rental incomereceivedbyIHCisnolongertreatedasabusinessincome.

However,inviewofthefactthattherentalincomeofsomeearlierIHCs have been treated as business income all along under theDirector General Ruling No. 1/1995, the IRB has by concessionallowedthepracticetocontinueuntilsuchtimewhentheIHCnolongerfulfillstheconditionslaiddowninDirectorGeneralRulingNo. 1/1995 (due to the disposal of the properties held earlier).Upontheoccurrenceofthis,thenSection60FshallapplytotheseIHCs.

TheInstitutesseekconfirmationthatthisconcessionisavailabletoall IHCswhose rental incomeshavebeen treatedasbusinessincomepursuanttoDirectorGeneral’sRulingNo.1/1995.

AnswerbyIRBM:

TheDirectorGeneral’sRulingNo1/1995ontreatmentofrentalincome is no longer applicable with the amendments of Section60F. With effect fromYA2006, tax treatment of rental incomeis inaccordancewith the revisedprovisions ofSection60FACP1967.

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4. PublicRulingno.2/2008Reinvestmentallowance

(i) definitionoffactory

The Institutes wish tohighlight that thePublicRulinghasdefined “factory” using the literary meaning. However,Schedule3oftheActdefinesfactoryunderParagraphs64and65.ThereisinconsistencybetweenwhatqualifiesasafactoryforindustrialbuildingallowancepurposesandwhatqualifiesforRA.

Example1:Canteen isdefined tobepartof an industrialbuildingunderSchedule3whilethePublicRulingspecificallydisallowsit.

Example2:Wherepartof the factory isusedtostore rawmaterials for use and total floor space used for storingdoesnotexceed10%of total factory floorarea, then thestorage area is considered part of factory. Otherwise, theproportionoffloorspaceusedforstorageofrawmaterialsis excluded fromcostof factory thatqualify forRA.Para.64(b) of the ITA specifically defines the storage area ofraw materials used for the manufacturing process to bepartoffactorywhendeterminingqualifyingexpenditureforindustrialbuildingallowances.

AsaresultofthenewdefinitiononmanufacturingintroducedintheSchedule7A,thequalifyingexpenditureonafactorymaybeaffected.Thereisalsoamoredetaileddefinitionoffactory under Section 2 of the Factories and MachineriesAct1967.

ItistheviewoftheInstitutesthatthePublicRulingoughttoadoptthedefinitionlaiddowninSchedule3becausebotharereferringtothesamecapitalexpenditure.Havinganewdefinitiononfactorycomplicatestheincometaxsystem

AnswerbyIRBM:

Asan incentive, it isappropriate toadoptaseparateanddifferent definition for the meaning of “factory” for thepurposesofRA.

(ii) BackwardIntegration

The existing Public Ruling on Reinvestment Allowanceexcludesanycapitalexpenditurewithregardtoexpansionwhichinvolvesbackwardintegration.Therationaleforthisisunclear.

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The Institutes are of the view that expansion of capacityshouldnotbe restricted toactivities related toonly forwardintegration.Undercurrentcircumstances,as thecostof rawmaterials increase, many businesses seek to have bettercontrolovertheirprices.Inthisregard,backwardintegrationislikelytobebeneficialtowardskeepingthefinalproductcostdown (i.e. being produced internally compared to importingmaterials, etc). Therefore, there are arguments for backwardintegrationprojectstoqualifyforRA.

AnswerbyIRBM:

Backward integration is undertaken not with the intentionto diversify into related products butmore for the purposeof cost-cutting and to ensure control over supply of rawmaterials and components. MOF will take note as policymatter.

5. gazettingofPriorYears’BudgetProposals

Undertheself-assessmentsystem,theburdenisonthetaxpayers/taxagents to fileacorrect return, failingwhichapenaltywillbeimposed. However, the Institutes notice that there are still anumber of prior years budget’ proposals which have not beengazetted.Ifthelawisnotinplace,itwillputthetaxpractitionersand taxpayers in dilemma when filing the annual tax return, i.e.whether they should give effect to the proposals based on theBudget proposals. The question is particularly acute for the taxagentsas taxpayersarewonderingwhycertainexpensesarenotgivenduedeductionasannouncedbytheFinanceMinisterintheBudget.

Alistoftheproposalsthathavenotbeengazettedaresummarisedbelow:

2003Budget

1. A company that invests in a whollyowned subsidiarycompany involved in the consolidation of managementof smallholdings or idle land will be allowed a deductionequivalent to the amount of the investment, and thewhollyowned subsidiary company involved in theconsolidationofmanagementofsmallholdingsoridlelandwillbeexemptedfromservicetax.

AnswerbyIRBM:

The draft of the Rules has been prepared and to besubmittedtoMOF.

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2. Companies that invest in knowledge intensive activitieswill be given the following tax deduction: ExpenditureincurredbyacompanyfordraftingtheindividualCorporateKnowledge-basedMasterPlanwillbeallowedasadeductioninthetaxcomputation.

AnswerbyIRBM:

ThedraftOrderiswithMinistryofFinance(MOF).

2003economicstimulusPackage

1. Groupreliefwillbeextendedunderaprepackagedschemeto forestplantations, including rubberplantations,and toselected products in the manufacturing sectors such asbiotechnology,nanotechnology,opticsandphotonics.

AnswerbyIRBM:

ForestPlantationProject: ThedraftOrderiswithMinistryofFinance(MOF).

Biotechnology: More attractive tax incentive has been provided for

biotechnology sector. Please refer to the Income Tax(Exemption)(No.17)andNo.(18)2007andIncomeTax(DeductionforinvestmentinaBioNexusStatusCompany)Rules 2007. Malaysian Biotechnology Corporation willissueguidelinesontheapplicationoftheincentive.

Nanotechnology,opticsandphotonics: IRBMhasnotbeeninformedontheimplementationofthese

taxincentives.

2. Hypermarkets and direct selling companies that exportlocallyproducedgoodswillbegivenincometaxexemptionon statutory income equivalent to 20% of their increasedexportvalue.

AnswerbyIRBM:

The draft of the Rules has been prepared and to besubmittedtoMOF.

2007Budget

1. Bionexuscompanieswillbegivenaconcessionary rateof20%onincomefromqualifyingactivitiesfor10yearsuponexpiryofthetaxexemptionperiod.

AnswerbyIRBM:


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2008Budget

1. Premium paid on professional indemnity insurance beallowedasataxdeduction.

AnswerbyIRBM:

The Public Ruling has been redrafted after Joint PublicRulingWorkingGroup’s(JPRWG’s)commentandsubmittedtoMOFforpolicydecisiononcertainissues.

2. Incentives for ICT activities including computer softwaredevelopmentberationalisedasfollows:

(a) Companies undertaking ICT activities includingcomputer software development located outsideCybercities be centralised in the Cybercities andCybercentres and be given MSC Malaysia statuscompanyincentives;

(b) Incentives for companies undertaking ICT activitiesincluding computer software development locatedoutsideCybercitiesandCybercentresbediscontinued;and

(c) MDeCbethesoleagencytoprocessandrecommendincentives for companies undertaking ICT activitiesincludingcomputersoftwaredevelopment.

AnswerbyIRBM:

ThereisnoRules/Ordertobegazetted.ThegoverninglawofthisincentiveisthePromotionofInvestmentAct1986.Incentive2(b)willberevokedbyMITIandtheapplicationfortheICTincentivehastobesubmittedtotheMdec.

3. (a) Companies investing in a new testing laboratory for testingmedicaldevicesbe givenpioneer status with100%incometaxexemptionforaperiodoffive years or investment tax allowance of 60% on the qualifying capital expenditure incurred within a periodoffiveyears.

(b) Companiesupgradinganexisting testing laboratoryfor testing medical devices be given an investmenttax allowance of 60% on the qualifying capitalexpenditureincurredwithinaperiodoffiveyears.

AnswerbyIRBM:

There is no Rules/Order to be gazzetted. Testing medicaldevices is a promoted activity under the Promotion ofInvestment Act 1986. This activity will be gazetted as apromoted activity by MITI and the application has to besubmittedtotheMIDA.

99


4. CompaniesthathavebeensuccessfulinreducingemissionofCHGandgrantedtradeableCERscertificatesbegiventaxexemptionontheincomederivedfromthetradingofCERscertificates.

AnswerbyIRBM:

PleaserefertotheExemptionOrder(No.8)2008whichisgazettedon23September2008.

5. Recipients of the Export Excellence Award (Services) andBrandExcellenceAwardbegivena100%taxexemptiononthevalueofincreasedexports.

AnswerbyIRBM:


e. supplementaryIssues

1. singletiersystem

(i) Section 108 Balance Section 39 of Finance Act 2007stipulatesthatthecreditofacompanyasat31December2007shallconsistof--

(a) the amount of the balance for the credit of thatcompany at the end of the basis period for a yearof assessment 2007 ascertained under subsection108(8)of theprincipalActprior tothecoming intooperationofthisAct;

(b) …………(c) …………

As a concession to companies having early financial yearend(i.e. financialyearendingotherthan31December), itwasagreedthatSection110taxcreditondividendincomereceivedonorbefore07September2007beallowedtobetakenintoSection108creditbalance.

However,theIRBhastakentheviewrecentlythatSection110 credit of all dividend incomes received after 07September 2007 are not allowed to be taken into theSection 108 credit balance, even though the recipientfinancial year end fallson31December2007. This isnotconsistent with the law as dividends received between 7September2007to31December2007stillfallswithintheyearofassessment2007forcompanieswith31Decemberyearend.

100


The Instituteswould like to seekclarificationon this. TheInstitutesareoftheviewthatforcompanieswithDecemberyear end, Section 110 credit on dividend received on orbefore31December2007oughttobeallowedtobetakenintotheSection108creditbalance.

AnswerbyIRBM:

Determinationof section108balanceofa companyasat31December2007 isasprovidedunder section39(1)ofsavingandtransitionalprovision.

Asconcession,acompanyisallowedtoincreaseitssection108 balance as at 31 December 2007 by an amountequivalentto:

a) an amount of section 110 set-off on dividendsreceivedonorbefore7September2007forcompanythatcloseaccountotherthan31December.

b) an amountofadvancepaymentmadeonorbefore7September2007.

Itisapolicymatter.

IRBM confirms that for a company with December yearend, section110 credit on dividend received on or before31 December 2007 are allowed to be taken into section108balance.

2. Improvement of aCa on Information and Communication(ICt)equipment

The Income Tax (Accelerated Capital Allowance)(Informationand Communication Technology Equipment) Rules 2008 [P.U.(A)No. 358/2008] is applicable to person resident in Malaysia. Inaddition,IncomeTax(QualifyingPlantAllowances)(ComputersandInformationTechnologyEquipment)Rules1998[P.U.(A)187/1998]andIncomeTax(QualifyingPlantAllowances)(CostofProvisionofComputersSoftware)Rules1999[P.U.(A)272/1999]arerevoked.

The Institutes would like to confirm that for permanentestablishment and non-resident companies, qualifying capitalexpenditureincurredafteryearofassessment2009willnolongerenjoytheacceleratedcapitalallowancesundertherevokedrules.However,theymaystillclaimthenormalcapitalallowancesontheexpenditure. For qualifying capital expenditure incurred prior toyearofassessment2009,therevokedrulesstillapply.

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AnswerbyIRBM:

Yes, IRBM confirms that for permanent establishment andnon-resident companies, qualifying capital expenditure incurredfrom year of assessment 2009 are not eligible for acceleratedcapital allowances under the revoked rules.However, permanentestablishmentandnonresidentcompaniescanstill claimcapitalallowancesaccordingwithSchedule3onthecapitalexpenditure.

ForqualifyingcapitalexpenditureincurredpriortoY/A2009,therevokedrules([P.U.(A)187/1998]andP.U.(A)272/1999])stillapply.

102


appendixa

order/Rulesrelatingtothe2009budgetproposals

Bil. order/Rules status

1 Reviewofthetaxtreatmentforperquisitesprovidedtoemployees

Both Orders and Rules havebeengazettedon16April2009- P.U.(A) 152 and P.U.(A)153respectively.

2 TaxexemptiononincomeofcorporateadvisorsontheissuanceandtradingofSukuk

Hasbeengazzettedon23Oct2008-P.U(A)394

3 EnhancingtaxincentivesforhotelsinSabahandSarawak

PreparedbyMIDA

4 Taxincentivestoenhancetraininginselectedfields

Has been drafted and now iswithMOF

5 Stimulatingthedevelopmentoftheventurecapitalindustry

Has been drafted and now iswiththeAttorneyGeneral(AG)

6 TaxincentivesforlistingofforeigncompaniesandforeignproductsonBursaMalaysia

Has been gazetted on 6November2008-P.U(A)410.

103


appendixa

PublicRulingrelatingtothe2009budgetproposals

Bil. PublicRuling status

1 AddendumtoPublicRulingNo.2/2008:ReinvestmentAllowance

The Addendum has beendrafted and discussed. IRBneeds confirmation from MOFregarding a certain issue. ThedraftAddendumwillbesenttothe JointPublicRulingWorkingGroup (JPRWG)as soonas theissueisresolved.

2 AddendumtoPublicRulingNo.1/2008:SpecialAllowancesforSmallValueAssets

The Addendum has beendrafted and discussed. IRB isin the midst of preparing anamended draft to be sent toJPRWG.

3 AddendumtoPublicRulingNo.1/2006:PerquisitesfromEmployment


4 AddendumtoPublicRulingNo.6/2005:TradeAssociation


5 AddendumtoPublicRulingNo.4/2005:WithholdingTaxonSpecialClassesofIncomes

The Addendum has beendraftedandsenttoJPRWGforcommentson26.11.2008.

6 AddendumtoPublicRulingNo.2/2004:Benefits-in-kind


7 PublicRulingNo.2/2002:AllowablePre-operationalandPre-commencementofBusinessExpensesforCompanies

A new Public Ruling (Issue B)to replace Public Rulling No.2/2002 has been drafted. Thedraft new issuewill be sent toJPRWG after discussion at IRBlevel.

104


appendixa

guidelinesrelatingtothe2009budgetproposals

Bil. guidelines status

1 GuidelinesonAdvancedPricingArrangement

Will be issued by JabatanPematuhan

2 GuidelinesonThinCapitalisation

Will be issued by JabatanPematuhan

3 TransferPricingGuidelines Will be issued by JabatanPematuhan

4 GuidelinesontheTypesofTreatment/MedicinesEligibleForExemptMedicalBenefits

No guidelines will be issued.The explanation will beincorporatedintheAddendumto Public Ruling No. 2/2004 -Benefit-In-Kind.

5 GuidelineontheExpenditureEligibleforDeductionUnderSection34(6)(h).

HasbeenissuedbytheMinistryofFinance(MOF)

6 GuidelinesonSection4(f)IncomeSubjectedtoWithholdingTaxunderSection109F

No guidelines will be issued.Instead, a new Public Ruling-Withholding Tax On OtherPayment To Non-Resident hasbeendraftedandsenttoJPRWGfor comments on 26.11.2008andmeeting will beheld soonwithJPRWG

105

2 • D

ialogues with IRB (Inland Revenue Board)

Appendix B13 (ii) Case 1: Commencement of Business

Y/A Accounting Period

Basis Period

Deadline to file in R/F by Law

Concession from

Operational Division

Remarks

2001 No account 26.06.2001 to

31.12.2001

30.11.2002 To quote in the R/F for

the YA 2001 the 2nd basis period - to prevent the

penalty

Since the account for the Y/A 2001 will only be ready when the company closes the account for the Y/A 2002, IRBM allows the company to submit Return for the Y/A 2001 together with Return for the Y/A 2002 and the deadline for the submission of both Returns is within 7 months from 30.04.2002 – refer to the dialogue 2/2001 between MIT and Revenue Operational Department of IRBM.

2002 26.06.2001 to

30.04.2002

01.01.2002 to

31.12.2002

30.11.2002 – sec 77A(2)

none Return must be submitted by 30.11.2002 whereby the com-pany has to estimate the income for a period 01.05.2002 until 31.12.2002. A revision can be done subsequently when the company submits Return for Y/A 2003. No concession is given by the IRBM to submit R/F 2002 together with 2003 on 30.11.2003.The company can make a self amendment for the Y/A 2002 from 01.12.2002 until 31.05.2003 which is 6 months from the due date. Since account for Y/A 2003 end on 30.04.2003, com-pany only has 1 month to ascertain the actual income for Y/A 2002 and makes the self amendment.

2003 01.05.2002 to

30.04.2003

01.05.2002 to

30.04.2003

30.11.2003 – sec 77A(2)

none none

106

CPA

Tax & Investm

ent Review 2009

Case 2: Change of Accounting Date

Y/A Accounting Period

Basis Period

Due date to filing

R/F by Law

Concession from

Operational Division

Remarks

2001 No account 01.01.2001 to

31.12.2001

30.10.2002 To quote in the R/F the

2001 the 2nd basis period - to prevent the penalty

Since account for Y/A 2001 only will be ready when company closed the account for Y/A 2002, so IRB allowed the company to submit R/F for Y/A 2001 and 2002 together and due date for submitting both returns are within 7 months from 31.03.2002 – refer to dialog 2/2001 between MIT and Operational

2002 01.01.2001 to

31.03.2002

01.01.2002 to

31.12.2002

30.10.2002 – sec 77A(2)

none R/F must submit by 30.10.2002 whereby company has to estimate the income for period 01.04.2002 until 31.12.2002. Revision can be done subsequently when company submitted R/F for Y/A 2003. No concession given by the Operational Division to submit R/F 2002 together with 2003 on 30.10.2003.Company can make self amendment for Y/A 2002 from 01.11.2002 until 30.04.2003 which is 6 months from the due date. Since the account for the Y/A 2003 ends on 31.03.2003, the company has only 1 month to ascertain the actual income for Y/A 2002 and make self amendment.

2003 01.04.2002 to

31.03.2003

01.04.2002 to

31.03.2003

30.10.2003 – sec 77A(2)

none none

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2 • Dialogues with IRB (Inland Revenue Board)Dialogue with Revenue Management Department of Inland Revenue Board

1.0 A dialogue between the Revenue Management Department ofInland Revenue Board (IRB) and representatives of MICPA, MIA,MIT,MAICSA,MATA, ICMAandMACSwasheldonFebruary25,2009.

2.0 Isu-isudaripadaMIT,MIAdanMICPA

2.1 SChedulArTAxdeduCTIonS(STd)

2.1.1 Compoundonlatepayment

There have been a number of cases where the LHDNMimposescompoundforlatepaymentofmonthlySTDeventhough taxpayers had made payments by registered postandreceivedtheacknowledgementfromtheLHDNMwithinthestipulatedtimeframe,i.e.onorbeforethe10thdayofthe month. This has caused undue distress to taxpayerswhoneedtoexplainandforwardthenecessarydocumentsasaproofoftimelypaymenttotheLHDNM.

AstheIRBismovingtowardscomputerisingitsoperationsprocesses, the Institutes believe that the LHDNM couldupdateitsrecordsonatimelybasisandavoidunnecessaryadministrative burden to all parties concerned. TheInstitutes would also like to propose that the LHDNMconsiders includingthepayment forSTD in thee-BayaranfacilitywiththeabilitytoattachthesoftcopyoftheCP39.

Jawapan:

KelonggarandiberikandimanakompauntidakdikenakankeatasmajikansekiranyabayaranpotonganCukaiBerjadual(pCB)diterimapadaatausebelum14haribulan.

Rayuan terhadap kompaun atas bayaran yang diterimaselepas 14 hari bulan boleh dipertimbangkan sekiranyadapatdibuktikanbahawabayaranpCBtelahdihantarpadaatausebelum10haribulan,misalnyabuktipenghantaranmelaluiposberdaftar.

walau bagaimanapun, pihak majikan dinasihatkansupaya menghantar bayaran pCB dengan lebih awaluntukmengelakkankelewatanpos.pihakmajikanadalah

B

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digalakkan membayar pCB dengan menggunakankemudahan yang disediakan oleh pihak bank. BayaranpCB boleh dibuat melalui kaunter bank atau perbankaninternetyangdisediakanolehbank-bankberikut:-

(i)KaunterBank[‘OverTheCounter’(OTC)] CIMBBank publicBank

(ii)perbankanInternet CIMBBank publicBank RHBBank allianceBank

2.1.2 STdAudit

Recently, during STD audits, some companies have beenimposed with penalties for non- deduction of STD fordirectors’ fees paid to directors after an annual generalmeeting(AGM).Thereasonfornon-deductionisduetothefact that the directors have earlier declared such incomein their tax returnsandpaid the taxon those feesas thedirectors’ feesweredisclosed in theirEAFormsbasedontheaccrualsbasistoavoidrevisionoftaxcomputationsforpreviousyears.

The Institutes would appreciate it if the LHDNM couldconsiderwaiving suchpenalties as thedirectorshadpaidthe tax earlier for the accrued directors’ fees which werereceivedaftertheAGM.

Jawapan:

pCBbagifipengarahhendaklahdipotongapabilafipengarahditerima dan bukannya pada tarikh ia diisytiharkan(‘declared’).

Rayuanbolehdipertimbangkansekiranyaadabuktibahawacukaikeatasfipengarahitutelahdijelaskansepenuhnyasebelum tarikh bayaran fi pengarah kepada pengarahberkenaan.

2.1.3 Waiver of Penalty on Wrong Computation under thenewSTdrules

The new rules for application of STD are complicatedand there is insufficient time toeducate theemployers inrespectofapplicationofthenewrules.

109


TheInstituteswouldrequesttheIRBtoprovideatransitionperiod of one year in which the employers would not bepenalised for the wrong computation of STD. This is toallowtheemployerssometimetoadaptandfamiliarisewiththenewrules.

Jawapan:

Kelonggaran diberikan selama satu tahun iaitu sehingga31 Disember 2009 sebagai tempoh peralihan untukpembelajaran,dankompauntidakakandikenakan.

arahan akan dikeluarkan kepada cawangan-cawanganberkenaankelonggarantersebut.

2.1.4 excessiveCompoundforMinorerrors

We understand that a compound is issued based on aprogressiverate.However,inthecaseofSTD,beitthroughignorance,computationalerrororatypoerror,anerror ismostlikelyberepeatedwithoutbeingdetecteduntiltheIRBcomesbackandimposesacompound.

The Institutes therefore request the IRB to considercompoundingthesamemistakeasoneoffence,irrespectiveofhowmanytimesithasbeencommittedsoastorelievethe employers from the financial burden. However, wherethesamemistakeismadeafteracompoundonthemistakehasbeenissuedearlier,itwouldbefairthatthecompoundisimposedbasedonthenumberofoffencesmade.

Jawapan:

IsuyangdibangkitkaninidiambilperhatianolehLHDnM.

2.2 expandedPowerofAccesstoBuildings,documents,objects,etc.

AsraisedduringthepreviousdialoguewiththeOperationDivision(heldon25February2008,pleaserefertoitem2.16oftheMinutes),theLHDNMstatedthatthedefinitionsof“objects”and“things”willbeissuedandforwardedtotheInstitutesforfeedback.However,theabovehaveyettobereceivedbytheInstitutes.

TheInstituteshopethattheLHDNMcouldexpeditethefinalisationoftheabovematter.

Jawapan:

Definisi ‘objects’ dan ‘things’ telah dimasukkan dalam RangkaKerjaaudit(RKa).DrafpindaanRKatelahdiluluskandanakandimuatnaikdalamlamanwebLHDnMtidaklamalagi.

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2.3 extensionofTimeforFilingFormsC&r

According to the Minutes of the Operations Dialogue held on25February2008 (please refer to item2.22of theMinutes), theLHDNMhasgrantedaconcessiontoMarchandDecemberyear-endcompanies tosubmit their tax returnsonorbefore14daysafterthestipulateddeadlineforYearofAssessment2008withoutimposing late filing penalty. This concession is also applied topayments of tax under Section 103(1) of the Income Tax Act,1967.

TheInstituteswouldliketorequestthattheaboveadministrativeconcession be similarly granted for Year of Assessment 2009 tocompanieswithMarchandDecemberyear-endsandbeextendedtocompanieswhichfiletheirFormsC&Rviae-filing.

Jawapan:

Konsesi dilanjutkan sehingga dimaklumkan sebaliknya olehLHDnM. Konsesi ini tidak terpakai bagi borang nyata yangdikemukakanmelaluie-Filing.

Di bawah konsesi ini, penalti tidak dikenakan sekiranya borangnyata diterima oleh LHDnM dalam tempoh 14 hari dari tarikhterakhir(‘duedate’)*untukpengembalianborangnyatamisalnya,borangnyataditerimapadaatausebelum14Ogos2010daripadasyarikatdengantempohperakaunanberakhir31Disember2009.

Dimanapenaltitelahdikenakanbagiborangnyatayangditerimaselepas tempoh14hari tersebut, rayuanbolehdipertimbangkanjikadapatdibuktikanbahawaiatelahdihantarpadaatausebelumtarikh terakhir (‘duedate’)*untukpengembalianborangnyata.Sebagai contohnya, jika syarikat dengan tempoh perakaunanberakhir31Disember2009dapatmengemukakanbuktibahawaborangnyatanyadihantarpadaatausebelum31Julai2010.

Layananyangsamaterpakaiuntukbayaranbakicukaipendapatandi bawah seksyen 103(1) akta Cukai pendapatan 1967; sertabayaranhutangkepadaKerajaandibawahperuntukanKecualiandanperalihanaktaKewangan2007(akta683)danperuntukanKecualiandanperalihanaktaKewangan2009(akta693).

*“Tarikhterakhir(‘duedate’)”adalahtarikhsepertiditetapkandalamaktaCukaipendapatan1967.

111


2.4 TaxClearanceforleaverCases

Whereanexpatriatewhoisabouttoleavethecountry,heorshehastofilethetaxreturnintheyearofdeparturetotheLHDNM.Asthetaxreturnformintheyearofdepartureisnotavailable,thetaxpayerisallowedtofilethetaxreturnbyusingtheprecedingyeartaxreturnform by indicating the relevant year of assessment which will besubmitted.ThiswasclearlystatedonParagraph2.14.1oftheminutesoftheOperationsDialogueheldon4April2007.

Forexample,anexpatriatewhoisleavingMalaysiainJanuary2009hastofilehistaxreturnsforYearsofAssessment (YA)2008and2009before leaving thecountrybyusing the tax return formforYA2007.ItisunderstoodthatthetaxreturnforYA2008hastobefiledtothePusatPemprosesanwhilethetaxreturnforYA2009hastobefiledattheAssessmentBranchconcernedfortaxclearancepurposes.However, sometaxpayershaveencounteredproblemswherethetaxreturnsforYA2008havebeenrejectedbythePusatPemprosesanbecausetheformsforYA2008werenotused.Thetaxpayers have been requested to resubmit the tax returns byusingtheYA2008taxreturnformswhichwerenotavailableatthetimeofsubmissionforleavercases.

In view of the above situation, the Institutes would like to seekconfirmationfromtheLHDNMwhetherbothofthetaxreturnsforYA2008and2009couldbesubmittedtotheAssessmentBranchforearlierissuanceofthetaxclearanceletter.

Jawapan:

Suratkepadapihakpersatuanbertarikh28Mac2007danMinitDialog Operasi Bil. 1/2007 bertarikh 4 april 2007 (perkara2.14.1danperkara2.14.2)adalahdirujuk.

Sekiranyaborangnyataasalbagitahuntaksiranberkenaanmasihbelum dikeluarkan oleh LHDnM, borang nyata tahun taksiransebelumnya boleh digunakan dengan memotong tahun taksiranlamadanmenulistahuntaksiranyangberkenaanmisalnyapotongtahuntaksiran2008dantulis2009.

Borang nyata yang telah lengkap diisi dan ditandatanganihendaklahdihantarkecawanganLHDnMdimanafaildikendalikansupayatindakansegeradapatdiambiluntukmengeluarkansuratpenyelesaian cukai. Untuk mempercepatkan proses tersebut,pembayar cukai/ejen cukai dinasihatkan supaya mengecap‘LEaVER’padaruangkosongdisudutatassebelahkananborangnyataberkenaan.

Sekiranyaborangnyatayangmempunyaicap‘LEaVER’dihantarke pusat pemprosesan di pandan Indah, salinan borang nyataberkenaanakandihantarkecawangandimanafaildikendalikanuntukpengeluaransuratpenyelesaiancukai.

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2.5 BankChargesontherefundChequesfromtheIrB

Some of the taxpayers who are located outside Kuala LumpurhavenotedthatthebankshaveleviedbankchargesforclearanceofchequesreceivedfromtheLHDNMKualaLumpurastheywereconsideredasoutstationcheques.Inthepast,therefundchequesfromtheLHDNMarenotsubjectedtobankchargesastheyhavea specific code which represents that the cheques are from theGovernment.

Inthisregard,theInstituteshopethattheLHDNMwillcontinuetousethespecificcodefortaxrefundchequesissuedtotaxpayerstoavoidanyunnecessarybankchargesbeingimposedontaxpayerswhoarelocatedoutsideKualaLumpur.

Jawapan:

CekyangdikeluarkanolehLHDnMtidakdikenakancajolehbankwalaupun ditunaikan sebagai ‘outstation cheque’. Sekiranya cajdikenakan, pembayar cukai boleh membuat aduan kepada bankberkenaanuntukbayaranbalikcajtersebut.

Kesyangdimaksudkanadalahkesterpencildantelahdiselesaikanolehbanksetelahpembayarcukaimembuataduan.

2.6 VerificationofPassportforleaver

Recently,despitethefactthatFormCP21wassubmittedtogetherwith the passport for verification and the tax was borne by theemployer, the IRB’s Cheras Branch and Jalan Duta Branch hadrequestedforthesignedtaxreturnformsforyearsofassessment2007and2008tobesubmittedtothemforverificationofpassportforaleaver.TheIRBofficersinCherasrefusedtoverifythepassportandinformedthememberthatthiswasadirectivetotheBranch.

WithreferencetoClause2.16 (PassportCertificationprior totheExpatriates’CessationofEmployment)oftheMinutesofDialoguebetweentheRevenueManagementDepartmentoftheIRBandtheprofessionalbodiesheldonApril4,2007,theIRBhasconfirmedthataslongasacompletesetofinformationrequiredbyIRBwasprovided,theverificationofthepassportofexpatriateswouldbecarriedoutbytheIRB.

TheInstituteswouldliketoclarifywhetherthisisthenewpracticeof IRB. Ifso,what istherationaleforthispractice?Whyaretheprofessionalbodiesnotkeptinformedofsuchchanges?

113


TheInstituteswouldpointoutthatatthetimeofcertificationofpassport,theexactamountoftheexpatriateremunerationmaynotbefinalisedyetandthetaxreturns(ifsubmittedatthattime)willonlybeaprovisionalone.ThereappearstobenoneedtoinsistthatthetaxreturnformsmustbesubmitteduponverificationofthepassportasFormCP21wasalreadysubmittedtotheIRBandthetaxwasbornebytheemployer.

Jawapan:

Mengikut amalan berhubung kes ‘LEaVER’, borang nyata bagitahuntaksiranyangberkenaanhendaklahdikemukakanbersamaCp21.Bagi penentuan tarafmastautin, pas pekerjaanmemadaijika tempoh permit pekerjaan melebihi 182 hari. Sekiranyatempoh permit pekerjaan adalah kurang daripada 182 hari,dokumen tambahansepertipasportbolehdijadikansebagaiasasbagimenentukantarafmastautin.

2.7 Application for double deduction on research anddevelopmentexpenditure

Referenceismadetothedoubledeductionapplication(Form1)forresearchanddevelopmentsubmittedtoBahagianTeknikalofIRB.AmemberhasbroughtupthefollowingsituationforconsiderationbytheIRB:

TheForm1wassubmittedonthefollowingdatesforthefollowingyears of assessment but as at to-date, no approval has beenreceivedinrespectofthefollowingapplications(evenafterseveralfollow-upshavebeenmade).

Applicationdates: YA2006onJune29,2006 YA2007onJuly31,2007(extensiongranted)

For YA 2006, as at June 24, 2008, the officer has informed thememberthattheapplicationwasbeingconsideredandapprovalshouldbereceivedshortly.

A letter requesting furtherdocumentationwas issuedby the IRBonAugust11,2008.All information requestedwassubmitted totheIRBonSeptember10,2008andOctober10,2008respectively.Thelastfollow-upwiththeIRBwasdoneonDecember16,2008.The IRBofficer confirmed thatall the information requestedhasbeenreceived.Hewasintheprocessofpresentingthedocumentsto the Technical committee concerned. According to him, thereasonforthedelaywasduetothefactthattheclientwasseekingapprovalforalargenumberofprojects.

114


As regards to YA 2007, there was still no word even though anapprovalisneededinordertomakeaclaiminthetaxcomputationwhichwasdueforsubmissiononJuly31,2008.Thememberwasinformedthat“theofficerislookingintoit".

TheInstituteswouldappreciateitiftheaboveissuecanbelookedintoasdelayscausedifficulties in submissionofacomplete taxreturnform.

Jawapan:

Isuiniberkenaandengankesspesifikdanbukanisusecaraamnyatentang‘timeline’untukkelulusansesuatupermohonan.Olehitu,kesinitidakwajardibangkitkandalamDialogini.

walaupun had tempoh bagi memproses dan memaklumkankeputusanpermohonankepadapembayarcukaitidakdinyatakandalam Ketetapan Umum no. 5/2004 di laman web, LHDnMmemahami keperluan pembayar cukai untuk mengetahui samaadabolehmenuntutpotonganduakaliberkenaansebelumborangnyatadapatdikemukakan.

walaubagaimanapun,kesiniakandiambilperhatianolehJabatanDasarpercukaian,LHDnM.

2.8 PenaltyForFailureToFurnishTaxreturnorGivenoticeofChargeability

We refer to the rate of penalty under Section 112(3) of the ITA,whichisavailableontheIRB’swebsite.

The rate of penalty is dependent on the number of offencescommittedi.efor1st,2nd,3rdetcoffences.TheInstitutesareoftheviewthatasaconcession,therecordfortheoffencecommittedmorethansixyearsagoshouldbeexpunged.Thisisparticularlyimportantastherecouldhavebeenoffencescommittedintheearlyyearsbyataxpayer(company)andtheshareholdersmayhavechangedandthenewshareholdersarenotawareofthepreviousoffences.TheInstitutesareoftheviewthatifataxpayerhasnotcommittedanyoffenceafteralapseofsixyears,anyoffencecommittedthereaftershouldbeconsideredafresh.

The Institutes would like to seek the IRB’s confirmation on thenumberofoffencescommittedinarrivingatthepenaltyforfailureto furnish return or give notice of chargeability under section112(3)oftheITA.

Jawapan:

perkara ini diambil perhatian dan akan disemak semula olehLHDnM.

115


2.9 FormCP204-non-residentBranch/PermanentestablishmentProvidingServices

Item 3(i)(f) of the minutes of Operations Dialogue held on 23February 2000, states that withholding tax paid under Section107Awillbeallowed tooffset tax liabilityarising fromNoticeofInstalmentPayments.IRBfurtherconfirmed(item5oftheminutesof Operations Dialogue held on 15 April 2002) that where thesourceofincomeofanon-residentcompanyisfullysubjectedtowithholdingtax,thecompanyisnotrequiredtofileFormCP204.However,thecompanyshallattachthefollowingdocumentswhensubmittingFormC:

(i) FormCP204previouslysubmitted

(ii) Letter from the payer that withholding tax has beendeductedfromthecontractpayments;and

(iii) Confirmationfromthetaxpayerthatithasnoothersourceofincome.

(iv) Item9.3oftheminutesofOperationsDialogueheldon2April2001confirmedthatfornon-residentrecipientssubjectedtowithholdingtaxunderSections109and109B,taxreturnformswould not be issued. This implies that if the non-residentrecipients received only income subjected to Sections 109and109B,thenCP204isnotapplicabletoo.

TheInstituteswouldliketoconfirmthat

(i) where the source of income of a non-resident branch/permanent establishment is fully subjected to withholdingtax, the non-resident is not required to file Form CP204,irrespectiveofwhetherthewithholdingtaxisimposedunderSection107A,109or109B.

(ii) where the source of income of a non-resident branch/permanentestablishmentispartiallysubjectedtowithholdingtax,thenon-residentisrequiredtofileFormCP204.However,thewithholdingtaxpaidisallowedtobeset-offagainstthetaxinstalmentspayable.

Jawapan:

(a) Syarikat bukan pemastautin dengan pendapatan yangtertakluk sepenuhnya kepada cukai pegangan di bawahseksyen107a,dikehendaki:-

(i) mengemukakan Cp204 dengan nilai ‘0’ sebagaiamaunansuran;serta

(ii) suratuntukmemaklumkanbahawaansuranCp204tidak dibayar kerana cukai pegangan telah dibuatdaripadabayarankontrak.

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(b) Syarikat bukan pemastautin dengan pendapatan yangtidak tertakluk sepenuhnya kepada cukai pegangan dibawahseksyen107a,dikehendaki:-

(ii) mengemukakan Cp204 dengan amaun anggarancukaibagibahagianpendapatanyangtidaktertaklukkepadacukaipegangan;serta

(iii) suratuntukmemaklumkanbahawaansuranCp204tidak dibayar bagi bahagian pendapatan yangtertakluk kepada cukai pegangan kerana cukaipegangantelahdibuatdaripadabayarankontrak.

2.10 SubmissionofdocumentstoTheIrB

Documentsweresubmittedandacknowledgedbythe IRBofficerat the front desk e.g. original dividend warrants, copy of signedaccounts and tax computation. The branch assessment officerinformedussubsequentlythattheyonlyreceivedourcoverletterwithout the documents attached. The officer even claimed thatheisnottheonewhoacknowledgedreceiptandrequestedustoresubmitallthedocumentstohimagain.However,itisimpossiblefor the taxpayer to obtain another copy of original dividendwarrants from the payer company. Further, we were informedverballybytheassessmentofficerthatbasedontheIRB'sinternalcircular,effectivefromyear2007,theIRBwillnotacceptcertifiedtruecopiesofdividendwarrants.

Thismaybeanisolatedcase.However,inthisinstancerequiringataxpayerwhohasprovidedtheacknowledgementofreceiptbytheIRBtoresubmitoriginaldocumentstotheIRBcauseshardshipandcandelayrefunds.Also,ifthereisanychangeinIRB'spractice,e.g.notacceptingcertifiedtruecopiesofdividendwarrants,taxpayersmustbe informedof thischange inpractice.This isaclearcasewherethroughnofaultofthetaxpayer,thetaxrefundisdelayed.

Jawapan:

2.10.1 KesSelainSyarikat/Koperasi/Badanamanah

a. TahunTaksiran2008

(i)BaucarDividenasal Baucar dividen asal tidak perlu dihantar lagi

bersama-sama borang nyata. pembayar cukaihanyadikehendakimengemukakanbaucardividenasalsekiranyadimintauntuktujuanaudit.

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(ii) HelaianKerja Helaiankerjayangdigunakanuntukpengiraan

tidakperludikembalikanbersama-samaborangnyata,KECUaLIbagi kes cukai dibayarbalikdimanayangberikutperludikemukakan:-

•HK-3;•HK-6 berkenaan tolakan cukai seksyen110

(lain-lain)sertadokumenyangberkenaan;•HK-7;•HK-8 dan HK-9 (jika berkenaan) serta

dokumen yang berkaitan dengan potongancukaiyangtelahdibuatdinegaraasing.

Sekiranya borang nyata dikemukakan melalui e-Filing,HK-3bolehdilengkapkansecaraatastalian(‘online’).

B. MulaiTahunTaksiran2009

(i) BaucarDividenasal Baucar dividen asal tidak perlu dihantar

bersama-sama borang nyata. pembayar cukaihanya dikehendaki mengemukakan baucardividen asal sekiranya diminta untuk tujuanaudit.

(ii) HelaianKerja Helaiankerjayangdigunakanuntukpengiraan

tidakperludikembalikanbersama-samaborangnyata,KECUaLIbagi kes cukai dibayarbalikdimanahelaiankerjaHK-3,HK-6,HK-8danHK-9(jikaberkenaan)perludikemukakan.

(iv) Dokumenlainyangberkenaan Dokumen lain yang berkaitan dengan tolakan

cukai seksyen 110 (lain-lain) dan potongancukaiyang telahdibuatdinegaraasinghanyaperlu dikemukakan jika diminta untuk tujuanaudit.

2.10.2 KesSelainSyarikat/Koperasi/Badanamanah

a. Tahun Taksiran 2008 dan Tahun-tahun TaksiranSebelumnya

Lampiran / helaian kerja yang digunakan untukpengiraan tidak perlu dikembalikan bersama-samaborangnyata,KECUaLIbagikescukaikenadibayarbalikdimanayangberikutperludikemukakan:-

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(i) Syarikat&koperasi-LampiranB1sertabaucar dividenasal;

Badanamanah -HK-3sertabaucardividen asal;

(ii)Syarikat&koperasi-LampiranB2berkenaan tolakancukaiseksyen 110(lain-lain)serta dokumenyang berkenaan;

Badanamanah -HK-6berkenaantolakan cukaiseksyen110(lain- lain)sertadokumen yangberkenaan;

(iii)Syarikat&koperasi-LampiranB3dan LampiranB4(jika berkenaan)serta dokumenyangberkaitan denganpotongancukai yangtelahdibuatdi negaraasing.

Badanamanah -HK-8danHK-9(jika berkenaan)serta dokumenyangberkaitan denganpotongancukai yangtelahdibuatdi negaraasing.

B. MulaiTahunTaksiran2009

(i) BaucarDividenasal Baucar dividen asal tidak perlu dihantar

bersama-sama borang nyata. pembayar cukaihanya dikehendaki mengemukakan baucardividen asal sekiranya diminta untuk tujuanaudit.

(ii) Lampiran/HelaianKerja Lampiran/helaiankerjayangdigunakanuntuk

pengiraan tidak perlu dikembalikan bersama-sama borang nyata, KECUaLI bagi kes cukaikenadibayarbalikdimanaLampiranB1/HK-3,LampiranB2/HK-6,LampiranB3/HK-8dan Lampiran B4 / HK-9 (jika berkenaan)perludikemukakan.

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(iv) Dokumenlainyangberkenaan Dokumen lain yang berkaitan dengan tolakan

cukai seksyen 110 (lain-lain), dan potongancukaiyangtelahdibuatdinegaraasinghanyaperlu dikemukakan jika diminta untuk tujuanaudit.

2.11 AppealforlowerInitialestimateofTaxPayable

A call was made from Kuching to the IRB Pusat Pemprosesanto follow up on an appeal for lower estimates. It is noted thatthe appeal was not attended to promptly. From experience,thisappearstobethenorm.Evenwheretheapprovalhasbeengranted,theapprovalletterisnotreceivedintime.Requestsfortheapproval lettertobefaxedarenotentertained. Withoutthewrittenapproval, the taxpayer is requiredtopaythe instalmentsfirst.

TheInstituteswouldrequestfortheIRBtoreplytosuchappealsonemonthbefore the first instalment isdueso that there isnoneed topayany instalments in advance.Cash flow is importantespeciallyunderthecurrenteconomicuncertainties.

Jawapan:

Masalah kelewatan menjawab surat rayuan pembayar cukaihanyaberlakubagikes-kesyangtahunperakaunannyaberakhirpada31DisemberdimanaCp204 serta surat rayuanditerima30harisebelumtempohasasbermula.pusatpemprosesantidakdapat menjawab semua surat rayuan pembayar cukai sebelum10 Januari sedangkan borang Cp204 perlu diproses sebelum15JanuariuntukmengelakkanpengeluaranCp205olehsistem.

Oleh itu, syarikat dibenarkan untuk membayar amaun ansuranmengikut jadual pindaannya sementara menunggu keputusanrayuan.Sekiranyarayuantidakdiluluskan,syarikatdikehendakimembayarperbezaanamaunansuranberkenaantanpadikenakanpenalti.Sekiranyapenaltidikenakan,rayuanbolehdikemukakansecarabertulissebelumtarikhtertentu.

walau bagaimanapun, pembayar cukai dinasihatkan supayamenghantarCp204bersamasuratrayuandenganlebihawal.

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2.12 lateSubmissionPenaltyImposedforApprovedeoTCases

The approval letter was attached together with the tax returnssubmittedtotheIRBPusatPemprosesan,KL.TheIRBstillimposedlatesubmissionpenaltyforapprovedcases.ThetaxpayerhadtosubsequentlyappealforthepenaltytobewaivedandtheIRBdidnotrespondtotheappealpromptly.Asaresult,thetaxpayerwasrequiredtopaythepenaltybasedontheFormJissuedfirst.Thisaffectedtheircashflow.

ForapprovedcaseswheretheIRBhasalreadyissuedtheapprovalletter, the IRB should not impose any penalty at all. Wherepenaltiesareimposed,theIRBshouldapprovetheappealpromptyi.e.towaivethepenaltybeforetheduedateofpayment.

Jawapan:

pada kebiasaannya, penalti tidak akan dikenakan ke atas keslanjutan masa yang telah diluluskan dan kes penalti (jika ada)akan diselesaikan dalam tempoh satu bulan sekiranya rayuandidapatiberasas.

Keadaan ini mungkin berlaku dalam kes pertukaran tempohperakaunan di mana tarikh mula dan tutup akaun tidakdilengkapkandenganbetul.Tarikhyangharusdiisiadalahtarikhberdasarkantempohperakaunandanbukannyatempohasas.Olehitu, pembayar cukai / ejen cukai dinasihatkan supaya merujukkepadapenerangandalamBukupanduanBorangCdilamanwebLHDnMuntukpanduanmengisitarikhmuladantutupakaun.

Jika penalti dikenakan, rayuan boleh dikemukakan danpertimbanganakandiberikanberdasarkanmeritkes.

2.13 refundCases

Refund for taxpaid inexcess forDecemberyearendcompaniesis still slow. Members have been informed by the Collectionsbranch officer that they cannot process the refund as in theircomputersystem,theassessmentisnotfinalisedyet.Weweretoldtowait for3monthsand if the IRBPusatPemprosesanhas stillnotprocessedthetaxreturnafter3months,wehavetocalltheassessmentbranch(inKuching)inorderforthemtocheckwiththePusatPemprosesaninKL.

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Thetaxrefundisslowandunsatisfactory.ItistootroublesomefortaxpayerstokeepfollowingupwiththeIRBinordertogetthetaxrefunds.TheInstitutessuggestthattheIRBexpeditethetaxrefundprocess.

Jawapan:

antara sebab berlakunya kelewatan pembayaran balik adalahkesilapan menuntut bayaran balik, borang nyata pDF yangtidak mengikut spesifikasi seperti ditetapkan dan sebagainya.pihak persatuan minta supaya isu-isu / masalah-masalah yangmenyebabkan kelewatan pembayaran balik berserta cadanganpenyelesaiannya disenaraikan sebagai panduan kepada ejencukai.

Untuk mempercepatkan proses pembayaran balik, pembayarcukai / ejen cukai digalakkan mengguna e-Filing. penggunaanborang nyata pDF tidak digalakkan kerana ia melambatkanprosesimbasandanpembayaranbalik.Olehitu,ejencukaitidakdibenarkan mengguna borang nyata pDF mulai tahun taksiran2008 bagi kes selain syarikat / koperasi / badan amanah, danmulai tahuntaksiran2009bagikessyarikat /koperasi /badanamanah.

2.14 Acknowledgementofreceiptofdocuments

Every time tax returns (plusoriginaldividendwarrants ) are sentbycourierfromKuchingtoIRBPusatPemprosesan,KLarequestismadetothe IRBtoacknowledgereceiptbut it isnotdone. InfactaselfaddressedenvelopeisenclosedtomakeiteasierfortheIRBtoreturntheacknowledgementbutevenwiththis,thereisnoacknowledgementgiven.

ItissuggestedthatIRBPusatPemprosesanacknowledgesreceiptofalldocumentssubmittedtothembycouriersothatdisputesareminimisedinthefuture.

Jawapan:

Sekiranya sampul surat beralamat sendiri (‘self-addressed’)disertakan,pusatpemprosesanbiasanyaakanmenghantarbaliksalinanakuanterimakepadapembayarcukai/ejencukai.

perkara tersebut mungkin berlaku semasa tempoh puncakpengembalian borang nyata apabila jumlah borang yangditerimaamatbanyak.Olehitu,ejencukaidinasihatkansupayamenghubungi pusat pemprosesan sekiranya berlaku perkaratersebut.

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3.0 Isu-isudaripadaMAICSA

3.1 PublicCompanylimitedbyGuarantee-Foundation

AFoundationwhichisapubliccompanylimitedbyguaranteeandincorporatedundertheCompaniesAct,1965hadinthepastbeingissuedwithaCreferencelately, ithadbeennotedthattheyhadbeenissuedaFreferenceinstead.

Please confirm whether a Foundation which is incorporatedunder the Companies Act 1965 should be issued with a C or Freference.

Jawapan:

Sesuatu organisasi / institusi / badan perseorangan yangmenggunakan apa-apa nama, dan ditubuhkan sebagai syarikatberhadmenurutjaminan(‘limitedbyguarantee’)sepertiyayasandanmempunyaiobjektifsepertiberikutakandidaftarkandibawahjenisfail‘F’(BorangTF):-

(i) tidakbermotifkankeuntungan

(ii) semata-matamemberimanfaatkepadaahli

(iii) memeliharaataumenggalakkankepentinganahli

akan tetapi, sesuatuorganisasi / institusi / badanperseoranganyang menggunakan apa-apa nama dan ditubuhkan sebagaisyarikat berhadmenurut jaminan (‘limited by guarantee’) yangtidakmempunyaiobjektifyangdinyatakansepertidiatasadalahdikategorikansebagaijenisfail‘C’(BorangC).

3.2 Single-tierTaxSystem

Withthe implementationof thesingle-tier taxsystemwitheffectfrom01-01-2008,pleaseconfirmwhetheraFoundationwhichhadreceivedapprovalunderSection44(6)oftheIncomeTaxAct1967isstillrequiredtofurnishthetaxreturnformasitdoesnothaveanytaxableincome.

Jawapan:

Dibawahperuntukansubseksyen77(1)aktaCukaipendapatan(aCp)1967,sesebuahyayasanmasihdikehendakimengemukakanborangnyatakepadaLHDnMsekiranyayayasanitu:-

(i) mempunyai pendapatan bercukai bagi tahun taksiranberkenaan;atau

(ii) tidakmempunyaipendapatanbercukaibagitahuntaksiranberkenaan, tetapi mempunyai pendapatan bercukai bagitahuntaksiransebaik-baiksahajasebelumtahuntaksiranberkenaan dan borang nyata telah dikemukakan sepertidikehendakidibawahaCp1967.

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3.3 Childrelief–Para48(3)ofIncomeTaxAct1967

Underpara48(3),IncomeTaxAct1967,ataxpayerwhohasachildwhoisover18yearsofageandstudyinglocallyoroverseasinauniversity,collegeorsimilarestablishmentcouldclaim4timesthechildrelief.

Manytaxpayershavechildrenstudyinginuniversities,collegesorsimilar establishments who are under 18 years. To alleviate thefinancial hardships faced by these taxpayers, is it possible forthe IRB to consider granting as a concession by allowing thesetaxpayerstoclaim4timesthechildrelief.

Jawapan:

Isuiniberkaitandenganpolisiperundangan.

3.4 Para46(1)(d)ofIncomeTaxAct1967

Underpara46(1)(d)IncomeTaxAct1967,ataxpayercouldclaimuptoRM5,000/=reliefforpurchaseforsupportingequipmentforhimself,(ifheisdisabled)hisspouse,childrenorparent.

WhatarethecategoriesofsupportingequipmentfallingwithinthisparaforataxpayertobeeligibletoclaimtheRM5,000/=relief?

Jawapan:

Tiadakategorikhususbagialatsokonganuntuktujuanperenggan46(1)(d)aktaCukaipendapatan1967.

alat yang dimaksudkan itu mesti membolehkan seseorang yangkurang upaya menjalankan kehidupannya sebagai orang biasa.Orang kurang upaya adalah individu yang berdaftar denganJabatan Kebajikan Masyarakat. Ibubapa yang telah tua / uzurtidakdikategorikansebagaiorangkurangupaya.

MengikutKetetapanUmum2/2005,alatsokonganasastermasukmesinhaemodialysis,kerusiroda,kakipalsudanalatpendengarantetapitidaktermasukcermindankantamata.

3.5 Para46(1)(f)ofIncomeTaxAct1967

Underpara46(1)(f), IncomeTaxAct1967,canataxpayerwho isstudyingforacourseleadingtotheawardofthequalificationbytheInstituteofCharteredSecretariesandAdministrators("ICSA")qualifiestoclaimthereliefofRM5,000/=underthispara.

Note:AlthoughthereisnoActtoregulateCompanySecretaries,underSection139Aof theCompaniesAct 1965,MAICSAthe local division of ICSA is recognised as a prescribedprofessional body whose members are qualified to act asCompanySecretaries.

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Jawapan:

Diperingkattertiari(selainSarjanaatauDoktorFalsafah),hanyakursuspembelajarandalambidangundang-undang,perakaunan,kewangan Islam, teknikal, vokasional, industri, saintifik atauteknologisahaja,yanglayakuntukpelepasandibawahperenggan46(1)(f)aktaCukaipendapatan1967.

Di peringkat Sarjana atau Doktor Falsafah pula, kursuspembelajarandalamsebarangbidangataukursuspengajianjugalayakmendapatpelepasantersebut.

pelepasan ini tidak boleh dituntut sekiranya kemahiran ataukelayakanberkenaanberadadiluarskopyangdinyatakandiatassepertibidangkesetiausahaan.

4.0 Isu-isutambahandaripadaMIT

4.1 extensionofTimefor31March2009year-end

InourlettertotheIRBdated13January2009,wehaverequestedtheIRBtocontinuegranting14daysgraceperiodforfilingoftaxreturnformsC&Rforcompanieswith31December2008and31March 2009 year-ends. We like to thank the IRB for allowing thegrace period for companies with 31 December 2008. However,we had not heard from the IRB in respect of our application forcompanieswith31March2009yearend.TheInstituteswouldliketoconfirmwithIRBthatthe14-daysgraceperiodforfilingisalsograntedtocompanieswithfinancialyearended31March2009.

Jawapan:

Silarujukjawapankepadaperkara2.3diatas.

4.2 PartGofForme

MembershavebeenindicatedthattheyareunabletocollatetheinformationasrequiredbyPartGofFormEA.Therequirementwasmadeknowntotheemployerssolatethatitisverydifficult,ifnotimpossible,fortheemployerstogivecompleteinformation.Manyofthe informationarenotwiththehumanresourcedepartment.For example, an employee given a motorcar and free petrol willnotberecordingdetailsofeachofhis/hertravelingasthebenefitis calculated based on the prescribed value previously. Most oftheexpenseswouldhavebeenincurredforofficialduties.Furthera lot of records are not in the format as required by IRB unlessthe employers trace to the source documents and obtain theinformation. This add tremendous pressure on the businessmenastheyarebusyadjustingthemselvesfortheeconomicdownturnahead.

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TheInstitutewouldrequestIRBtoconsiderwaivingtherequirementthisyear.Theemployersneedtopoolalltheirresourcestofightforsurvivalatthistimeratherthanmundaneadministrativework.

TheInstitutesalsonotedthatsuchrequirement(disclosureinPartG)isnotapplicableforFormEC(forcivilservants)althoughtheydoenjoythesamebenefits!

Jawapan:

Surat bertarikh 24 Februari 2009 kepada pihak persatuandirujuk.

Majikan yang menghadapi masalah untuk menyediakan BorangEamengikutformatbaru(BorangC.p.8a–pin.2008)adalahdibenarkanuntukmenggunakanformatlamaBorangEa(BorangC.p. 8a – pin. 2005). Kelonggaran ini dibenarkan bagi tahunsaraan2008sahaja.

SekiranyaformatlamaBorangEadigunakan,RuangF(Elaun/perkuisit/pemberian/ManfaatYangDikecualikanCukai)dalamC.p.8D–pin.2008tidakperludiisi.

MajikandigalakkanuntukmengemukakanC.p.8DdalambentukCD /diskette.Sekiranyabilanganpekerja tidak ramai,majikandigalakkanuntukmemfailkanBorangEmelaluie-Filing(e-E).

Untukmaklumanpihak persatuan, ‘Elaun /perkuisit /ManfaatYang Dikecualikan Cukai’ juga terdapat dalam format baruBorangEC(BorangC.p.8C–pin.2008) iaitudiBahagianF.Jenis dan amaun bagi setiap jenis ‘Elaun / perkuisit / ManfaatYangDikecualikanCukai’perludisenaraikandalamformatbaruBorang EC manakala dalam format baru Borang Ea, hanyajumlahkeseluruhanyangperludiisi.

4.3 CompoundofPriorYearPdFFiling

A member informed that his client downloaded 2005 tax returnFormBEfromIRBwebsiteandsubmitthetaxreturnon25April2006. Itwasreturnedby IRBon4 July2006onthegroundsthattheFormwasnottheoriginalandrequestthetaxpayertofiletheoriginalformandsenttoIRBassoonaspossible.

ThePDFFormBEwasreturnedtoIRBtogetherwithacoveringletterrequesting that the Form BE be accepted as it was downloadedfrom the website. The IRB issued a letter on 23rd January 2009imposing a penalty under Section 90(3), stating the reason theFormBEwas receivedon29August2006after theduedate forfiling.

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The Institutes are of the view that PDF Form was acceptable in2005and2006.Assuchitshouldnotberejectedinthefirstplace.TheInstituteswouldliketoclarifythattheIRBwouldnotpenalizetaxpayers/taxagentsforfilingPDFFormsbeforeYA2008andPDFFormC&RarestillallowedtobefiledforYA2008.Thereshouldbenotpenaltyimposedonsuchcases.

Jawapan:

pihakpersatuandimintamengemukakanbutirankestersebutkepadapusat pemprosesan untuk semakan semula. Kes borang nyata pDFsebelum tahun taksiran 2007 boleh dipertimbangkan berdasarkanmeritkes.BorangnyatapDFyangdikemukakanmulaitahuntaksiran2007 hendaklah mengikut spesifikasi cetakan seperti dinyatakan dilamanwebLHDnM.IniadalahkeranaborangnyatapDFyangtidakmengikutspesifikasiakanditolaksemasaprosesimbasandanterpaksadiproses secara manual. Kualiti cetakan juga didapati berbeza-bezadi antara mesin cetak dan dakwat yang digunakan. Keadaan inimenyebabkankelewatantaksirandisifatkan.MasalahyangberbangkitdaripenggunaanborangnyatapDFdisenaraikansepertidiLampiranauntukperhatianpihakpersatuan.

4.4 newIrBdirectory,particularlyTechnicalandoperational,AuditandInvestigation

We understand that the IRB is undergoing a restructuring andmany officers are transferred among departments. To facilitatecommunication, we would appreciate if the IRB can issue adirectorytothevariousprofessionalbodieswiththelatestname,contact number, email address and designation of officers. Itwould be useful if the directory can also include the officer in-chargeofthevarioussectionsorunits.

Jawapan:

LHDnMmengambilmaklumcadanganpihakpersatuan.

4.5 updatesofWebsiteoftheIrB

Currently the English version of the website of IRB is not wellmaintained. New information is generally not included. Further,previous years announcement or press releases are not easilyavailable.

Some of the information may still be relevant to taxpayer,particularlyinthecaseoftaxaudit.

Jawapan:

Lamanwebbarumasihdiperingkatpembangunan.Ciri-ciribarulamanwebtermasuklahkemudahanpemaklumankepadapenggunayangberdaftarmelaluie-melapabilaterdapatpindaan/tambahanmaklumatdilamanwebLHDnMkelak.

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5.0 Perkara-perkaralainYangdibangkitkanolehlhdnM

5.1 SuratPerlantikanejenCukai

LHDNM membangkitkan isu tentang pentingnya mengemukakansurat perlantikan ejen cukai. Ini bertujuan untuk mengelakkanperkara-perkara yang tidak diingini apabila orang yang mewakilipembayarcukaitidakdilantiksepertiyangsepatutnya.

5.2 PanduankepadaPihakPersatuan

‘Panduan Pengemukaan Borang Nyata Tahun Taksiran 2008 BagiKes-KesPembayaranBalik(Seksyen110)DanCukaiTerlebihBayarKePusatPemprosesanPandan Indah’diedarkanuntukperhatianpihakpersatuan.Tambahanperkaraiaitu“Ejencukaidinasihatkansupayamengokotdokumendenganteraturdanbetulsupayatiadahelaianyangtertanggalterutamanyahelaianterakhir.”dimasukkandalamPanduantersebutsepertidiLampiranB.

5.3 Sejak dua tahun yang lepas, PEMUDAH telah menggesa agensikerajaan untuk mewujudkan suasana yang mudah dan selesabagi sektor swasta menjalankan perniagaan. Baru-baru ini,PEMUDAH bertanya tentang apa yang sektor swasta buat kearahmenjayakanprogramini.PengarahJabatanPengurusanHasilminta sektor swasta menyokong usaha-usaha sektor kerajaandengan menggunakan perkhidmatan yang disediakan, sama adaianya dalam bentuk elektronik ataupun tidak, untuk menaikkantaraf Malaysia dalam “Ease in Doing Business”. Sektor swastadigalakkan untuk menerima perubahan yang sedang berlaku disekelilingkitasupayatidakketinggalan.Olehitu,pembayarcukai/ejencukaidigalakkanmenggunaperkhidmatanyangdisediakanolehLHDNMsepertie-Filing,e-Bayarandansebagainya.

6.0 Perkara-perkara lain Yang dibangkitkan oleh PihakPersatuan

6.1 Permohonan untuk Borang nyata (borang kosong) diCawangan

Bagi kes borang nyata yang tidak diterima, difahamkan bahawawakil persatuan dari Johor menghadapi masalah mendapatkanborang nyata bagi pihak pelanggannya. Oleh itu, pelanggannyasendiri terpaksa mendapatkan borang nyata daripada cawanganLHDNM.

Jawapan:

Kemungkinancawanganmempunyaialasansendiriuntukmenolakpermohonanejencukaiberkenaan.

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arahanakandikeluarkankepadacawangansupayamengeluarkanborangnyata(borangkosong)kepadaejencukaiyangmemohonbagipihakpelangganmereka.Ejencukaidikehendakimengemukakansenarainamadannomborrujukanpelangganberkenaankepadacawangansemasamembuatpermohonan.

walau bagaimanapun, ejen cukai digalakkan supaya menggunaperkhidmatane-Filingbagimemfailkanborangnyatapelangganmereka.

6.2 CadanganMengadakandialogdiCawanganataunegeri

MenurutwakilpersatuandariJohor,dialogdiadakansetiaptahundiJohorBahrubagi4atau5tahunyanglepas.Beliaumencadangkansupaya dialog diadakan di cawangan lain seperti Kuching, PulauPinang dan sebagainya kerana ia didapati berkesan dari segipenyelesaianisudanmasalahpercukaianyangdihadapiolehejencukaidinegeriitu,danjugamembolehkanejencukaimemberikanmaklumbalas.

Jawapan:

YBhg Dato’ pengerusi bersetuju dengan cadangan tersebutdan surat untuk menggalakkan cawangan menganjurkan dialogbersamapersatuan-persatuanakauntanakandikeluarkan.Isu-isuuntukperbincangandiperingkatcawangan/negeriterhadkepadaisu-isu pelaksanaan sahaja. Isu-isu berkenaan dasar hendaklahdiketengahkan ke Ibu pejabat. adalah disyorkan juga dialogdi peringkat cawangan atau negeri diadakan selepas dialog diperingkatIbupejabatsupayajawapankepadaisu-isuyangsamaatauberkaitanadalahselarasdengankeputusanIbupejabat.

6.3 Kelewatan Pengeluaran Garis Panduan dan Ketetapanumum

Wakilpersatuanmemberikankomententangkelewatanpengeluarangaris panduan dan ketetapan umum khususnya berkenaanPindahanHarga(‘TransferPricing’)walaupunundang-undangyangberkenaan telah lama berkuatkuasa. Oleh kerana itu, ejen cukairisaubahawalayanancukai /amalanyangdigunapakaisekarangmungkinbercanggahdengangarispanduandanketetapanumumyangdikeluarkankelak.

Jawapan:

pengarahJabatanTeknikal,LHDnMmemaklumkanbahawadrafgarispanduandanketetapanumumberkenaan telahdisediakantetapimasihdalamkajiandiperingkatKementerianKewangan.

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6.4 Kaedah Pindahan harga (‘Transfer Pricing’) dan KaedahPenentuanhargaAwal(‘AdvancePricingArrangement’)

Dr.VeerinderjeetmemaklumkanbahawapihakMITbarumenerimadraf terakhir kaedah Pindahan Harga dan kaedah PenentuanHargaAwal.Undang-undangberkenaantelahberkuatkuasamulai1 Januari 2009, Oleh kerana kaedah-kaedah tersebut belumdiwartakanlagi,makapenaltitidakharusdikenakansekiranyatidakdipatuhi.Menurutbeliau,‘thincapitalisation’sepatutnyadibawahkaedahberasingandanbukandibawahkaedahPindahanHarga.

Jawapan:

pengarah Jabatan Teknikal, LHDnM menyatakan bahawapindahanHargabukansuatuperkarabarudankaedahberkenaanadalahhanyapenambahbaikanuntukmenjadikannyalebihtulus.

MICPA Circular No.: TEC/016/04/2009/W Issue date: April 6, 2009

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lAMPIrAnA

PerBAndInGAnAnTArABorAnGnYATAPdFdenGAnBorAnGnYATAASAl

ISu BorAnGnYATAPdF BorAnGnYATAASAl

1. Sampulsurat Sampul surat yang biasadigunakan adalah berbezasaiz ukurannya dengansampul surat beralamatsendiri. Oleh itu, sampulsuratterpaksadibukasecaramanual.

Sekiranya sampul suratberalamatsendiridigunakan,iabolehdibukadenganlebihcepat oleh mesin pembukasampulsurat.

2. Pengasinganmengikutkategori‘KedudukanCukai’

Lebih sukar untukmengasingkanborangnyataPDFkeranatiada‘KedudukanCukai’ di belakang sampulsuratyangbukanberalamatsendiri. Oleh itu, pegawaidikehendaki mencariruangan ‘Kedudukan Cukai’dalam borang nyata yangdiisiolehpembayarcukai.

Jika ’Kedudukan Cukai’dinyatakan di belakangsampul surat beralamatsendiri, borang nyataboleh diasingkan denganlebih cepat untuk diprosesmengikut kategori dankeutamaan.

3. Pemprosesanborangnyata

(i) Memastikan boranglengkap

Bilangan muka suratsetiap borang nyataPDF perlu dikira untukmemastikan bahawaborang nyata itulengkap. Ini adalahkerana terdapathelaian muka suratyang tertanggal keranadawai kokot / klip yangdigunakan tidak kukuh.Helaian muka suratyang tidak mencukupiterpaksa melalui prosestambahan.

Bilangan muka surat tidakperlu dikira kerana borangnyata asal adalah dalambentuk‘booklet’.

(ii)Kodbar(‘barcode’) Tiada kod bar pada

borangnyataPDF.Olehyang demikian, pelekatkod bar hendaklahdiletakkan pada borangtersebut sebelumdapatdiproses.

Kod bar telah siap dicetakpadaborangnyataasal.

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(iii) Prosesimbasan Proses imbasan bagi borang nyata asal lebih cepat

jika dibandingkan dengan borang nyata PDF keranaperkara-perkaraberikut:-

(a)Susunanmukasurat

Pegawai dikehendakimemastikan bahawamuka surat adalahbetul dan tersusunsecaraberturutanbagisetiap borang dalamsetiap kelompok.Proses ini dibuatsecara manual danmemakanmasa.

Tiada masalah susunanmuka surat bagi borangnyataasal.

(b)Bilanganmukasurat

Bilangan muka suratyang perlu diimbasbagi borang nyataPDFadalahlebihjikadibandingkandenganborangnyataasal.

Proses imbasan borangnyata asal lebih cepatkeranabilanganmukasurattidaksebanyakborangnyataPDF.

(c)Kualiticetakan Jenis mesin

pencetak,kertasdandakwat menentukankualiti cetakan danseterusnya kualitiimejimbasan.

Kualiti cetakanborang nyata PDFdidapati berbeza-beza. Oleh keranaitu, satu sistemdengan programyang berasinganterpaksa disediakanuntuk mengimbasborang nyata PDF.Selepasitu,operatorperlu memasukkandata secara manualdenganberpandukanimejimbasan.

Kualiti cetakan beradadi bawah kawalan danimej imbasan adalahkonsisten. Imbasan secaraICR (‘Intelligent CharacterRecognition’) tidakmemerlukan kemasukandatasecaramanual.

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(d)‘Template’ Lebih borang nyata

PDF diperlukanuntuk menyediakan‘template’ keranakualiti cetakan yangberbeza. Oleh itu,format PDF lebihsukar diselaraskandan konfigurasi ‘template’ sentiasaperludiperbaiki.

Hanya beberapa borangnyataasalsahajadiperlukanuntuk menyediakan’template’ kerana kualiticetakan yang lebihkonsisten.

(e)Imejkosong Muka surat belakang

setiaphelaianadalahkosong dan imejkosong dari imbasanmuka surat tersebutperludigugurkan.

Muka surat hadapan danbelakang boleh diimbasserentakiaitusecara‘duplex’dantiada/kurangimejyangkosong.

(iv)Validasi(‘Validation’) Borang nyata PDF akan

dikembalikan kepadapembayarcukaisebagaiborang tidak lengkap dibawahkeadaan-keadaanberikut:-

(a)BorangnyataPDFyangtidakmengikutspesifikasicetakan,misalnyamukahadapan dan belakanghelaiandicetak(‘double-sided’).

(b)Borang nyata yangditerima adalahsalinan fotostatdanbukannya borangnyataPDF.

(c)Muka surat dalamborang nyata PDFtidaklengkap.

(d)Kertas yang digunakanuntukmencetakborangnyata PDF kurangberkualiti dan mudahterkoyak.

(e)Cetakan/tulisanpadaborang nyata PDFtidakjelas.

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lAMPIrAnB

PAnduAnPenGeMuKAAnBorAnGnYATATAhunTAKSIrAn2008BAGIKeS-KeSPeMBAYArAnBAlIK(SeKSYen110)dAnCuKAI TerleBIh BAYAr Ke PuSAT PeMProSeSAn PAndAnIndAh

1. BorangnyatadihantarMelaluiPosBiasa,PoslajudanPosBerdaftar.

Pastikan petak ‘Kedudukan Cukai‘di belakang sampul suratberalamatLHDNMditandakan.

2. Borang nyata dihantar Melalui Syarikat Kurier, PoslajudanPosBerdaftar

Asing dan senaraikan kes-kes pembayaran balik (seksyen 110)dan cukai terlebih bayar. Gunakan sampul surat beralamatLHDNM yang berasingan dan bertanda ‘Kedudukan Cukai’apabilamenghantarnyakePusatPemprosesan.

3. BorangnyatadihantardiKaunterolehejenCukaiAtaudespatch

Borang-borangnyatayangdihantartanpasampulsurathendaklahdiasingkan kes-kes pembayaran balik (seksyen 110) dan cukaiterlebih bayar. Nyatakan ‘Kedudukan Cukai‘ di atas kelompokborangnyatatersebut.

4. Pastikan borang nyata lengkap, teratur dan tiada helaian yangtercicirsebelummenghantarnyakePusatPemprosesanPandanIndah. Gunakan dawai kokot / klip yang kukuh supaya helaiantidaktertanggal.

5. Semua kes pembayaran balik (seksyen 110) dan cukai terlebihbayarhendaklahdiserahkandi:-

KaunterKhasno.16,Tingkat12,PusatPemprosesanPandanIndah.

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CPA Tax & Investment Review 2009Minutes of Meeting of Inland Revenue Board with Accounting Bodies - Desire

1.0 A meeting was held between the Inland Revenue Board (IRB) and representatives of the MICPA, MIT, MIA, MAICSA, MATA, ICMA ans MACS on March 27, 2009 to discuss issues on e-Filing.

The minutes of the meeting of the working group with accounting bodies (Desire Bil. 1/2009) setting out the issues discussed and the comments/clarification provided by the IRB are attached as per Annexure I.

2.0 Pengesahancatatanminitmesyuarat

minit mesyuarat Bil. 5/2008 disahkan dengan pindaanberikut:

• Perenggan 2.3 Ejaan ‘Backlod’ dipinda kepada ‘Backlog’

• Perenggan 2.4 Ejaan ‘Back-Logged’ dipinda kepada ‘Backlog’

3.0 Perkara-PerkaraBerBangkit

PerbincanganBerdasarkanminitmesyuaratBil.5/2008

3.1 Perkara2.1.1(i)e-Filingfortaxpayers

Tuan Pengerusi memaklumkan bahawa e-Filing bagi memfailkan borang tahun taksiran 2008 boleh digunakan mulai tarikh berikut:

(i) BE dan B - 3 Februari 2009(ii) M. P dan E - 1 Mac 2009(iii) BE, B, M, P dan E

untuk ejen cukai (TAeF) - 1 Mac 2009

3.2 Perkara2.5.11taxagentsDeclaration

Pembayar cukai perlu memberi pengesahan/bukti bahawa syarikat tersebut adalah dorman.

3.3 Perkara2.5.11

Perkara ini merupakan isu teknikal yang memerlukan pindaan akta. Jabatan Operasi Cukai akan mengusulkan isu ini ke Jabatan Dasar Dan Operasi dan Jabatan Undang-Undang.

Tindakan : LHDNM (JOC)

Ci. DesireBiL1/2009

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3.4 Perkara 2.11 Proposed schedular tax Deductions (stD)rules/guidelines

Kelonggaran melaksanakan jadual baru PCB diberi sehingga bulan Mac 2009 dan majikan dikehendaki mengikut jadual baru mulai saraan bulan April 2009. Amaun PCB akan hampir sama dengan jumlah cukai kena dibayar sekiranya majikan menggunakan PCB kalkulator dan mengambil kira tuntutan potongan yang dibenarkan mengikut peruntukan dalam Akta Cukai Pendapatan 1967. Ini adalah ke arah pelaksanaan sistem percukaian yang lebih mudah, efisien dan menjimatkan masa semua pihak.

3.5 Perkara 2.12 issues on change management Proceduresandtesting

Tindakan penambahbaikan akan diambil oleh JTM. e-Filing tahun ini hanya mempunyai satu visi dalam production iaitu semua pihak yang terlibat akan dimaklumkan dengan segera sekiranya terdapat sebarang pindaan.

3.6 Perkara2.13FormcP204-non-residentBranch/PermanentestablishmentProvidingservices

Perkara ini telah dicatat dalam minit Dialog Operasi Bil. 1/2009 yang akan keluar tidak lama lagi.

3.7 Perkara 2.14 access to electronic tax records bytaxpayers

Individu boleh membuat semakan dan mencetak pengesahan dan juga borang nyata walaupun dihantar oleh ejen cukai (TAeF) dengan mfenggunakan PKI individu.

3.8 Perkara 3.1 Pendapatan kasar Lain-Lain yang tertaklukkepadasubseksyen4(f)

Persatuan Akauntan ingin mendapatkan kepastian daripada LHDNM berkenaan jenis dokumen yang diperlukan daripada penerima bukan pemastautin semasa membuat bayaran kepada mereka. Tujuan dokumen ini adalah bagi membolehkan pihak pembayar menentukan sama ada bayaran tersebut tertakluk kepada subseksyen 4(f) yang perlu membuat tolakan cukai pegangan di bawah seksyen 109F atau tidak. Dokumen ini juga boleh dijadikan bukti untuk tujuan audit. Penalti akan dikenakan sekiranya bayaran kepada bukan pemastautin adalah tertakluk kepada cukai pegangan tetapi pembayar tidak berbuat demikian.

Jenis dokumen yang dicadangkan oleh persatuan akauntan ialah:

(i) surat pengesahan daripada penerima yang menyatakan beliau menjalankan perniagaan

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(ii) perjanjian yang menerangkan aktiviti utama pihak penerima

Dr. Veerinderjeet memaklumkan cadangan (i) telah ditolak oleh Jabatana Dasar Percukaian.

Pengarah Pejabat Pengarah Negeri Selangor mencadangkan supaya format standard seperti pengesahan status mastautin dikeluarkan kepada penerima bukan pemastautin. Beliau akan berbincang dengan Jabatan Percukaian Antarabangsa. Persatuan akauntan akan dimaklumkan berkenaan isu ini.

Tindakan : LHDNM (JPC/J. Percukaian Antarabangsa)

3.9 Perkara3.4Laporanauditmeja

Pengarah Jabatan Pematuhan Cukai memaklumkan bahawa Arahan Operasi akan dikeluarkan berkenaan isu ini. Surat dikeluarkan kepada pembayar cukai yang menjalankan perniagaan walaupun tiada penemuan audit tetapi tidak dikeluarkan bagi kes penggajian. Adalah dicadangkan supaya e-mel atau surat (cetakan komputer) dikeluarkan kepada kesemua kategori pembayar cukai walaupun tiada penemuan audit untuk memaklumkan pembayar cukai bahawa kes tersebut telah selesai.

Tindakan : LHDNM (JPC)

PerBincanganBerDasarkanisuBerBangkitDariPaDactim

3.10 e-cP204undertaeF

The Institute understands that e-CP204 for TAeF is still under development. The Institute would like to enquire on the expected date of the launch.

LHDNM

e-CP204 yang difailkan oleh pengarah telah masuk e-CP204 ‘production’ pada 24/12/2008. Hingga kini telah ada 220 pengguna.

e-CP204 TAeF masih dalam pembangunan. Persatuan akauntan akan dimaklumkan berkenaan jadual pembangunan isu ini selewat-lewatnya awal minggu depan.

Tindakan : LHDNM (JTM)

3.11 PcBmis-calculationsinPcBaudits

The Institute understands that an instruction will be issued by the Headquarters of the Inland Revenue Board (IRB) to the branches informing them of the granting of a concession not to impose penalties on genuine errors due to PCB miscalculation. For the

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purpose of clarity and transparency, the Institute would like to request for a copy of the circular so that it can disseminate the information to its members as well.

LHDNM

Jika kesalahan dilakukan secara ikhlas hati atau dengan alasan munasabah, kompaun tidak akan dikenakan. Cadangan untuk mengeluarkan garis panduan kepada pegawai LHDNM untuk tidak mengenakan kompaun bagi kes kesalahan yang dilakukan secara suci hati. Pihak persatuan akauntan diminta untuk mengemukakan contoh-contoh kes yang telah dikompaun untuk membantu LHDNM dalam pengeluaran garis panduan ini. Tuan Pengerusi memaklumkan bahawa pegawai LHDNM adalah cekap dan terlatih dan berkemampuan untuk membezakan jenis kesalahan yang dilakukan. LHDNM akan memberi kelonggaran untuk tidak mengenakan kompaun selama setahun yang merupakan tempoh peralihan untuk tujuan pembelajaran jadual baru PCB.

Tindakan : LHDNM (JPC) / Persatuan Akauntan

3.12 taxpayermanualsign-offone-filedFormundertaef

This issue had been raised during the 15 December 2008 meeting where the IRB had indicated that alternatives to resolve practical difficulties faced by Tax Agents will be deferred for future deliberations. The Institute would like to emphasise that the manual sign-off defeats the purpose of e-filing. The issues that need to be resolved include:

(a) Notwithstanding that it is required by law, if a taxpayer failed to sign manually on the printed final copy of the tax return form, what is the legal status of the e-filing made? Is the e-filing considered valid?

(b) What happens during a tax audit? Will the IRB officers accept such filing document?

The Institute is of the view that since tax agents have already obtained the authority from their clients to submit tax returns electronically on the latter’s behalf through CP55A, the tax agents use TAeF (which is registered with the IRB) and their DigiCerts to submit the returns. This should suffice to support the validity of the e-filed return.

LHDNM

Isu ini adalah seperti perkara 3.3 di atas yang memerlukan keputusan Jabatan Dasar Percukaian dan Jabatan Undang-Undang.

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3.13 Time-out Problem in e-filing

A taxpayer has raised this issue of time-out problem in The Star Online on 2 March 2009.

Background

(a) Taxpayer locked-out of system when filling up his HK-3 details.

(b) On re-logging in, HK-3 information previously keyed in was not updated, as he did not complete the form.

(c) Advised by IRB that the time limit is part of the security system

This issue needs to be resolved. Taxpayers with a large number of dividends will be continually locked-pout of the system and have to continually key in the data.

Feedback from members familiar with information technology suggest that it may not function as a security feature, since it still allows the user a gap of about 10-15 minutes which is more than enough time for someone to manipulate the e-filing. The Institute would like to know which security aspect is this feature intended to address.

If this feature is to address the issue of running out of connections, bearing in mind that the capacity of e-filing can only cater for 10,000 concurrent connections, and that it was a problem when people take a long time to complete the return, then advising people that the system is timing out is probably a way of trying to manage that.

But sufficient time should be given to the taxpayer to key in the details required. If the time is so short that even an experienced and skillful computer user is not able to complete the whole process within the time allowed, then this is inadequate. The IRB should increase the time taken by each taxpayer to do the e-filing instead of reducing it.

There are also some problems with this feature:

i. It only gives a warning of 20 seconds.

ii. It does not take into account that the user is actually working on the panel (e.g. spending time calculating receipts and typing in the values) and that not everyone is computer literate.

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iii. It is implemented using a pop-up. Many people use pop-up blockers in their browsers, such as Firefox, and all that you see is a little message on the top of the screen saying “Firefox prevented this site from opening a pop-up window”. Therefore the user may not even see the time-out message. When this happens, they will lose all of the information that they have been keying in on that page.

LHDNM

(a) Pengguna diberi masa sehingga 10 minit untuk menyelesaikan pengisian setiap muka surat borang/HK-3. 20 saat sebelum tamat, ‘time-out indicator’ akan dipaparkan dan pengguna akan diberi masa selama 10 minit lagi sekiranya klik ‘ok’.

Pengguna perlu klik ‘simpan’ baris demi baris semasa pengisian HK-3 untuk tujuan pengiraan dan mengelakkan kehilangan data.

(b) Kes ini hanya akan terjadi sekiranya proses ‘re-login’ adalah untuk jenis borang yang berbeza dari borang asal.

‘Time-out feature’ hanyalah merupakan satu ‘operational features’ untuk menghalang pengguna memegang sistem terlalu lama tanpa menggunakannya.

i. 20 saat adalah ‘industry standard’. Contohnya: CIMBCliks.

ii. Dicadangkan agar pengguna membuat pengiraaan awal secara manual sebelum memasuki sistem e-Filing.

iii. Disarankan/dicadangkan pengguna ‘unblocked pop-up blockers’ semasa memasuki sistem e-Filing.

3.14 Forme/cP8F

(a) New requirements in 2008 Form E and CP 8D

The 2008 E Return had additional information requested and due to time constraints, the professional bodies had to compromise and agree to an additional form on which information on employees had to be provided. This cannot be a permanent feature and ways and means need to be developed to find a more efficient manner of retrieving such information.

Further the notifications of the new requirements on the information and format of Form CP 8D were sent out separately after the Form E was released. It would be more appropriate that these documents are dispatched together with the Form E to the employer.

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(b) Reporting on benefits/perquisites/allowances (Part G – EA; Column F – CP 8D)

The fact that the figure for total exempt benefits/allowances/perquisites is now required on all EA Forms is another area to be reviewed even though an exception had been granted for the year of assessment 2008.

The various categories of benefits and perquisites, which are to be reported no matter how small the quantum, has created a tremendous administrative burden on employers in terms of monitoring such benefits. These benefits and perquisites are provided and considered by employers to be essential in carrying out the employment duties. The 2009 Budget changes set thresholds which places even more burden on employers. The recent Addendum to the Public Ruling on Perquisites has also placed limitations on certain allowances/benefits.

The Institutes suggest that the IRB should produce a list of common benefits wherein the amount/value can be considered to be fully utilised in the carrying out of the employee’s duties. This will therefore avoid the need for an employee to make the necessary claims for deduction in their personal tax returns and thus reduce uncertainty and time taken to complete the tax return.

LHDNM:

Borang C.P. 8D dimasukkan dalam Borang E 2008 adalah cadangan daripada CTIM melalui surat 27 Ogos 2008 dan telah dipersetujui semasa mesyuarat Desire tahun lepas, cuma ditambah dengan maklumat elaun / perkuisit / pemberian / manfaat yang dikecualikan cukai seperti kehendak Kementerian Kewangan. Maklumat pada Borang E diperlukan untuk:

(i) pemilihan kes audit.(ii) asas membuat taksiran anggaran sekiranya pekerja tidak

mengemukakan borang nyata.(iii) ke arah pre-polulated jumlah pendapatan dalam borang

nyata pembayar cukai.

Borang E dapat membekalkan banyak maklumat yang berguna kepada LHDNM terutamanya dari segi pematuhan.

Persatuan akauntan mencadangkan agar mencari alternatif lain untuk tujuan pemilihan kes audit. Sebagai contoh audit PCB dan maklumat pekerja baru juga boleh diperoleh melalui Borang CP22.

Tuan Pengerusi memaklumkan Borang E akan dibincangkan dengan lebih lanjut lagi di mesyuarat akan datang.

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3.15 irBWebsite

The Institute has suggested that the latest developments be posted on the website (Public Rulings, Guidelines etc.). This will facilitate the filing process and enhance compliance.

LHDNM:

Laman Web LHDNM yang baharu sedang dibangunkan. Bagi memudahkan sebarang maklumat terkini laman web yang baharu ini akan menyediakan kemudahan RSS (Really Simple Syndication). Maklumat terkini yang dimasukkan ke dalam Laman Web LHDNM akan disalurkan terus kepada pengguna RSS yang berdaftar.

3.16 newic

The e-Filing system requires the entry of new IC numbers. Taxpayers who have not updated their ICs are not able to e-file. Similarly, taxpayers (with new ICs), whose spouse does not have new ICs are also not able to e-file. Although the number of taxpayers who have yet to update their ICs may be small, these taxpayers will only be able to file their returns manually. The Institute would suggest the IRB modify the system to allow taxpayers with the old IC numbers to e-file.

LHDNM:

No. K/P baru adalah diperlukan untuk pendaftaran sijil digital. Sebagai rakyat Malaysia perlulah menukar kepada MyKad yang dapat disiapkan dalam tempoh 24 jam jika berurusan di ibu pejabat.

3.17 Pop-upQueryonPcBPayment

The e-filing system (both the Individual and the TAeF) have a “pop-up” query on whether the taxpayer has any PCB payments. This query serves as a reminder to taxpayers, and is a commendable feature where the e-filing is done by the taxpayer himself. However, this may not be effective. As stated in item 4(iii) above, many people use pop-up blockers in their browsers and therefore cannot read the message.

Further, the feature may not be practical for the TAeF module as tax agents are expected to have sufficient in-house checks and measures to ensure that PCB payments (or instalment payments or other tax information) have not been omitted.

The Institute would suggest that a different interface for Individual and TAeF e-Filing be provided (as was done for the individual taxpayer manual sign-off after e-filing – which is in the TAeF, but excluded in the Individual e-Filing).

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LHDNM:

Disarankan / dicadangkan pengguna ‘unblocked pop-up blockers’ semasa memasuki sistem e-Filing.

Sekiranya ejen cukai telah mengisi ruangan PCB, ‘pop-up’ mesej tidak akan ditunjukkan.

Walau bagaimanapun, JTM akan cuba mencari cara lain untuk menunjukkan mesej ini tanpa menggunakan ‘pop-up’. Mesyuarat dimaklumkan bahawa ‘batch processing’ tidak akan dilaksanakan.

3.18 LhDnapprovalofe-filingintergration

The Institute has been made aware that a payroll software provider has received approval from IRB for its payroll software. While welcoming the IRB moving toward accreditation of application software, the Institute would like to enquire about the scope of approval given to the payroll software provider and whether all the payroll software providers are notified that they can also apply for approval of their software. The Institute is concerned that if such approval is not available to others, then it will result in unhealthy competition which may not be beneficial to the tax profession in the long run.

The IRB has in the past refused to give approval to any e-filing software provider on the grounds that it cannot test all the e-filing interfaces. In light of this new development, the Institute would like to enquire whether the IRB is considering accrediting or certification of e-filing softwares? As the e-filing interface has potentially greater impact on the e-filing system than the payroll software and there are far more payroll softwares in the market than e-filing interfaces, the Institute suggests that an accreditation system be set up by the IRB to appraise the credibility of these e-filing interfaces. This could be viewed as a recognition to the e-filing software providers who have been co-operating with the IRB since the inception of e-filing.

LHDNM:

LHDNM tidak akan memberi pengiktirafan kepada sebarang software yang dibangunkan oleh pembekal perisian kerana LHDNM hanya mengesahkan bahawa Jadual PCB memenuhi spesifikasi LHDNM. Berkenaan dengan salah satu pembekal perisian yang mendakwa mendapat pengesahan dari LHDNM, surat telah dikeluarkan kepada pembekal perisian berkenaan untuk penjelasan dan mengarahkan supaya batalkan iklan tersebut.

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3.19 Othere-filingissue

The Institute has received feedback from members that although e-filing on behalf of a taxpayer has been made and acknowledgement receipt from the IRB has been received and printed out, the name of the taxpayer still appears in the listing of the clients that have not yet e-filed! This causes an inconvenience as the tax agent has to reconfirm the status of e-filing for the particular taxpayers with the IRB.

LHDNM:

Masalah ini berlaku pada TAeF Borang C dan R dan telah diatasi.

ya2009issues

3.20 2009FOrme

The Institute is of the view that CP8D is too onerous and administratively burdensome. Notwithstanding the purported purpose of audit facilitation, the tax collections from BE cases are minimal. The bulk of the tax revenue comes from corporate and personal taxpayers in business. Therefore, it is not cost beneficial (for both the IRB and the taxpayers) to focus resources on employment income and the collection of PCB. The Institute would suggest that the IRB replace the E Return (i.e. Employers Return) with the submission of a simplified statement as the information concerned can be accessed through other means.

LHDNM:

Isu ini seperti perkara 3.14 di atas. LHDNM akan mengkaji semula Borang E jika perlu.

3.21 ya2009e-filingsystem

The Institute would like to confirm with the IRB that there will be NO further structural changes. There have been ongoing major structural changes since the launch of e-filing.

LHDNM:

Tidak ada perubahan yang besar-besaran. Pindaan yang dibuat bertujuan memperbaiki sistem selaras dengan maklum balas yang diterima dari pengguna.

3.22 ya2009FilingProgramtargetLaunchDates

The Institute would like to work with the IRB to ensure an improvement in terms of early launch dates in 2009. Although the IRB has been tied to its promise to refund tax credit/overpaid within one month after filing, the IRB could put in a caveat that

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for submissions filed before 1 March 2010, the one month refund period will begin from 1 March 2010 as discussed during the 2008 DESIRE meetings. It is of course imperative that the time-frame for resolving the problems and bugs in the system will be have be set earlier.

LHDNM:

Tuan Pengerusi memaklumkan bahawa penangguhan pembayaran balik sehingga 1 Mac 2009 walaupun e-Filing telah dibuka lebih awal akan diatasi dengan pelancaran eRAS (Electronic Revenue Accounting System). eRAS merupakan satu mekanisme untuk memproses pembayaran balik dan akan beroperasi sepenuhnya pada bulan Jun 2009.

3.23 changemanagementProcedures

There is still room for improvement in the Change Management Procedures after the discussions held in 15 December 2008 DESIRE meeting.

LHDNM:

Dalam production hanya terdapat satu versi yang mula berkuat kuasa pada 03/02/2009. Akan memaklumkan kepada pembekal perisian sekiranya terdapat perubahan yang dilakukan.

3.24 corporatetaxFilings

The first corporate tax filings for YA 2009 will be due (latest) August 2009 (5 months away). Some January financial year-end companies with simple activity may be ready for their filings earlier. The Institute would like to know the status of the new draft Forms C and R for the year of assessment 2009.

LHDNM:

Tarikh Pengeluaran Am Borang C dan R 2009 adalah 1 April 2009

3.25 DecentralisationofFilingtaxreturns

For 2008, taxpayers and tax agents may submit Forms B and BE to any Assessment Branch as well as the Central Processing Centre and to obtain proof of submission of the tax returns.

For 2009, the Institute would suggest that IRB extends this facility to all taxpayers and tax agents to submit all tax returns and the IRB to provide proof of submission by either manual means or by way of mechanised drop boxes (long-term measures) which can issue an automatically generated receipt.

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LHDNM:

Borang nyata selain B dan BE tidak dibenarkan untuk dikemukakan di cawangan. Pengemukaan borang di cawangan akan melambatkan pemprosesan borang.

suPPLementaryissuesFOrDesiremeeting01/2009

3.26 notestoscheduletaxDeduction(stD)for2009

The Inland Revenue Board (IRB) has issued a press release to inform that the new Schedule of Monthly Deductions and the Explanatory Notes are available at website of IRB for use by employers to calculate tax deduction for 2009 remuneration. In the Notes on the website, the annual value of petrol provided by employer (page 8 of the Notes) is calculated based on prescribed value stated in the Public Ruling on Benefit in kind. As the amount of the prescribed value of the petrol (RM900) is less than the exemption granted (RM2,400) by the 2009 Budget proposal, it was indicated in the Notes that the petrol benefit is fully exempted.

Recently, there is a change in the treatment as seen from the same website recently. In the same example, the value of the petrol benefit is not RM900 but a value to be calculated based on the “Addendum to the Public Ruling No. 2/2004 on Benefit in kind. However, Addendum 1 and 2 do not refer to calculation of petrol benefit enjoyed by the employee. Addendum 3 which is supposed to incorporate the changes brought by the 2009 Budget has not yet been issued. In view of the situation, some taxpayers have taken the position that the original computation is correct and filed the return accordingly. Some of the small companies have already filed their Form E with the IRB even before the change of treatment.

LHDNM:

Akan memaklumkan Jabatan Dasar Percukaian berkenaan masalah kelewatan pengeluaran Tambahan Kepada Ketetapan Umum Bil. 2/2004.

3.27 e-filingBug

The Institutes are informed by BRASSTAX that there is a Bug in the e-filing :

Affected Area: Borang B & BE

Location: HK-3

Description: Incorrect re-grossing of dividends

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Result: Agents must resort to manual loading of the returns for the affected borang as the computed figures are inconsistent with the figures calculated through BRASSTAX and confirmed through manual calculation.

Detection: We became aware of the problem through a check that we had in our E-Filing System

LHDNM:

Persatuan Akauntan diminta memberi contoh agar LHDNM dapat menyemak / menjalankan ujian dalaman sistem e-Filing untuk mencari punca masalah tersebut.

3.28 newFormcP55

The IRB has notified the professional bodies on 20 March 2009 that the new Form CP 55 (1-2009) was issued and made available at the website. However, the IRB’s website still shows the old version of CP55 (1-2008)!

LHDNM:

Terlepas pandang untuk mengemas kini Borang CP55 [Pin. 2009] dalam laman web di bawah tajuk Lain-Lain Borang. Tindakan segera pengemaskinian akan diambil.

3.29 slowingDownofe-FilingLoadingtime

The Institutes are informed by some members that they have experienced the slowing down in log on to the e-filing system. The Institutes would like to bring to the attention of IRB that in view of the disallowance of tax agents to use the PDF format tax return forms from this year, it is expected that there will be a surge in the use of e-filing. In addition, due to the late issuance of rules and guidelines pertaining to allowance, perquisite, benefits in kind, transfer pricing, investment holding company, etc. there will be an increase in filings at the last minute. This would add burden to the system.

Last year’s experience indicates that there will be a problem of overcrowding due to last minute filing. The Institutes would like to suggest that the IRB should increase the capacity of the e-filing system as soon as possible.

LHDNM:

LHDNM akan menyemak sistem e-Filing dan menjalankan ujian secara dalaman jika terdapat aduan. Sekiranya tiada masalah pada sistem, kemungkinan berpunca pada lokasi transaksi e-Filing

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dibuat atau sama ada kapasiti komputer pengguna mencukupi atau tidak untuk menjalankan transaksi tersebut.

3.30 DividendofspouseinJointassessment

In the case of e-filing by individual who opts for joint assessment, there is no provision for disclosure of details of spouse’s dividend income in e-filing. This may affect the decision of taxpayers to choose joint assessment.

LHDNM:

HK-3 perlu digabungkan bagi kes taksiran bersama.

4.0 haL-haLLain

4.1 Persatuan akauntan memaklumkan terdapat kes di mana:

(i) pembayar cukai diaudit kali kedua dalam tempoh kurang dari dua tahun

(ii) penyiasatan dijalankan ke atas kes yang telah diaudit kurang daripada setahun.

LHDNM

Keadaan ini sepatutnya tidak berlaku dan LHDNM akan mengambil maklum isu ini.

Tindakan : LHDNM (JPC)

4.2 Lanjutanmasa

Persatuan akauntan inginkan kepastian sama ada lanjutan masa akan diberi untuk pengemukaan borang secara elektronik, begitu juga Borang E 2008 di mana tarikh akhir pengemukaan adalah pada 31 Mac 2009.

LHDNM

Tuan Pengerusi memaklumkan bahawa lanjutan masa hanya akan diberi sekiranya berlaku masalah yang serius pada sistem dalaman LHDNM seperti apa yang telah berlaku pada tahun lepas. Sekiranya semuanya berjalan lancar, lanjutan masa tidak akan diberi.

MICPA Circular No.: TEC/021/05/2009/WIssue date : May 11, 2009

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1.0 TherewerethreemeetingsheldbetweentheInlandRevenueBoard(IRB)andrepresentativesofMICPA,MIT,MIA,MAICSA,MATAandMACS on July 18, 2008, September 12, 2008 and December 15,2008todiscussissuesone-Filing.

Theminutesofthemeetingsoftheworkinggroupwithaccountingbodies (Desire Bil 3/2008, 4/2008 and 5/2008) setting out theissuesdiscussedandthecomments/clarificationprovidedbytheIRBaresetoutbelow.

2.0 MINIT MESYUARAT WORKING GROUP LHDNM DENGANPERSATUANAKAUNTANDESIRE-BIL.3/2008,JULY18,2008

2.1 PerbincanganBerdasarkanMinitBil.2/2008

(i) Perkara2.2

MesyuaratdimaklumkanbahawaLHDNMakanmengusulkantimeline berkenaan e-Filing dan borang manual selewat-lewatnyapada20Ogos2008.

(ii) Perkara2.3

Mesyuarat bersetuju untuk membenarkan persatuanakauntanmelihatdulurekabentukborangnyatapadabulanOktober iaitu selepas mengambil kirapindaanBelanjawan(jikaada).

(iii) Perkara2.5

PersatuanAkauntanmemaklumkanbahawawalaupunHelaianKerja tidakperludihantar keLHDNMtetapipembayar cukaidiminta mengemukakan semua Helaian Kerja berkaitansemasa audit meja. Y.Bhg. Dato' Pengerusi memaklumkanbahawatujuanasalHelaianKerjahanyalahsebagaipanduankepada pembayar cukai dan bukannya wajib diisi. Walaubagaimanapun, perkara ini akan disemak dengan JabatanPematuhandanakandimaklumkankemudian.

(iv) Perkara2.7

Mesyuarat dimaklumkan bahawa LHDNM dalam prosesmenaik tarafkan laman web LHDNM. Satu konsep baruiaituRSStelahdibentangkankepadapihakpengurusandandijangkasiapsepenuhnyatahundepan.

(v) Perkara5

Y.Bhg.Dato'Pengerusimemaklumkanbahawasisteme-Filingsebenarnya adalah satu kemudahan kepada Sistem Taksir

II. DESIREBIL3/2008,4/2008AND5/2008

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Sendiri di mana kemudahan pengiraan cukai disediakanoleh sistem tetapi tanpa mengambil kira penalti lewatpengembalian borang. Pembayar cukai adalah dikehendakimenggunakan borang manual yang boleh diperoleh daricawangan berdekatan ataupun borang PDF dari lamanweb bagi kes tersalah/terkurang laporkan pendapatan ataupengemukaanborang-borang tahunkebelakangan sebab iamelibatkanpenaltiyangperludikirasecaramanual.

Walau bagaimanapun, persatuan akauntan dimintauntuk memaklumkan negara mana yang membenarkanpenggunaane-Filingbagikes-kestahunkebelakanganuntukmembolehkanLHDNMmembuatkajian.

LHDNMakanmengkajicadangandaripadapenyediaperisianuntuk memasukkan Slip Pengiriman Bayaran bagi bayaranpenalti subseksyen 107C(10) dalam Borang C. Buat masainihanyaSlipPengirimanBayarandengankodbayaran086yangterdapatdalamBorangC.

(vi) Perkara7.3

PersatuanAkauntandijangkaakandimaklumkanberkenaanreka bentuk Borang E 2008 pada bulan Ogos setelahmengambil maklum cadangan dan maklum balas daricawangandanjugapersatuanakauntan.

2.2 Isu-isu dan Cadangan daripada MIT, MIA dan MICPABerdasarkanMemorandumBertarikh14Mei2008

2.2.1 PlatformsFore-Filing(Taxpayerse-Filing)

Thee-Filingsystemhasgone throughvariouschangessinceitsinitiallaunchanditwouldbetimelytomakeanassessmentastowhethertherewillbeaneedtohavefurtherchangestotheoverall e-filingplatform.The Institute isof theview thatunlesstherearesomeinherentseriousdefectsintheplatform,there should not be a need to change the platform. This istofacilitatefamiliarizationwiththeexistinge-filingsystem.Aconstantchangeoftheplatformcreatesconfusion.ItishopethatwitheffectYA2008,therewillbenonewe-filingplatformintroducedbyIRB.

LHDNM:

Mengambilmaklumakan cadangan supaya tidakberlakupindaanyangketarabagisisteme-Filing.

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2.2.2 Feedbackone-Filing-GeneralIssues

(i) Improvementondisseminationofe-filingproceduresandtrainingprogrammed.

TheIRBinformationandtrainingcentresaroundhowtoenterthesystembutlacksinformationonhowtouse the system. For example, in the tax agent e-filemodule,thereisnoclarificationontherole,functionandauthorityofasystemadministrator,ataxagent,asupervisorandastaff.Manytaxagentshavelearntthroughtrialanderror.Thereisalsonostepbystepguideonhowtoedit,howtorectifyerrors,etc.

Membersfeedbackthattheycannotgetthesupportwhen they call up the IRB, including the e-filinghotline,becauseeithernoonetakesthecallortheycannotanswertheproblemsraisedsatisfactorily.WeunderstandthattheIRBmaynothavethenecessaryexperiencedstaff,hopefullywiththeimprovementindisseminationofinformationitwillreducetheburdenoftaxpayerscallingthecallcentre.

LHDNM:

Manualpenggunayangdisediakanakandisemaksemuladanakandiperkemaskanbagikegunaanpengguna.Ejencukai dan penyedia perisian akan diberi masa yangcukupuntukmengujisisteme-Filing.

AdalahdijangkaborangmanualakansiapsepenuhnyapadaakhirbulanOktober2008,begitujugaborangelektronik.

Sisteme-FilingTahunTaksiran(T/T)2008dijangkaakandilancarkanpada1Mac2009.

Talian e-latihan untuk borang selain syarikat T/T2008 dijangka akan dibuka pada bulan Disember2008.

(ii) Currently there is no permanent trial site wheretaxpayers can try out the e-filing system withoutcommittingtoe-file.Thisisanimportantfeatureasitisawaytoestablishtaxpayerconfidencetoe-file.

LHDNM:

Taliane-latihansisteme-Filing(e-Cdane-R2008serta borang-borang lain bagi T/T 2007) telahdibuka pada 15 Julai 2008 dan akan dilanjutkansehingga bulan Disember. Tujuan utama e-latihanini ialah ujian ke atas Integrasi sistem perisian

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percukaian berkomputer kepada sistem e-FilingLHDNM. Oleh itu e-latihan ini hanya terbukakepadapenyediaperisiansahajabuatmasainidandijangkaakandibukakepadaejencukaipadabulanNovember.Sebarangpindaanakandimaklumkan.

(iii) Borange-BEdoesnotprovideafieldtoenteranewpassport number unlike Borang e-M, Hence, whenresidentexpatriateemployeesrenewtheirpassports,tax agents are unable to update their passportnumbers.

LHDNM:

Bersetujuuntukmenambahmedanno.pasportbarupadae-borang (e-BE / e-B)dan jugapadaborangmanual.

(iv) The IRB has informed taxpayers that they do nothave to file their Return Form B as their Income isnot taxable for year of assessment (YA) 2006, andhence no return forms were issued to them for YA2007. The Instituteswould like to seek clarificationfromIRBonthisissue.TheInstitutesareoftheviewthatthetaxpayersstillneedtofiletheirtaxreturnstoascertain their accumulatedbusiness lossesandunabsorbedcapitalallowancestodate.

LHDNM:

KriteriaborangnyatatidakdikeluarkanbagikestidaklayakdikenakancukaihanyaterpakaikepadaBorangBEsahaja.Kriteriainitidakterpakaiuntukborang-borang lain. Borang nyata juga tidak dikeluarkankepadapembayarcukaiyangmenggunakane-Filing.Pembayar cukai baru juga dinasihatkan supayamenggunakankemudahansisteme-Filing.

2.2.3 Feedback on Existing Tax Agent E-Filing Module(TAeFSystem)

(i) RigidWorkGroupStructureandUnauthorizedFiling

Itisgenerallyfeltthatthetaxagents'e-filing(TAeF)system is encroaching to the management of taxagents business, particularly the introduction of arigidworkgroupstructure.Thishascomplicatedthesystem and cause lot of confusion and problems.For example, there are cases where a tax agent isworkingfortwoormoretaxfirms.Therearealsosoleproprietorswhooperatetwotothreebrancheswiththehelpofexperiencedtaxstaff.

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The security issues, control requirements andprocedureofworkflowarethereforedifferent.Itwillbeahuge task for the IRB todesignasystemthatfits in the existing business arrangement of all taxagents.

The TAeF system does not allow the systemadministrator to prepare e-forms unless he isalso registered as a tax agent. In practice, systemadministrators are generally one of the senior taxprofessionalswhodoedite-Formsandsupervisee-filing.

The current setting allows anyone entering thesystem and filling up the form to send and e-file, thus creating potential non-authorised filingThereisconcernthatstaffcompletingthee-Borang,attachtheTaxAgentDigiCertmayaccidentallypress"hantar"insteadofsavingthee-Borang.

Other restrictions include the fact that the usercan only view the list of taxpayers' portfolio if thetaxpayers' profile were created by using the user'sown ID, The user cannot view the Status e-Borangif the taxpayer's profile was not keyed in using hisID. However, the user can still view the status ofthe taxpayer in e-Borang (Selia). In practice, theportfoliooftaxpayersiscreatedbythestaffandtheSupervisor cannot view theStatuse-Borangexceptthrough thee-Borang (Selia).However,where therearecross-reportingbystaff,thesystemwillbecomeahindrancetosupervision.

The Institutes propose that IRB should considerdisclosingthenecessaryITdetailssoastoallowthetaxpayers/taxagents / softwareserviceproviders toexport their information to the IRB system withouthaving to key in the data again. This would greatlyfacilitatee-filingandhelpmanyorganizationstooptfore-filing.AsIRBhasalreadyexperiencedre-keyingintakesupsomuchunproductivetimeandispronetoerrors.

The Institutes are also of the view" that the linearworkgroup organizations / structures should bemodified to facilitate administration. It should notfix the restrictions in assigning jobs and accessing

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taxpayers'files.SuchrightsshouldbegrantedtotheSystemAdministratorofthefirmwhowilldeterminethe assignment of the job and accessibility of thefile according the each firm requirement. A goodsystem should be flexible enough to cater for anyorganization structure within the taxpayers / taxagents firms.Thiscouldsolvea lotofproblemsfortheIRB.

The Institutes propose that access rights be re-designedintotwocategories:

Normal User — one who can register, performpreparatory work and fill up e-Form but cannotsubmitthee-form;

Authorized User — one who can register, performpreparatory work and fill up e-Form, view/edit alle-forms within the firm and online submit the e-form; The roles and access rights of the systemsadministrator and tax agent shall remain intactEXCEPT that the system administrator shouldbe allowed to assume the additional role as anauthorizeduser.

LHDNM:

Mesyuaratdimaklumkanterdapat3peringkatdalamstruktursistemTAeFsekarangiaitu;

(i) ejencukai(ii) penyelia(iii) staf

Fungsi utama penyelia ialah untuk mengujudkankawalan dalaman firma. Persatuan AkauntandimintauntukmemberikataputussamaadahendakmenggugurkanperananpenyeliadalamTAeFpadamesyuarat6Ogos2008.

Mesyuarat bersetuju untuk mengekalkan perananpentadbir sistem sebagai penyenggaraan sistemTAeF sahaja dan ejen cukai dinasihatkan supayatidak melantik pegawai yang senior dalam firmatersebutsebagaipentadbirsistem.

Berkenaan dengan permintaan ejen cukai supayasistem TAeF dibuka untuk membenarkan seorangejen cukai mewakili lebih daripada satu firma,

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mesyuarat dimaklumkan bahawa dalam sistemTAeF sekarang ini, sijil digital ejen cukai danjuga pengesahan penerimaan memaparkan namafirmayangdiwakilinya.Bagimembenarkan sistemmendaftarkan ejen cukai yang mempunyai lebihdaripada satu firma, perubahan struktur sistemyang besar perlu dibuat untuk membenarkanproses sedemikian. Perkara ini akan dibawa untukperbincanganlebihlanjutdenganpihakDigiCert.

Untuk menyelesaikan masalah ini, dicadangkansupaya menambah ruangan maklumat firma ejencukai yang menyediakan e-borang tersebut untukdiinput oleh ejen cukai seperti yang terdapat padaborangmanualsekarang.

Y.Bhg.Dato'PengerusimemintaPersatuanAkauntanmemberi pengesahan sama ada sistem TAeF bolehdibuka untuk membenarkan ejen cukai mendaftarlebih dari satu firma ejen cukai. Keputusan akandibuatsemasamesyuarat6Ogos2008.

2.2.4 Perkara-PerkaraBerbangkit

(i) LHDNM menyarankan supaya kerjasama perludiadakandiantarapenyediaperisiandenganPersatuanAkauntan untuk menjalankan ujian/semakan keatas ruangan,hadmaksimum tuntutandanvalidasisistem perisian berkomputer kecuali integrasi dariaspek teknikal yang memerlukan nasihat daripadaLHDNM.Denganinidapatmeminimumkanmasalahsemasa proses integrasi sistem perisian percukaianberkomputerkepadasisteme-FilingLHDNM.Prosesvalidasi ke atas sistem perisian berkomputer pihakpenyedia perisian tidak sepatutnya dijalankan olehLHDNM.

Persatuan Akauntan memaklumkan bahawa sisteme-Filing T/T 2007 tidak membenarkan pengisian kodperniagaansekiranyaruanganpendapatanperniagaantidakdiisi (tiadapendapatanperniagaan).Perkara iniakandisemakolehLHDNM.

Y.Bhg. Dato' Pengerusi memaklumkan bahawasebarang pindaan ke atas sistem e-Filing akandimaklumkandanpenyediaperisianperlumematuhisepenuhnya.

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(ii) Mesyuarat memaklumkan satu Helaian Kerja yangringkas akan disediakan bagi membantu pembayarcukaimengumpulkanmaklumatyangpatutsebelumpengisian online dalam sistem e-Filing. Dengan inidapat menjimatkan masa online memandangkansisteme-Filinghanyamembenarkan10,000penggunadalammasaserentak.

Persatuan Akauntan mencadangkan supaya borangbagi pembayar cukai yang mempunyai pendapatanpenggajian sahaja boleh dipermudahkan lagi.Dalam sistem percukaian di Singapura, hanya 4data diperlukan bagi cukai individu sementara lain-lain dokumen dan pengiraan cukai disimpan olehpembayarcukaisendiriuntuktujuanaudit.

Mesyuarat dimaklumkan bahawa belum tiba masalagi untuk mempermudah borang seperti amalanSingapura memandangkan terdapat maklumat-maklumatyangperludisalurkankepadaKementerianKewanganjikadiminta.Walaubagaimanapun,LHDNMakanmengambilmaklumcadanganini.

(iii) Penyedia perisian memberi maklum bahawa e-latihan ke atas integrasi sistem perisian percukaianberkomputer kepada sistem e-Filing LHDNM bagie-C dan e-R 2008 adalah lebih mudah berbandingdengantahunlepas.

Y.Bhg.Dato'Pengerusimenyarankansupayapenyediaperisian menumpukan perhatian ke atas e-C dalammasaduaminggu ini untukmemberimaklumbalaskepada jawatankuasae-latihan.Sasaran ‘Production’untuke-Cialah1Ogos2008.

(iv) Mesyuaratdimaklumkanbahawaduaperkarapentingtelahdilaksanakan:

(i) 1 Julai 2008 - skima berkenaan garis panduanpengintegrasian telah diberi kepada penyediaperisian

(ii) 15Julai2008-taliane-latihandibuka

Penyediaperisianmemaklumkanbahawakodruanganhanya dibekalkan untuk e-C sahaja tetapi tidaksemuaruangandibekalkan.AdalahdicadangkanagarLHDNM memberikan peraturan, garis panduan danprosedurpengintegrasian.

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Mesyuarat menjelaskan bahawa pihak LHDNMhanya menyediakan platform dan garis panduanpenggunaan dan bukannya membantu dalampembangunansistempenyediaperisian,sebenarnyatelah terdapat beberapa penyedia perisian berjayadalampengintegrasiansisteme-Filingdenganusahasendiri.

(v) Encik Mohammed Noor memaklumkan bahawaterdapat pembayar cukai dan juga ejen cukai yangmenggunakan borang nyata tahun kebelakanganuntuk melaporkan pendapatan tahun semasadengan membuat pembetulan sendiri pada ‘TahunTaksiran’ yang “pre-printed" atas borang. Keadaaninihanyadibenarkanbagikespembubaransyarikatsahaja. Walau bagaimanapun, pembayar cukaidinasihatkan supaya mendapatkan borang-borangtahunkebelakangandaripadacawanganatauborangPDFdarilamanweb.

Proses imbasan (forward capture) tidakmembenarkanpenggunaanborangtahunkebelakanganuntukcukaisemasa.

Y.Bhg.Dato'PengerusimemintaPusatPemprosesanmengemukakan nama ejen cukai yang berbuatdemikianuntuktindakanselanjutnya.

(vi) Isu-isu dan cadangan lain berhubung teknologimaklumat dalam memorandum bertarikh 14 Mei2008 dan juga isu-isu daripada penyedia perisianyang bertarikh 16 Julai 2008 akan dibincangkandengan lebih lanjut dalam mesyuarat IT Subworking Group (ITSWG) pada 6 Ogos 2008 nanti. Dua orangwakil persatuan akauntan dijemput hadir bersamadalammesyuarattersebut.

3.0 MINIT MESYUARAT WORKING GROUP LHDNM DENGANPERSATUAN AKAUNTAN DESIRE - BIL. 4/2008, SEPTEMBER12,2008

3.1 PerbincanganBerdasarkanMinitBil.3/2008

3.1.1 Timeline

(i) Mesyuarat dimaklumkan timeline telah disediakan dantelah dihantar kepada persatuan akauntan pada 5September2008.Persatuanakauntanmemintasupayapakejdansisteme-Filingdisiapkan lebihawalsupaya

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tarikh pembukaan talian e-latihan (01/12/2008) dantarikh pelancaran e-Filing (01/03/2009) dipercepatkanbagimembolehkanpihakpersatuanmempunyaimasayang lebihuntukmenyesuaikandiridengansisteme-Filing.Denganini,pengemukaanborangmelaluie-Filingdapat diawalkan bagi kes-kes pengiraan cukai yangmudahdanjugakes.

(ii) TuanPengerusimenyarankansupayapersatuanakauntanmemahami dan menyesuaikan diri dulu dengan e-latihan dan juga borang manual yang akan dihantarkepadapembayarcukaimulai1Disember2008secaraberperingkatbermuladengandaerah-daerahyang jauhdari bandar iaitu Sabah dan Sarawak. Tuan Pengerusimemaklumkanbahawaborangtidakbolehdihantarawalkepada pembayar cukai kerana terdapat sesetengahpembayar cukai akan mengembalikan borang nyatasebaik sahaja diterima walaupun belum mengetahuipendapatanbulanDisember.Keadaaninitelahberlakudalam tahun 2005 di mana terdapat pembayar cukaiyang mengembalikan borang nyatanya dalam bulanNovember sedangkan pegawai LHDNM belum diberipenerangan berkenaan dengan borang tahun taksirantersebut.

(iii) Tuan Pengerusi memaklumkan bahawa tarikhpelancaran e-Filing juga tidak dapat dipercepatkankeranaLHDNMterikatdenganjanjipembayaranbalikdalam satu bulan. Tambahan pula LHDNM perlumembuatpindaandanmemperbaikisistemyangadauntukmemastikantiadakesilapanyangakanberlakuselepas pelancaran kepada semua pembayar cukai.LHDNM telah belajar dari pengalaman tahun-tahunlepas di mana seolah-olah menggunakan penggunasistem e-Filing sebagai tempat ujian sistem. Walaubagaimanapun,LHDNMakancubamempercepatkantarikh e-latihan dan juga tarikh pelancaran e-Filingjikaboleh.

(iv) Mesyuarat dimaklumkan bahawa sudah menjaditradisi kebanyakan pembayar cukai mengembalikanborang dua atau tiga hari sebelum tarikh akhirpengemukaan sama ada secara manual mahupune-Filingwalaubetapaawalsekalipunborangdane-Filingtelahdisediakan.

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(v) Dr. Veerinderjeet memaklumkan bahawa kelewatanpengemukaan borang daripada ejen cukai bukandisengajakan tetapi adalah disebabkan masalahmemperoleh / mengumpul maklumat daripadapelanggan.Walaupunsetiapfirmamempunyaisasaransendiri tetapi susah untuk mencapainya sebabmasalah pengumpulan maklumat, penganalisisandan persetujuan daripada pelanggan. Kelewatanpengemukaan borang mungkin dapat dielakkansekiranyaproses-prosesberikutdipercepatkan:

(a) Penyediaanborangmanualdansisteme-Filing

(b) Penyedia perisian menguji sistem e-Filing danmembuat pengubahsuaian ke atas sistempercukaianberkomputer

(c) Ejen cukai membuat pindaan ke atas perisiansendiri

(vi) Tuan Pengerusi menyarankan agar penyedia perisiandan persatuan akauntan menguji talian e-latihan,belajar dan memberi maklum balas kepada LHDNMsupaya dapat menyesuaikan diri sebelum tarikhpelancarane-Filingyangsebenar.

3.1.2 RekaBentukBorangNyata

Mesyuarat dimaklumkan bahawa draf Borang B, BE, E,M dan P telah diserah kepada persatuan akauntan pada6 Ogos 2008 dan maklum balas telah diterima. Borangnyata yang muktamad akan diserahkan kepada persatuanakauntanpada31Oktober2008.

3.1.3 HelaianKerja

Mesyuarat mengesahkan bahawa Helaian Kerja yangdisediakanolehLHDNMadalahsebagaipanduansahajadanbukannyawajibdiisi.Perkara iniakandimaklumkankepadacawangan supaya tidak meminta Helaian Kerja daripadapembayarcukaisemasaauditmejatetapimemadaidengandokumensokonganlainyangserupa.Suratpengesahanjugaakandikeluarkankepadapihakpersatuan.

3.1.4 LamanWebBaru

Tuan Pengerusi memaklumkan RSS merupakan satubahagiandalamlamanwebbaruLHDNM.Maklumatdalamlaman web LHDNM akan disediakan dalam dwibahasa.Adalah dicadangkan 'Mail Box' iaitu salah satu bahagian

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dalamlamanwebbaruakandidaftarkankepadapersatuanakauntan dan pihak persatuan boleh membuat pilihanuntuk terus berdaftar atau tidak kemudian hari. SistemlamanwebbaruiniakandikendalikanolehJabatanKhidmatKorporat (JKK)dansebarangmaklumatbaruakandikemaskini dari semasa ke semasa oleh JKK. Dengan ini, adalahdijangka pengemaskinian maklumat dapat dibuat denganlebihcepat.

Dr.VeerinderjeetmengucapkanterimakasihkepadaLHDNMdengan memasukkan tiga Garis Panduan Operasi dalamlaman web. Ini adalah ke arah kejelasan dan ketelusanseperti saranan PEMUDAH. Tiga Garis Panduan Operasidalamlamanwebsekarangialah:

(a) Penggunaan Kredit Cukai Pendapatan SyarikatSebagaiTolakan

(b) Mengemukakan Anggaran Cukai Kurang DaripadaAmaun Minimum Yang Ditetapkan Di BawahSubseksyen107c(3)ACP1967

(c) PenghapusanKenaikanCukai

3.1.5 KesTahunKebelakangan

Tuan Pengerusi mengesahkan bahawa kebanyakan negaraluarmengamalkane-Filinguntuktahunsemasasahaja.Walaubagaimanapun, LHDNM akan cuba untuk mengekalkan e-Filingtahun2007selepase-Filing2008dilancarkansekiranyasistemadalahmembenarkan.Inikeranae-Filing2007dan2008menggunakan platform yang sama. Pembayar cukai adalahdigalakkan supaya menggunakan borang manual yang bolehdiperoleh daripada cawangan berbanding dengan borangPDFdisebabkanmasalahimbasankeatasborangPDF.Walaubagaimanapun,borangPDFyangsediaadadalamlamanwebtidakakandikeluarkan.

3.1.6 SlipPengirimanBayaran

Mesyuarat memaklumkan Slip Pengiriman Bayaran bagibayaranpenaltisubseksyen107C(10)tidakdapatdimasukkandalamBorangCkeranaiaakanmelibatkantambahanmukasurat. Tambahan pula, hanya lebih kurang 10% daripadapembayarcukaisyarikatyangakanmenggunakanslipbayaranini. Walau bagaimanapun, slip bayaran ini boleh didapatidari lamanwebdanakandimasukkandalame-Filinguntukkemudahanpembayarcukai.

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3.1.7 PlatformUntuke-Filing

Tuan Pengerusi mengesahkan bahawa platform e-Filingtidak akan berubah pada tahun ini setelah belajar daripengalamanlepas.

3.1.8 ManualPengguna

Mesyuarat dimaklumkan bahawa sistem e-Filing perludibangunkan dahulu sebelum manual pengguna dapatdisiapkan. Draf manual pengguna akan mula disediakandan diperkemaskan. Tuan Pengerusi menyarankan agarmanualpenggunadapatdisiapkanseminggusebelumtarikhpelancarane-Latihan.

3.1.9 Taliane-Latihan

Tuan pengerusi memaklumkan bahawa integrasi sistempercukaian berkomputer kepada sistem e-Filing LHDNMadalah secara satu dengan satu dan bukan secara pukal.Pihak persatuan dan penyedia perisian adalah dinasihatkanagarjanganmenggunakane-Latihansebagaie-Filingsebenar.Taliane-Latihanakanditutuppadasatumasananti.

3.1.10BorangNyataTidakDikeluarkanSemasaPengeluaranAm

(i) Mesyuarat dimaklumkan bahawa borang nyatadikeluarkan kepada semua pembayar cukai syarikatmemandangkan pengguna e-C adalah tidak ramai.AdalahdirancangBorangCtidakdikeluarkankepadapengguna e-C sekiranya mencecah sesuatu jumlahtertentu.

(ii) Borang B 2008 tidak dikeluarkan kepada penggunae-Filingmemandangkane-Btelahmencecah120,000bagitahuntaksiran2007.Suratpemberitahuantidakmengeluarkan borang akan dikeluarkan kepadapembayarcukai,begitujugakenyataanakbar.

(iii) Pihak persatuan mencadangkan supaya borangnyata tidak dikeluarkan kepada pembayar cukaiyang menjalankan perniagaan tetapi tidak layakdikenakancukai (selaindaripadakeskerugian)ataupembayarcukai sendiri yangmemaklumkankepadaLHDNM melalui surat tanpa mengisi Borang B.Dengan ini dapat mengelakkan pembayar cukaidaripada terpaksa membayar yuran kepada ejencukai walaupun beliau tidak layak dikenakan cukai.LHDNMakanmempertimbangkanisuini.

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3.1.11TaxAgente-FilingModule(TAeFSystem)

Modul e-Filing untuk tax ejen sedang dikemas kini dandijangkasiappada1Disemberbersamadengane-Bdane-BE.

3.1.12Proses Integrasi Sistem Perisian PercukaianBerkomputerkepadaSisteme-FilingLHDNM

TuanPengerusimemaklumkandalamsatumesyuaratdenganpenyediaperisian,adalahdipersetujuibahawadataskemaakan diberi kepada penyedia perisian sekiranya terdapatperubahan dari segi logik untuk membolehkan merekamengemaskinisistemperisiansendiri.

3.1.13RingkasanBorang

Satuborang/helaiankerjayangringkasakandisediakanuntukpengguna e-Filing yang tidak menggunakan perkhidmatanejen cukai. Tujuannya adalah supaya pembayar cukaimengumpulkan semua maklumat yang perlu sebelumpengisianonlinedalamsisteme-Filing.

3.2 Hal-hallain

3.2.1 PindaankeatasJadualPCBdanCP39

(i) TuanPengerusimemaklumkanbahawasatumesyuaratakan diadakan dengan pihak persatuan pada 26September 2008 bagi membentangkan cadanganpindaan ke atas Jadual PCB dan CP39 ekoran daripindaan bajet 2009 dan untuk mengatasi masalahdalam implementasi Jadual PCB terutama formulapengiraan PCB ke atas bonus. Pindaan terakhirJadualPCBadalahdalamtahun2004.ObjektifutamapindaaniniadalahagarjumlahPCBadalahbersamaandenganCukaiKenaDibayar.

(ii) LHDNM sedang dalam proses penyediaan e-PCBuntuk dimuatkan dalam laman web. Input platformakan diberi dan majikan boleh muat turun untukpenyediaan CP39. Majikan hanya perlu mengemaskini jumlah saraan. Adalah dicadangkan pada satumasananti,maklumatdari ringkasanakhirCP39 iniakanpre-populatedpadaC.P.8DBorangE.

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3.2.2 Pindaan Draf Borang B 2008 Berdasarkan MaklumBalasdaripadaMITBertarikh27September2008

(i) TarikhAkhirPengemukaanBorangE

TarikhakhirpengemukaanBorangEadalahdinyatakandalam Perintah Cukai Pendapatan (Penyata OlehMajikan)dantidaksepertiborangnyatalain.

(ii) C.P.8D

Mesyuarat dimaklumkan bahawa majikan yangmempunyai ramai pekerja adalah digalakkan untukmenghantar C.P. 8D ini dalam bentuk soft copy danformatsertaspesifikasiakandiberikemudian.

(iii) BahagianGBorangEAdanEC-ElaundanPerkuisitYangDikecualikanCukai

Persatuanakauntanberpendapatbahagian ini tidaksewajarnya dimasukkan dalam Borang E kerana iatidakakanmemberi kesankepadapengiraancukai.Adalah dicadangkan maklumat yang tidak digunapakaiolehLHDNMtidakdimasukkandalamborangagartidakmembebankanpihakmajikan.

Tuan Pengerusi memaklumkan bahawa semuamaklumatyangbolehdiperolehdalamborangnyatasamaadasecaramanualmahupunborangelektronikakan digunakan sepenuhnya oleh LHDNM dandisalurkankecawanganuntuktujuanaudit.

(iv) AmaunKasaratauBersihdalamBorangEAdanEC

Terdapatbeberapapendapatberkenaanisuiniiaitu:

(a) Borang EA dan EC sepatutnya menunjukkanjumlah kasar tanpa menolok sebarang elaunatau manfaat yang dikecualikan cukai keranatanggungjawab untuk menentukan pengenaancukai dan pengecualian cukai adalah terletakpada pembayar cukai sendiri. Tanggungjawabmajikan hanya melaporkan apa yang telahdibayarkepadapekerjanya.

(b) Borang EA dan EC sepatutnya menunjukkanjumlahbersihkeranakebanyakanpekerjatidakmengetahui peruntukan percukaian dan akanterus melaporkan pendapatan penggajiannyamengikut apa saja jumlah yang dipaparkan

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dalamBorangEAdanEC.Oleh itu,BorangEAdan EC sepatutnya menunjukkan jumlah yangdikenakan cukai sahaja untuk memudahkanpekerjayangtidakmenggunakanperkhidmatanejencukai.

(c) Elaun dan perkuisit yang dikecualikan cukaisepatutnya ditunjukkan di Bahagian B denganmelaporkan jenis elaun/manfaat, jumlahsebenardibayardanditolakdenganjumlahyangdikecualikan cukai memandangkan terdapatsesetengah elaun/manfaat dikecualikan cukaihanya untuk Tahun Taksiran 2008 sehingga2010sahaja.

(v) Persatuan akauntan juga berpendapat bahawamajikanyangmembuatkesalahandarisegipengiraanPCB tidak sepatutnya dikenakan kompaun, begitujugaBorangE.LHDNMseharusnyamemberipeluangdan pembelajaran cukai dahulu kepada pihakmajikan seperti amalan Jabatan Statistik dan tidakterus dikenakan kompaun. Ini memandangkan PCBbiasanya dikendalikan oleh kerani akaun di UnitAkaunyangtelahmemenuhipematuhanaudittetapididendaataskesilapanyangtidakdisengajakan.TuanPengerusi menyarankan supaya Jabatan Pematuhanmengambilmaklumisuini.

(vi) LHDNMakanmengambilmaklumcadangan-cadangandaripadapersatuanakauntan.TuanPengerusimemintapihakpersatuanmengkajisemulaBorangE2008versi10September2008danmemberimaklumbalaskepadaLHDNMdalamtempohseminggu.

3.2.3 MaklumBalasdariMITkeatasDrafBorangB,BE,MdanP2008

(i) InsideFrontCover

WenotethatItem3(b)statesthatthehelaiankerjamust be kept for 7 years for the purposes of taxaudit.Thisisquitemisleadingasithasbeenagreedin the previous operations dialogues between theIRBandtheprofessionalbodiesthattaxagentsandtaxpayersneednotusethehelaiankerjainpreparingtheir tax computations and hence need not keepthemfor7years.

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TheInstituteproposesthatthefollowingbeinserted(inredandinbold)inthethird(3)lineofitem3(b):

3(b) ....helaian kerja (daripada buku panduan atauyang disediakan oleh pembayar cukai/wakil cukai)yangdigunakanuntukpengiraan……

LHDNM:

PindaanakandíbuatkeatasBorangB,BEdanP.

(ii) In the past, there were instances where tax agentssubmitted passport numbers to apply for PINnumbers. However, when the filing deadline wasapproaching, the taxpayer informed that he hadrenewed his passport. Under such circumstances,tax agents are unable to submit the tax returnthroughe-filing.Taxagentsareadvisedtowriteintothe IRB requesting the officer-in-charge in the unitconcernedtoupdatethenewpassportnumberintothesystem.

The Institute hopes that the requirement of newpassportnumber(item8)willfacilitatee-filing.

The requisite passport details for spouse (item B7)are,however,notconsistentwiththatofFormM.

LHDNM:

RuanganbarudalamdrafBorangBdanBE2008iaitu"No.PasportSemasa"dan"No.PasportTerakhirDidaftarDenganLHDNM"akandimasukkandalame-Bdane-BEjuga.

(iii) DrafBorangP

Asforeigndividendisnolongertaxable,itemB2andB3shouldnolongerberelevant.

Page3:

WenotethatitemG8(requestformobilephoneno.)isnotrequiredinFormsB,BEandM.TheInstituteseesnoreasontorequestforsuchinformation.

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4.0 MINIT MESYUARAT WORKING GROUP LHDNM DENGANPERSATUANAKAUNTANDESIRE-BIL.5/2008,DECEMBER15,2008

4.1 Perbincangan Berdasarkan Minit Bil. 4/2008 dan isuberbangkitdaripadaMIA,MITdanMICPA

4.1.1 PreparatoryPlanforYearofAssessment2008(dated5September2008)

(i) e-FilingforTaxpayers

InviewthatY.Bhg.Dato’HasmahhasmentionedthattherewillbenofillablePDFFormwitheffectfromyearof assessment (YA) 2008 e-filing for taxpayers onlyon 1 March 2009 is TOO LATE. The Institutes havecommentedinthepreviousmeetingthatthelaunchingof e-filing programme on 1 March 2009 was too lateandthecommentwasnotminuted.

TheInstituteshaveoriginallyproposedalaunchdateof 1 December 2008 According to IRB’s timetable,the e-filing would only be available for testing on1 December 2008. The Institutes would insist thatthe e-Filing system must be launched much earlierthis year and would propose that the e-trainingenvironment be ready by 20 December 2008 ande-Productionenvironmentbelaunchedon15January2009.Thisistospreadoutthee-filingworkloadandprevent potential confusion or hickups. The IRBmust also ensure that proper Change ManagementProcesscontrolsareinplace.

LHDNM: MengikutcatatanminitmesyuaratBil.4/2008:

Perkarainitelahdicatatbahawapersatuanakauntanmemintasupayae-latihanbagie-Filingdisediakanlebihawaldantarikhpelancarane-Filingdipercepatkan.

(ii) “Tuan Pengerusi memaklumkan bahawa tarikhpelancaran e-Filing juga tidak dapat dipercepatkankeranaLHDNMterikatdenganjanjipembayaranbalikdalam satu bulan. Tambahan pula LHDNM perlumembuatpindaandanmemperbaikisistemyangadauntukmemastikantiadakesilapanyangakanberlakuselepas pelancaran kepada semua pembayar cukai.LHDNM telah belajar dari pengalaman tahun-tahun

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lepas di mana seolah-olah menggunakan penggunasistem e-Filing sebagai tempat ujian sistem. Walaubagaimanapun,LHDNMakancubamempercepatkantarikh e-latihan dan juga tarikh pelancaran e-Filingjikaboleh.”

Wakil persatuan akauntan memaklumkan bahawaharapanmerekadenganpenubuhanDesireiniagaartarikh pelancaran e-Filing dapat dipercepatkan.Sekiranya tarikh pelancaran masih 1 Mac 2009bermakna tiada apa-apa kemajuan berbandingdengantahunlepas.Objektifpihakpersatuanadalahsistempenyampaiandapatdiperbaiki,membolehkansemuaperkaraberjalanlancardanmembenarkane-Filingseawalyangmungkinbagimerekayangdapatberbuat demikian. Persatuan Akauntan bersetujukebanyakanpembayarcukaiakanmenungguhinggasaat-saatterakhiruntukmenghantarboranagmanualataupun e-Filing. Persatuan akauntan berusahauntukmendidikpelanggannyasupayamembekalkanmaklumatyangdiperlukankepadaejencukaiagare-Filingbolehdibuatseawalyangmungkin.

(iii) LHDNM memaklumkan bahawa modul e-Filingterbahagikepada:

(a) ModulIndividu(b) Tiadamasalah(c) ModulTAeF(d) Atas permintaan ejen cukai, modul TAef akan

dipindauntukmembolehkanseorangejencukaimendaftarlebihdaripadasatufirmaejencukai.

(iv) Tarikhpelancarane-Filingdirancangsepertiberikut:

(a) 15Jan2009untuke-Filingindividu(b) 1Mac2009untukTAef.

Walau bagaimanapun, pembayar cukai akandimaklumkan melalui laman web bahawa barayarnbalik akan diproses mulai 1Mac 2009. Talian e-Latihan akan dibuka pap 22 Disember 2009. Ujianprestasisistemtaliane-FilingakandimukaandenganpengawaiLHDNM.

(v) Y. Bhg. Dato’ Pengerusi memaklumkan bahawa‘batch processing’ seperti yang diminta tidak dapatdilaksanakanpadamasaini.

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Walau bagaimanpun, pembayar cukai akandimaklumkan melalui laman web bahawa bayaranbalik akan diproses mulai 1 Mac 2009. Talian e-Latihanakandibukapada22Disember2009.Ujianprestasi sistem latihan e-Filing akan dimulakandenganpagawaiLHDNM.

(vi) Pengarah JPH memaklumkan bahawa tujuanmengadakan Working Group Desire ini ialah untukmemudahkansemuapihakdanmelancarkanprosestetapi tidak semestinya mempercepatkan semuaproses. Beliau berpendapat bahawa persatuanakauntan mempunyai masa yang mencukupi untukmembuat e-filing iaitu tempoh 2 bulan dari tarikhpelancaran 1 Mac 2009. Persatuan akauntansepatutnya membuat persediaan/persiapan yangsewajarnyadahuludalambulanJanuaridanFebruaridanbukannyaterusmembuate-filetanpapenyediaanakaundansebagainya.

(vii) Wakil persatuan akauntan berpendapat bahawasekiranya talian e-Latihan boleh dibuka pada 22Disember 2008, sebarang kesilapan sepatutnyadapatdiatasidalamtempohmasasatubulan.Beliauberpendapat tidakperlumenunggusehingga1Mac2009sekiranyasistemtelahsiapdibangunkan.

(viii) Y. Bhg. Dato’ Pengerusi memaklumkan daripadapengalamanlepas,LHDNMakanmenghadapimasalahaduan atas kelewatan pemprosesan pembayaranbalik terutamadaripadapembayar cukai yang telahbersara.OlehituLHDNMdalampertimbanganuntukmempercepatkantarikhpelancarane-Filing individuyang meletakkan syarat pemprosesan hanya akanbermula1Mac2009.

(ix) PengarahJTMmemaklumkanbahawasisteme-Filingperlu dipinda setiap tahun selaras dengan pindaanakta. Di samping itu juga penambahbaikan dibuatsupaya sistem lebih mudah digunakan.Sebagaicontoh, Helaian Kerja HK-3 yang akan dimasukkandalamsisteme-Filingkaliinimemerlukanperubahankasar ke atas sistem. Pembayar cukai hanyadikehendaki menyenaraikan dividen yang diterimadalam HK-3 tetapi tidak perlu menghantar baucerdividenkecualijikadimintasemasaaudit.Iniadalahkearahmemudahkanproses.

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(x) En. Keegan mendakwa bahawa mesyuarat IT Subworking Group tidak diadakan kebelakanganini dan mereka tidak mengetahui perkembanganpembangunan sistem e-Filing tahun ini dan jugatiada idea berkenaan perubahan yang perlu dibuatdalamtempohmasayangsingkatberbandingdengankelonggaranmasayangadapadaLHDNM.

(xi) Pengarahe-Servicesmemberitahusemasamesyuaratpada6Ogos2008,penyediaperisianmeminta‘batch processing’ yang mana telah diputuskan tidak dapatdilaksanakantahunini.Walaubagaimanapun,sisteme-Filing membenarkan integrasi sistem perisianpercukaian berkomputer kepada sistem e-FilingLHDNMyangmanatelahberjayadilaksanakanolehbanyakpenyediaperisiansebelumini.

(xii) PengarahJPHmenyarankanagarwujudnyakerjasamadi antara pihak penyedia perisian dan JabatanTeknologi Maklumat supaya sentiasa berhubungdi antara satu sama lain untuk mengetahuiperkembanganterkini.

(xiii) Pengarah JTMmenjelaskan bahawapihak JTM tidakdapat memaklumkan kepada penyedia perisiankesemuaperubahandari semasake semasakeranaLHDNM sentiasa membuat pengubahsuaian danpenambahbaikan semasa proses UAT dijalankan.Sekiranya LHDNM berbuat sedemikian, penyediaperisianperluturutmembuatpengubahsuaiansetiapkaliLHDNMmembuatperubahan.

(xiv) En. Keegan memberitahu bahawa mereka terjeratdi antara LHDNM dan ejen cukai. Beliau tidakdapatmembuatperancangan,pembangunansistem,mahupun berkomunikasi dengan pelanggannyatermasuk pembayar cukai berkenaan persoalane-Filingbuatmasaini.

(xv) Dr. Veerinderjeet memberi perspektif yang objektifberkenaanisue-Filingtahunini.BeliauberpendapatbahawapihakpenyediaperisiansepatutnyabersyukurkeranaLHDNMtelahcubamempercepatkanprosestahunini.Berbandingdenganpihakpenyediaperisian,ejen cukaiperlumembuatbanyakperkaradari segiperuntukan undang-undang dan juga perubahanbaru modul TAef. Penyedia perisian sepatutnya

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faham bahawa LHDNM perlu menjalankan pelbagaiujian dan memperkemas kini sistem yang adasebelumdapatkemukakankepadapihakluar.Selainitu, terdapat beberapa isu teknikal yang belumdiwartakan lagi walaupun telah diumumkan semasabajet.Dr.Veerinderjeetmenyarankanagarpenyediaperisianmengemaskinisistemperisianberkomputersendiriselepaspembukaantaliane-Latihanpada22Disember tahun ini yang mana adalah lebih cepatberbanding tahun lepas. Adalah diharap sistempenyampaian dapat diperbaiki lagi tahun depantetapi adalah tertakluk kepada pindaan bajet danjugatarikhbajet.

(xvi) Y. Bhg. Dato’ Pengerusi memaklumkan berkenaanevolusie-Filingsemenjakdiperkenalkandalamtahun2005yangmana telahmelaluibeberapaperubahansehinggakiniekorandarimaklumbalasyangditerimadaripada pengguna dan pembayar cukai. LHDNMakan cuba meminimumkan masalah yang timbuldan persatuan akauntan serta penyedia perisiandigalakkan untuk berkomunikasi dengan LHDNMuntukmemberimaklumbalas.

4.1.2 TAef

Based on IRB proposed plan, e-training environment fore-filingwillbereadyby1December2008.Willthetrainingenvironmentbereadyontime?HastheIRBcommunicatedwith the service providers on the developments muchearlier?Theserviceproviderswillneedtimetodevelopandadjust their software so that the tax agents can use thesoftwaretoteston1December2008.

WithreferencetotheWorkGroupStructureoftheTAef,ithasbeenagreed in thepreviousmeeting that the IRBwillchange the current structure. The Institutes would like toenquirehowthenewstructurelookslikeandwhencanthetaxagentsbeallowedtotestthenewstructure?

LHDNM: Mesyuarat dimaklumkan bahawa talian e-Latihan tidak

dapat dibuka pada 1 Disember 2008 tetapi akan dibukapada 22 Disember 2008. Pakej e-Latihan telah hampirsiap sekarang cuma memerlukan sedikit pindaan danpenambahbaikan. UAT dalaman telah dijalankan sekalisebelumini.e-Latihanpada22Disemberiniadalahyangtelahlengkaptermasuke-Filingindividudanejencukai.

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Salah satu pertukaran struktur semasaadalah satu lesenejen cukai boleh mewakili banyak firma. Diharap tiadapertukaranlagipadatahundepan.

4.1.3 BacklogCases

(i) Cessationone-filingfor2007

In the last meeting, we were informed that theIRB will keep the e-filing for at least two (2) years.However, we note that the IRB has issued a pressrelease on 10 October 2008 notifying that thee-Filing system for Form e-B 2007, e-BE 2007,e-M 2007, e-P 2007, e-E 2007, e-C 2007 and e-R2007 will cease operation permanently from 31October2008.TheInstitutedwouldliketoknowwhythereisachange.TheInstituteshopethatinfuture,therewillbenowithdrawalofwhathavebeenagreedinthemeetingbyIRBwithoutpriorconsultationwiththeprofessionalbodies.

LHDNM: Mesyuaratdimaklumkanbahawa‘thespiritofe-Filing’

adalah untuk kes Sistem Taksir Sendiri iaitu bagisesiapa yang membuat e-Filing pada atau sebelumtarikh pengemukaan. Jika borang diterima selepastarikhditetapkan,taksiranformalakandibuat.

Mesyuarat juga dimaklumkan bahawa dalammesyuarat yang lepas, LHDNM cuma mengatakanakan cuba mengekalkan e-Filing untuk 2 tahuntetapi terpaksa ditutup kerana terdapat perubahanstruktursistem.

(ii) Dr.Veerinderjeetmenyuarakansepatutnyapersatuanakauntan dimaklumkan terlebih dahulu sebelumkenyataan media dikeluarkan dengan mengatakanalasan e-Filing ditutup supaya mereka dapatmenyalurkan maklumat ini kepada ahli persatuan.Beliaumenyarankansupayabekalanborangkosongada di semua cawangan sekiranya e-Filing ditutupselepas tarikh pengemukaan. Beliau memberitahuterdapat kes di mana ejen cukai meminta borangmanual Cawangan Johor Bahru tetapi diberitahutiada borang manual dan diminta menggunakanborangelektronik yangmana telahdikeluarkandarilamanwebLHDNM.

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(iii) Pengarah JPH memaklumkan bahawa keadaan inisepatutnya tidak berlaku kerana semua cawangandibekalkandenganborangkosong.Terdapatbeberapaalasan di mana borang kosong tidak dikeluarkankepadaejencukaiataupembayarcukaiiaitu:

(a) Pembayar cukai meminta borang dalam bulanFebruariatauMacsedangkanborangpengeluaranam adalah dalam proses penghantaran padawaktutersebut(kecualipembayarcukaibaru).

(b) Ejen cukai meminta borang kosong dalamkuantiti yang banyak tanpa memberikan namapembayarcukaiyangdiwakilinya.

Walau bagaimanapun, JPH akan menyiasat keadaansebenaryangberlakudiCawanganJohorBahru.

Tindakan:LHDNM(JPH)

4.1.4 PDFReturnFormsforBack-LoggedCases

ThefillablePDFreturnformwillnotbeissuedafter2008.Forallbacklogcases,theoriginalprintedreturnformsmaybeobtainedfromIRBbranchesandcompletedmanually.TheInstituteswouldliketoclarifyfromIRB,whetherPDFreturnforms,eitherdownloadedfromIRB’swebsiteorgeneratedfrom tax software systems, can be used for filing of allbacklog cases, so long as they are printed in accordancewithspecificationsasrequiredbytheIRB.

LHDNM: Mesyuarat dimaklumkan keputusan daripada Dato’ KPE

adalah Borang PDF tidak boleh digunakan mulai tahuntaksiran 2008 bagi pembayar cukai selain syarikat,koperasidanbadanamanahdan2009bagipembayarcukaisyarikat, koperasi dan badan amanah. Pengarah JabatanPemprosesanmemaklumkanbahawakualitiimbasanborangPDF telah ditunjuk kepada persatuan akauntan semasamesyuaratlepasyangdiadakandiPandanIndah.TerdapatBorangPDFyangseolah-olahadalahmengikutspesifikasitetapiterdapatperbezaandarisegimargin.

Penggunaanborangmanualadalahdigalakkan/diutamakankeranatiadamasalahimbasanberbandingdenganBorangPDF di mana darjah kejayaan imbasan adalah sangatrendah. Pemprosesan Borang PDF adalah lambat danterdapat banyak kes tunggakan borang PDF di PusatPemprosesansekarangini.

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Bagaimanapun, penggunaan borang PDF untuk tahun-tahunsebelumnyaadalahdibenarkantetapiperlumengikutspesifikasicetakanyangtelahdinyatakan.

4.1.5 Compound on Non-Filing of Form E for DormantCompany

The Institutes have received many calls from membersconcerning the IRB recent exercise to issue compoundnoticetocompaniesfornon-complianceoffilingFormEforprior years, includingdormantcompanies. Thishascausedsome strong reaction as many tax agents/taxpayers weretakenabackandareoftheviewthattheywereunnecessarilyburdenedbythebureaucracyofIRB.AlthoughtheInstituteshadraisedthisissueduringthelasttwooperationsdialoguesand the IRB had agreed that if the company is indeed adormantcompany,thecompoundnoticewillbewithdrawn,ithasnotbeenminuted.

The Institutesunderstandthat IRB isclearingupthebacklog cases, but such exercise would take up a lot of timeboth from the professionals to write to the IRB informingthestatusoftheirclientsandIRBonreviewingthecasesofappeal. In view of the circumstances the Institutes wouldlike to discuss with IRB to find an amicable solution toresolvethismatterinthemostefficientmanner.

(i) Persatuan akauntan ingin mendapatkan penjelasansama ada borang perlu diisi dan dihantar setiaptahundalamkeadaanberikut:

(a) Syarikat baru yang masih dorman serta tiadapekerja. Walau bagaimanapun, No. E telahdijana secara automatik semasa pendaftaranNo.rujukanC.

(b) Syarikat telah lama dorman dan tiada pekerjasertatidakpernahterimadanhantarBorangE

(c) Syarikat telah mula beroperasi tetapi tiadapekerja

(ii) Persatuan akauntan juga inginkan kepastian samaada:

(a) Syarikat dorman yang telah menerima notiskompaunhanyaperlumemaklumkancawanganLHDNM melalui surat atau memerlukan buktilain dan tidak perlu mengisi Borang E setiaptahun.

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(b) SyarikatdormanyangmenerimaBorangEperlumenghantar surat makluman, isi Borang E dantandatangantetapitiadasebarangmaklumat.

(iii) PersatuanakauntanjugamendakwabahawaterdapatkesdimanaejencukaitelahmembalassuratLHDNMdenganmemberimaklumatbahawasyarikattersebutadalah dorman tetapi LHDNM masih menghantarBorangEbeberapatahununtukdiisi.

(iv) Dr.Veerinderjeetmenyarankanagarsuratperingatandikeluarkan terlebih dahulu sebelum surat tawarankompaun.

(v) PengarahJPHmemaklumkanbahawaayatpadasurattawaran kompaun adalah mengikut perundangan.Beliau juga berpendapat ayat tersebut adalah agak‘keras’ dan dalam persetujuan/pertimbangan Dato’KPEuntukmembuatpindaan.

(vi) LHDNM memaklumkan surat tawaran kompaunhanyadikeluarkanbagikesdimanaBorangE telahdikeluarkantetapitidakdikembalikanolehpembayarcukaisehinggabulanSeptember2008.

(vii) Pada kebiasaannya LHDNM akan menerima alasanbahawa syarikat adalah dorman walaupun melaluisurat sahaja. Kemungkinan terdapat cawanganLHDNM yang meminta dokumen tambahan keranatidak pasti sama ada syarikat tersebut betul-betuldormanatautidak.

(viii) Borang E perlu diisi setiap tahun bagi kes-keskompaun mengikut amalan sekarang. Kes tersebutakan dianggap tertunggak dalam sistem jika tidakberbuatdemikian.

(ix) Mesyuaratmemaklumkanbahawa:

(a) Sekiranya syarikat dorman tidak menerimaborangdariLHDNM,inibermaknastatussyarikatmasihditandakan‘NR’dalamsistem.BorangEtidakperluisidandikembalikankeLHDNM.

(b) Syarikat yang menerima borang perlumengembalikannya ke Pusat PemprosesanPandanIndahwalaupunstatusadalahdorman.

(x) Y. Bhg. Dato’ Pengerusi memaklumkan bahawakenyataan media berkenaan dengan kes tawarankompauntelahdikeluarkanpada4Disember2008.

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(xi) Pengarah Jabatan pemprosesan menyarankan agarmenambah ruangan “dorman” dalam e-E 2008 jikasempatdanbersesuaian.

Tindakan:LHDNM(JPH/JTM)

(xii) Mesyuaratdicadangkandenganbeberapacarauntukmengendalikankesdormaniaitu:

(a) Suratmaklumansyarikatadalahdorman tanpamengisiBorangE

(b) Kembalikan Borang E dengan catatan dormandantandatangan

(c) Akaun ringkas seperti yang dikehendaki olehSuruhanSyarikatMalaysia.

Mesyuarat memutuskan arahan pengendalianBorangEakandikeluarkankepadasemuacawanganberkenaandenganisuyangdibincangkantadidengansecepat yang mungkin. Persatuan akauntan akandimaklumkan melalui surat berkenaan keputusanyangdibuat.

4.1.6 Lampiran

Taxpayers/tax agents are informed that they can preparetheworkingpapersintheirownformatandneednothaveto complete and file the Helaian Kerja. What about theLampiran? The Institutes would like to confirm that thesame rule applies, i.e. the taxpayers/tax agents can alsoprepareinLampiranintheirownformat.

LHDNM: “LampiranA1sehinggaB5”dalamBukuPanduanBorang

Cadalahserupadengan“HelaianKerja”bagiBorangB,BEdanlain-lain.Olehitupembayarcukaiadalahdibenarkanuntuk menyedia kertas kerja mengikut format masing-masing seperti surat kebenaran yang telah dikeluarkanpada24Oktober2008.

Walau bagaimanapun, “Lampiran Tambahan” yangmerupakan sebahagian daripada borang perlu disediakanmengikut format yang ditetapkan. Contoh lampirantambahanyangperludisediakanialah:

(a) maklumatisterisekiranyamelebihiseorang(b) pendapatantahunkebelakangan(c) pendapatanperniagaansekiranyamelebihisatubagi

kesperkongsian(d) Maklumatahlikongsisekiranyamelebihi8.

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4.1.7 TaxReturnForms

(i) TaxAgentsDeclaration

(a) Currently tax agents are required to obtainauthorisation via Form CP55 from taxpayer tosubmit tax return electronically under Section152A(5)(a). Such approval must of course beobtained prior to the preparation of the taxreturn. Section 152A(5)(d) requires the taxagent to obtain the taxpayer’s signature aftersubmissionviae-filing.Insteadofmovingtowardpaperless, simple and efficient filing, this hascreatedextraproceduresandinefficiencies.TheInstitutesareoftheviewthate-filingshouldnotrequireany ‘manual signature’by the taxpayer(or anyone else for that matter), the DigiCertof the party submitting the return would besuffice.

Inreality,taxagentsfaceddifficultiesinobtainingsignatures,particularlyinthecaseofexpatriatesthis is partly due to the frequent travelling(e.g. secondment to other countries, leavingMalaysia permanently, etc.) partly due to thetaxreturnalreadybeenfiledandtaxpayersarereluctanttosign.

(b) Taxpayersarerequiredtosignmanuallyontheprinted final copies of the tax return forms atthebottomofAkuanEjenCukaiUntuke-Filing.Thishascausedsomeconfusion, inparticular,itsplacement(rightafterthedetailsoftheTaxAgents)issignificantlymisleadingasitappearsthatthetaxagentshouldsignaftermakingthedeclaration although it is indicated that thetaxpayeristosignattheplacemanually.

TheInstitutesareoftheviewthate-filingshouldnotrequiremanualsignatureandthelawshouldbeamended.Thetaxagentsshouldobtaintheapprovaloftaxcomputationfromtaxpayersbeforefilingratherthanafterfiling.

Pending the change of law, it is suggested that both thetaxpayer’s authorisation (Form CP55) and tax agent’sdeclaration under Section 152A(5) be included in thetax return forms and both parties have to sign before

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submissiontoreduceduplication.Theindicationof“draft”in the title bar for printout before submission should beremoved.

The preferred solution is tax agents are allowed to obtaintherequisitestandingauthorisation(ratherthanonayearlybasis) by incorporating the wording Form CP55A into theirLetterofAppointment.The indicationof“draft” in thetitlebarforprintoutbeforesubmissionshouldberemoved.Thiswill facilitate the work of taxpayers/tax agents in view oftheir tight schedule.The Institutesareof theview that theauthorisationfromtaxpayers(viaCP55),whetherannuallyorotherwise, and theapprovalof tax submissions, shouldbelefttothetaxagentstoresolvethemselves.

LHDNM: LHDNMakanmengkajiisuinidanmemaklumkanpersatuan

akauntankemudian.

4.1.8 FinalisationofTaxReturnFormsforYearofAssessment2008

The Institutes would like to enquire the status of the taxreturn forms for year of assessment 2008. Based on theplan as proposed by the IRB, the professional bodiesweretoreceivefromtheIRBthefinaldrafttaxFormsafterincorporatingallthe2009Budgetchangesbeforefinalisingit by 31 October 2008. Thereafter, they will be sent toprinterforprinting.Thereturnformwillthenbesenttothetaxpayersby1December2008.

It is already December now and the professional bodieshaveyet to receive the finaldraft forms.The Institutesareconcerned that if we fail to send out the forms on time,coupledwithnofillablePDFreturnavailablethisyear,therewillbeaheavyburdenonthetaxagentsandIRBtocopewiththefilingofnewreturnforms.Thesamedifficultiesthataroseearlierthisyearmayoccurinearly2009,thenalloureffortsduring the year will be wasted. The Institutes had hopedthat, together with the IRB, we would be working towardslaunchingthee-filingsystembyJanuary2009.

LHDNM: Borangmanual (kecualiBorangE2008) telahdisediakan

dalam bulan Oktober tetapi terlepas pandang untukdikemukakan kepada persatuan akauntan. Walaubagaimanapunsampelborangyangmuktamadtelahditerimakini.

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4.1.9 DraftBorangEfor2008(Revised)

Although the Professional Bodies are required to submitwritten comments after the meeting, the Institutes areof the opinion that minutes of the meeting should becomprehensive in covering all comments made during themeeting.TheminutesoftheFilingProgrammeWorkingGroupMeeting05-2008(heldon12September2008)didnotreflectthecommentmadebytheprofessionalbodies.

TheInstitutesareoftheopinionthatthedetailsrequestedin the Form E are redundant. The IRB already has theinformationinthedatabase.

TheInstituteshadsubmittedaJointCommentontheDraftForm E (Revised) on 23 September 2008. The Instituteswould like to enquire the status of the Form. Does IRBagree to the comments made and amended the Formaccordingly?

(i) Mesyuaratdimaklumkanbahawapersatuanakauntantidak bersetuju dengan Bahagian B Borang E 2007– Maklumat Mengenai Potongan Cukai Di BawahKaedah-kaedah Cukai Pendapatan (PotonganDaripadaSaraan)1994atasalasan:

(i) Kesuntukan masa bagi majikan kerana sistembelum sedia ada untuk memberi maklumatsecarabulanan.

(ii) MaklumatBahagianBinisepatutnyatelahsediaadadalamdataLHDNMkeranamaklumatyangdikehendakiadalahsamadenganBorangCP39.

Denganitu,Dato’KPEtelahmemberikonsesiuntukhanyamengisijumlahtahunansahajabagiBorangE2007.

(ii) Borang C.P. 8D dimasukkan dalam Borang E 2008sebagaigantikepadaBahagianB2007ataspermintaanpersatuanakauntanmelaluisuratbertarikh27Ogos2008.DrafpindaanBorangEyangmemasukkanC.P.8D (versi 10 September 2008) telah diberi kepadapersatuanakauntandalammesyuarat13September2008.

(iii) C.P. 8D merupakan ringkasan Borang EA di manamaklumatdalamBorangEAbolehdimasukkandalamC.P.8D.BorangEAtidakperludihantarkeLHDNM

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sejak Sistem Taksir Sendiri dilaksanakan. Oleh itudengan adanya maklumat padaBorang C.P. 8D,diharapmaklumatiniakanpre-populateddalamsisteme-Filing pada masa akan datang bagi memudahkanpekerjamemfailborang.

(iv) Mesyuarat memutuskan untuk membuat pindaanberdasarkandrafBorangE2008yangdikemukakankepadapersatuanakauntanpada4Diesember2008sepertiberikut:

(i) RuangF–ESOSdanRuangK–PotonganzakatdigugurkandaripadaC.P.8D

(ii) SenaraiElaun/perkuisit/pemberian/manfaatyangdikecualikancukaidigugurkandariBorangEA

(iii) Ayat “Butiran lanjut di muka surat sebelah”digugurkandariBahagianGBorangEA.

(v) Mesyuarat juga memaklumakn senarai Elaun /perkuisit / pemberian / manfaat yang dikecualikancukai adalah sebagai panduan kepada majikansahaja.Walaubagaimanapun,majikanperlumemberimaklumatlengkapsemasaaudit.

(vi) Jumlah“Elaun/perkuisit/pemberian/manfaatyangdikecualikan cukai” dalam borang C.P. 8D adalahsamadenganjumlahdalamBahagianGBorangEA.

(vii) Jumlah ESOS pferlu dimasukkan dalam ruanganB1 Borang EA di bawah tajuk perkuisit. Pekerjaperlu memberi maklumat lengkap semasa auditmemandangkan ruangan ESOS telah dikeluarkanpadaBorangC.P.8D.

(viii) Format softcopy Borang C.P. 8D belum diputuskanlagi dan akan disediakan oleh JTM. Wakil penyediaperisian akan dimaklumkan dalam masa yangterdekat.

Tindakan:LHDNM(JTM)

4.1.10Witheffectfromyearofassessment2009,directorfeesareassessable on receipt basis. However, the company willcharge to the account and claim a deduction in the yearwhenitisaccrued.ShouldthedirectorfeesbereportedintheEAFormwhenitisaccrued?

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Ifso,theEAFormwillnotbeareflectionofthechargeableremuneration of the director. This will cause confusionto taxpayers as not all of them are well-versed withtaxation law. Ifnot, therewillbeamismatchbetweentheamountchargedtothecompany’saccountandtheamountdisclosedintheFormE.

The Institutesareof theopinionthatdirector feesshouldnot be disclosed in the EA Form in the year it wasaccrued.

LHDNM: Yuran Pengarah perlu dilaporkan di Borang EA dalam

tahuniaditerima.

4.1.11Proposed Scheduler Tax Deductions (STD) Rules/Guidelines

TheInstituteshavesubmittedJointCommentsontheaboveon28October2008andwouldliketoenquiretheprogressofthematter.TheInstituteshaveobtainedfeedbackfrommembers that IRB has begun the road show on the newSTD. When the members enquire more details about theSTD,theyweretoldtorefertoMIT.

TheInstituteswouldliketoremindtheIRBthatthePayrollServiceProviderswillneedtoupdatetheirPayrollsoftwarefor the new STD rules. We would like to enquire whethertheyweregivenanyinformationordetailsontheproposedchanges. As the new STD rules will be applicable fromJanuary 2009 salaries, any further delay in the finalisationwillresultinimplementationproblems.TheInstituteswouldsuggestthatthedetailedchangesbeannouncedbefore20December2008andpostedontheIRBwebsite.

LHDNM: Kaedah-kaedah Cukai Pendapatan (Potongan daripada

Saraan)(KKCP)Pindaan2008danJadualPCB(Pindaan)2009belumdiwartakan lagi.Bagaimanapun, sebagaipersediaanawal majikan, LHDNM telah mengadakan beberapa siritaklimat kepada cawangan, majikan dan juga penyediaperisian. Logik keperluan program juga telah diberikan.SalahsatudaripadapenyediaperisiantelahmembangunkanaplikasisistemnyadanmendemonstrasikankepadaJTM.

Mesyuarat dimaklumkan sekiranya PCB baru ini tidakdapatdilaksanakandalambulanJanuari,Dato’KPEsecaradasarnyatelahbersetujuuntukmembenarkanpenggunaan

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Jadual lama selama 3 bulan. Y. Bhg. Dato’ Pengerusimemaklumkan bahawa satu mesyuarat akan diadakanbersama persatuan akauntan dan penyedia perisian padapertengahan bulan Januari 2009 untuk memaklumkan isuini.

Tindakan:LHDNM(JPH)

(i) Persatuan akauntan membangkitkan isu di manamajikandikenakanpenaltikesalahanpengiraanPCB.Beliau berpendapat LHDNM sepatutnya tidak terusmengenakan penalti tetapi cuma mengeluarkansuratamaranbagikesalahanpertama.Dicadangkanagar LHDNM membezakan tahap kesilapan semasapenentuan pengenaan penalti. Kesilapan pengiraanPCB yang bukan disengajakan sepatutnya tidakdikenakan penalti. Sebagai contoh, kesilapanpengiraan PCB ke atas bayaran bonus, yuranpengarah dan elaun yang agak rumit sepatutnyatidakdikenakanpenalti.Adakalanya jumlahpenaltilebih tinggi daripada amaun PCB. Majikan hanyamerupakan ejen yang membantu untuk mengutipcukaibagipihakLHDNM.

(ii) LHDNM memaklumkan bahawa majikan akanmendakwabahawasetiapkesalahanadalahkesalahanpertama kerana kerani akaun selalu bertukar-tukar.PenaltikeataskesalahantidakakanmengambilkiraamaunPCByangsebenar.KesilapanyangmelibatkanPCB terlebih potong tidak akan dikenakan penalti.JabatanPematuhandimintamengumpulkanmaklumatmengenai jenis kesilapan yang dijumpai semasasaudit dijalankan. Isu ini akan dibincangkan semasadialogoperasiyangdijadualkanpadaFebruari2009.

Tindakan:LHDNM(J.Pematuhan)

4.1.12Issues on Changes Management Procedures andTesting

TheissueofChangeManagementProcessiscritical.ItmustbeemphasisedthattheInstituteshadpreviouslybroughtupingreatdetail,problemswiththeprocessandthattheIRBhadagreedtoproperChangeManagementProcesscontrolsduringthe6August2008meetingwithsoftwareproviderschaired by Dato’ Dr. Shukor and thee representatives ofDigiCertwerepresent.

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TheInstitutesareconcernedwiththeChangeManagementandTesting issuesas raisedby somesoftware serviceproviders.This has raised doubts on the consistency between theTesting environment and the Production environment. Theserviceprovidersneedtobeeupdatedonallchangesmadeto the e-filing system. Otherwise this may cause similartechnologicalissuesthatwerefacedatthebeginningofthisyear. The Institutes would like to suggest that the mattersbeaggressivelypursuedso that the tax filingsystemcanbeimprovedandlaunchedbyJanuary2009.

(i) En. Keegan mendakwa integrasi sistem perisianpercukaian berkomputer kepada sistem e-FilingLHDNM mudah terjejas di mana sedikit pindaanakan menjejaskan sistem yang telah dibangunkan.Daripada mesej yang diterima pada 21 September2008, beliau dapati sekurang-kurangnya terdapat3 pindaan bukan setakat kesilapan tetapi dari segi‘business rule changes’.Beliaumendapatisistemterputussemasa ujian dijalankan, begitu juga sebahagiankerja yang telah dapat dijalankan kadang-kadangtergendala. Beliau telah memaklumkan pasukan ITmelaluie-meldandidapatisebahagianmasalahtelahdiselesaikan tetapi tiada sebarang maklum balasditerimadaripadamereka.

(ii) En. Keegan memaklumkan bahawa sesetengahpindaan ini akan memberi kesan kepada penggunasistem. Contohnya pada 25 September 2008, duadaripada empat kod bagi potongan dua kali yangsalah telah dikeluarkan. Jadi beliau berpendapatperubahan sebegini akan mudah memutuskan/menggangguprosesintegrasi.

(iii) PengarahJTMmemaklumkansistemakandipindajikaterdapat kesilapan. Beliau sedar sekarang ini perlumemaklumkan penyedia perisian sebarang pindaaanyangdibuatkeranamerekasangatbergantungkepadalogikyangdisediakanolehLHDNM.

(iv) En.Keeganmendapatiterdapatperubahanpadacarapembangunan integrasi. Contohnya cara integrasiRK-TdanRK-SadalahberbezadengancaraintegrasiBorang C dan R walaupun nombor ruangan adalahtetap. Ini akan mendatangkan masalah kepadabeliau. Beliau mendakwa data skrin dan integrasiyanglengkaptidakdibekalkan.

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(v) Y.Bhg.Dato’Pengerusimemutuskanbahawasebarangpindaanperlumemaklumkanpenyediaperisian.BeliaujugamengarahkansupayamengadakanmesyuaratIT Subworking Group pada 30 atau 31 Disember 2008untukmembincanglebihlanjutberkenaanisuini.

Tindakan:LHDNM(JTM)

4.1.13Form CP204 - Non-resident Branch/PermanentEstablishmentProvidingServices

Item3(i)(f)of theminutesofOperationsDialogueheldon23 February 2000, states that withholding tax paid underSection 107A will be allowed to offset tax liability arisingfromNoticeofInstalmentPayments.IRBfurtherconfirmed(item 5 of the minutes of Operations Dialogue held on15April2002) thatwhere thesourceof incomeofanon-resident company is fully subjected to withholding tax,thecompanyisnotrequiredtofileFormCP204.However,the company shall attach the following documents whensubmittingFormC:(a) FormCP204previouslysubmitted(b) Letterfromthepayerthatwithholdingtaxhasbeen

deductedfromthecontractpayments;and(c) Confirmationfromthetaxpayerthatithasnoother

sourceofincome.

Item9.3oftheminutesofOperationsDialogueheldon2April2001confirmedthatfornon-residentrecipientssubjectedtowithholdingtaxunderSection109and109B,taxreturnformswould not be issued. This implies that if the non-residentrecipientsreceivedonlyincomesubjectedtoSections109and109B,thenCP204isnotapplicabletoo.

TheInstituteswouldliketoconfirmthat:

(a) where the source of income of a non-residentbranch/permanent establishment is fully subjectedtowithholdingtax,thenon-resident isnotrequiredto file Form CP204, irrespective of whether thewithholdingtaxisimposedunderSection107A,109or109B.

(b) wherethesourceofincomeofanon-residentbranch/permanent establishment is partially subjected towithholding tax, thenon-resident is required to fileFormCP204.However,thewithholdingtaxpaidareallowed to be set-off against the tax instalmentspayable.

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LHDNM: LHDNM akan mengkaji isu ini dan akan dibincangkan

dalamdialogoperasi.

4.1.14Accesstoe-TaxRecordsbyTaxpayers

The Institutes would like to enquire whether a taxpayerwouldstillbeabletoaccesstheIRBwebsitetoviewhise-TaxRecordsusinghispersonalDigiCerteventhoughhistaxreturnwassubmittedbyaTaxAgent(thoughTAeF)onhisbehalf.ThisissuehadnotbeenaddressedbyIRB.

LHDNM: LHDNMakanmengkajiisuini.

Tindakan:LHDNM(JPH)

4.2 HAL-HALLAIN

4.2.1 PendapatanKasarLain-LainYangTertaklukKepadaSubseksyen4(f)

JPHakanmembuatsemakandengan JabatanTeknikaldanisuiniakandibincangkandalamdialogoperasi.

Tindakan:LHDNM(JPH)

4.2.2 TarikhPelancaranTAeF

JTMmemaklumkansamaadatarikhpelancaranTAeFyangdijadualkan pada 1 Mac 2009 dapat dipercepatkan atautidak akan diketahui selepas e-Filing individu dilancarkanpada 15 Januari 2009. Sekiranya kesemuanya berjalanlancar,taikhPelancaranTAeFmungkindapatdipercepatkanpadaakhirbulanJanuai2009.

4.2.3 e-PCB

JTMakanmemberiformate-PCBkepadaEn.Keeganhujungmingguini.

Tindakan:LHDNM(JTM)

4.2.4 LaporanAuditMeja

Wakil Persatuan Akauntan Johor Bahru memaklumkanbahawa terdapat dakwaan di mana ejen cukai diberitahutiada apa-apa surat dikeluarkan jika tiada penemuansemasa audit meja. Jabatan Pematuhan memaklumkanbahawa prosedur audit meja dan audit luar adalah samadaninitelahditerangkandalamrangkakerjaaudit.Y.Bhg.Dato’Pengerusimenyarankansuratperingatandikeluarkanuntukmemaklumkancawangansupayamengeluarkansurat

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kepada pembayar cukai dalam tempoh yang ditetapkansepertiyangdinyatakandalamrangkakerjaauditwalaupuntiadapenemuansemasaauditmeja.

Tindakan:LHDNM(J.Pematuhan)

MICPA Circular No.: TEC/014/04/2009/W Issue date: April 2, 2009

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1.0 Pursuant to the dialogue between the Revenue ManagementDepartment of Inland Revenue Board (IRB) and representativesofMICPA,MIT,MIA,MAICSA,MATAandMACSheldonFebruary25,2008, itwasproposedthataworkinggroupmeetingbeheldamong the same bodies to discuss issues that may arise fromtimetotime.ThefirstworkinggroupmeetingwasheldonMay14,2008.

Theminutesofthemeetingoftheworkinggroupwithaccountingbodies (Bil. 2/2008) setting out the issues discussed and thecomments/clarificationprovidedbytheIRB.

2.0 ProgramMemfailBorangNyataTahunTaksiran2008

2.1 Persatuan Akauntan mencadangkan timeline berhubung denganperkaraberikut:

i. e-Filingindividudanperkongsian

ii. e-Filingsyarikat

iii. module-Filingejencukai.

CadangantersebutterkandungdalammemorandumbersamaMIT,MIAdanMICPAbertarikh14.5.2008(LampiranA).

2.2 MesyuaratdimaklumkanLHDNMakanmengkajicadangantimelineyangdikemukakanolehPersatuanAkauntan.

2.3 LHDNMmemaklumkanbahawadrafpertamarekabentukBorangNyata B dan BE Tahun Taksiran 2008 dijangka siap pada 30 Jun2008.BorangnyatatersebutdijangkasiapsepenuhnyapadabulanOktober2008.

2.4 PersatuanmemaklumkanbahawarekabentukBorangNyataBdanBEbagitahuntaksiran2007tidakmenimbulkankesulitankepadapembayarcukai.

2.5 Mesyuarat dimaklumkan bahawa Helaian Kerja (HK) dalam notapenerangantidakwajibdihantarkecualiHK3bagituntutanbayaranbalikseksyen110AktaCukaiPendapatan1967.

2.6 LHDNM akan mengkaji cadangan Persatuan Akauntan supayamemasukkanHK3dalamsisteme-Filing.

2.7 LHDNM bersetuju dengan cadangan persatuan supaya sebarangprosedur baru berhubung pembayar cukai dan ejen cukaidimasukkandalamlamanweb.

III. DESIREBIL.2/2008

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2.8 Mesyuarat dimaklumkan bahawa sistem e-Filing bagi e-BE, e-B,e-M dan e-P Tahun Taksiran 2008 akan mula disediakan padabulanJulai2008.IadijangkasiappadabulanNovember2008.

3.0 IT Subworking Group(ITSWG)

3.1 Mesyuaratdimaklumkanbahawasubworking group telahditubuhkanbagi menangani dan menyelesaikan isu berhubung teknologimaklumat. Jawatankuasa ini terdiri daripada wakil LHDNM,persatuanakauntandanpenyediaperisian(software provider).

3.2 Mesyuaratdimaklumkanbahawasatumesyuaratdenganpenyediaperisian bagi ejen cukai telah diadakan pada 13.5.2008 bagimembincangkancadangankaedah interface di antara sistemyangdisediakanolehpenyediaperisiandansisteme-Filing.

3.3 Cadanganuntukmemudahkanpemindahandata tanpadata entrytelah dibincangkan pada mesyuarat berkenaan. Kaedah berikutsedangdipertimbangkan:

i. System Integration – penyediaan kemudahan bagimembolehkan pemindahan data dari sistem aplikasi yangdigunakanolehejencukaiteruskesisteme-Filing.

ii. Text file –menyediakankemudahanbagipemindahandatamelaluiprosesbatch.

3.4 Y. Bhg. Dato’ Pengerusi menyatakan bahawa LHDNM akanmengkaji cadangan di atas dari berbagai aspek termasuk aspekperundangan.

3.5 Encik Sani diminta membuat pembentangan berhubung dengancadangan sistem di atas pada mesyuarat Working Group akandatang.

4.0 Set-offbakikredit

4.1 Mesyuarat dimaklumkan bahawa Persatuan Akauntanmencadangkan kepada Kementerian Kewangan supaya pilihanmenggunakanbakikredituntukset-offbayaranansurancukaiataumemilih untuk bayaran balik, dimasukkan dalam borang nyata.LHDNM memaklumkan bahawa jumlah pembayar cukai yangmemilih set-off bakikreditadalah tidak ramai.Oleh itu,cadanganuntuk memasukkan pilihan set-off dalam sistem adalah tidaksesuai.

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4.2 Mesyuaratmencadangkansupayapilihanset-off diberidalamsisteme-Filing. Ia adalah merupakan insentif kepada pembayar cukaiyang menggunakan perkhidmatan e-Filing pada tahun hadapan.Bagaimanapun,LHDNMakanmembuatkajianberhubungdengancadangantersebut.

5.0 e-Filing

5.1 LHDNMakanmenambahbaikprosedurdansisteme-Filing2008.

5.2 Mesyuaratjugadimaklumkanbahawabayarancukaibolehdibuatmelaluisisteme-Bayaran.

6.0 Module-FilingEjenCukai

6.1 Isuberhubungmodule-FilingejencukaisepertidalammemorandumakandikajiolehLHDNM.IsuakandibincangkandalammesyuaratITSWGakandatang.

7.0 Hal-halLain

7.1 Mesyuarat dimaklumkan bahawa terdapat firma ejen cukai yangtidak menggunakan e-Filing semasa memfailkan borang nyatapelanggan,walaupunLHDNMtelahberusahauntukmempromosidanmenyediakanmodule-Filingejencukaipadatahunini.

7.2 PersatuanAkauntanmemaklumkanmungkinfirmayangmempunyaipelanggan yang ramai menghadapi masalah menggunakan e-Filing.Pelangganjugakadangkalalewatmengemukakanmaklumatkepada ejen cukai. Bagaimanapun, persatuan bersetuju bahawadenganpenambahbaikanyangdibuatdanpendidikancukaidiberikepadapelanggan,penggunae-Filingakanmeningkatpadamasahadapan.

7.3 LHDNMakanmengkajisemularekabentukborangE2008.LHDNMjugaperlumengkajikeperluanmaklumatdanpermintaandaripadapembayarcukai.Mesyuaratmengambilmaklumbahawaperluadamekanisme untuk menyemak jumlah Potongan Cukai Berjadual(PCB) yang tidak diremit oleh majikan ke LHDNM. ContohnyadalamkesmajikanmembuatpotonganPCBtetapi tidakmeremitbayarankepadaLHDNM.

7.4 Mesyuarat Working Group seterusnya akan diadakan padapertengahanbulanJulai2008.

7.5 Persatuan Akauntan diminta mengemukakan isu perbincanganselewatnyaduaminggusebelummesyuarat.

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lampIran a

JOINTMEMORANDUMFROMMIT,MIAANDMICPAISSUESTOBEDISCUSSEDBYTHEWORKINGGROUP

ONTHEYEAROFASSESSMENT2008FILINGPROGRAMME

MovingForwardtoYA2008 14May2008

1.0 FILINGPROGRAMMEINGENERAL

The Institute would like to commend the IRB’s efforts to takethe tax filing programme to the e-Filing as this is the electronicage, and theMalaysian tax system toomustmove forward. It isthe intentionof the Institutes toassist the IRB in thesuccessfulimplementationofthee-filingsystem.

1.1 Establishing the time schedule of the Year of Assessment2008filingprogramme

Inordertofacilitatethesmoothimplementationoftheannualtaxfilingprogrammeforthecomingyear,itisnecessaryto:

a. establish a close liaison with the professional bodies and

softwareserviceprovidersb. haveanearlytestingofthefilingsystemc. haveanearlyfinalisationandd. haveanearlylaunchofthefilingsystem

The Institutes would like to propose that a schedule oftarget dates for the formulation, testing and finalizationof the filing system and eventually the launch date of thefilingprogrammebesetsothatprogresscanbeeffectivelymonitored.

In this respect, the Institutes have identified the followingareas of focus and propose the respective time schedulesfortheconsiderationoftheWorkingGroup

1.1.1 e-Filing–IndividualsandPartnerships

Stage 1 - Changes to e-Borang to include 2008 Budgetprovisions

Target Task

May2008 Tocommencework

June2008 Preliminary finalisation

July-August2008

Assessment/feedbackbyprofessionandtaxsoftwareproviders (data scheme and validation logic to beprovided)

August2008 Finalisation

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Stage2-Changestotakeintoaccount2009Budgetproposals(whereitimpactsYA2008)

Target Task

Sept.2008 TostartworkimmediatelyafterBudgetannouncement.

Oct.2008 Preliminary finalisation

Nov.2008 Assessment/ feedbackbyprofessionandtaxsoftwareproviders (data scheme and validation logic to beprovided)

End -Nov.2008 Finalisation

1Dec.2008 Launch

1.1.2 e-Filing–Corporates

Stage 1 - Changes to e-Borang, including 2008 Budgetprovisions

Target Task

Current WorkshouldalreadybeinprogressnowCompanieswithJanFYendarerequiredtomaketheirsubmissionsnotlaterthanbyAugust2008Minimumleadtimeofonemonthrequiredtobegivenforcompletionofform

April2008 Assessment/ feedbackbyprofessionandtaxsoftwareproviders (data scheme and validation logic to beprovided)

May2008 Finalisation

1June2008 Launch

August2008 FilingdeadlineforYA2008byCompanieswithJanuaryfinancial year-ends

Stage2-Changesto take intoaccountBudget2009(where itimpactsYA2008)

Target Task

Sept.2008 Worktostart(immediatelyafterBudget)

Oct.2008 Preliminary finalisation

Nov.2008 Assessment/ feedbackbyprofessionandtaxsoftwareproviders (data scheme and validation logic to beprovided)

End-Nov.2008 Finalisation

1Dec.2008 Launch(wouldmeetthesubmissionsdeadlinesforJuneFYsend)

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1.1.3 TaxAgente-FilingModule

Forenote Thereisarequirementtohaveadequatefacilitiestoallow

for assimilation by the tax software (data scheme andvalidationlogictobeprovided)

Stage1-Existingmodule:Reassessmentandfeedback

Target Task

May2008-June2008

ReassessmentexerciseTaxsoftwareprovidersandpractitionersshouldbeincluded

July2008 Re-launchofRevisedmodule

Stage2-Revised/finalmodule

Target Task

July2008-August2008

Assessmentandfeedback

Sept.2008 Finalisation

1Oct.2008 Launch with road shows and hands-on sessionsnationwide

Oct.2008-Nov.2008

TimeforPractitionerstosign-up

1.2 Establishment of an Information Technology Sub-WorkingGroup(ITSWG)

Due to the highly technical nature of the IT Problems, a sub-committeecomprising ITspecialistswouldhavetobe formedtodealwithandresolveIT-relatedtechnicalissues.

1.2.1 CompositionoftheITSWG

The ITSWG should consist of tax practitioners from MITand other professional bodies, IRB officers and serviceproviders.

1.2.2 EffectiveCoordination

Inorder tobeeffectivelycoordinated, twomembers fromthe service providers should be included in all WorkingGroup meetings to clarify any technical issues that mayariseandtogivetheirinputsonITmatter.

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2.0 CURRENTSTATEOFE-FILING

2.1 IRB

WeunderstandthattheIRBhasproblemsincapturingthedataintoitssystem.E-Filingwouldessentiallyhavetheeffectofoutsourcingtheworkofdataentrytothetaxpayerandtaxagents.

2.2 TaxAgents

Withonefurtherlevelofdataentry,taxagentsmayfacesignificantresourceanddata-authenticationissues.

2.2.1 Currently, tax agents utilise either excel worksheets ordedicated tax software to assist them in their work, withmoresubscribingtothe latter (taxsoftware)asaresultoftheprevailingtightlabourmarket,inparticular,withregardtoavailabilityofexperiencedtaxstaff.

2.2.2 Taxsoftware-enabledoperations

(i) Tax computations are prepared through the taxsoftware.

(ii) Upon review and finalisation, the tax data in thesoftware is “locked”. Changes to the tax data isrestrictedbypasswordcontrols.

(iii) PDF-formenvironmentThetaxsoftwareenablesthetax-datatobeinterfacedwiththePDF-formswithoutcorruptiontothedata.Essentially,nofurtherdata-entryorreviewtasksarerequired.

(iv) E-Filingenvironment Thetaxsoftwareenablesthetax-datatobeinterfaced

withtheIRBe-Filingwebsite,withoutcorruptingthedata.Again,nofurtherdata-entryorreviewtasksarerequired.

Note: FortheYA2007filing-theinterfacebetweenthe software and IRB e-Filing website wasunstable due to constant debugging. Taxagentswerethereforeunabletosubmittheirreturns by e-Filing (without the need to re-enterthetaxdatadirectlytotheIRBe-Filingwebsite).

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3.0 PLATFORMSFORE-FILING(TAxPAYERSE-FILING)

The e-Filing system has gone through various changes since itsinitiallaunchanditwouldbetimelytomakeanassessmentastowhethertherewillbeaneedtohavefurtherchangestotheoveralle-filingplatform

The Institute are of the view that unless there are someinherent serious defects in the platform, there should notbe a need to change the platform. This is to facilitatefamiliarisationwiththeexistinge-filingsystem.Aconstantchange of the platform creates confusion. It is hope thatwitheffectYA2008, therewillbenonewe-filingplatformintroducedbyIRB.

4.0 FEEDBACKONE-FILING-GENERALISSUES

4.1 Improvement on dissemination of e-filing procedures andtrainingprogrammes.

4.1.1 The IRB information and training centres around how toenterthesystembut lacks informationonhowtousethesystem.Forexample, inthetaxagente-filemodule,thereisnoclarificationon the role, functionandauthorityofasystemadministrator,ataxagent,asupervisorandastaff.Manytaxagentshavelearntthroughtrialanderror.Therearealsonostepbystepguideonhowtoedit,howtorectifyerrors,etc.

4.1.2 MembersfeedbackthattheycannotgetthesupportwhentheycalluptheIRB,includingthee-filinghotline,becauseeither no one take the call or they cannot answer theproblemsraisedsatisfactorily.WeunderstandthattheIRBmay not have the necessary experienced staff, hopefullywiththeimprovementindisseminationofinformationitwillreducetheburdenoftaxpayerscallingthecallcentre.

4.1.3 Currently there isnopermanent trial sitewhere taxpayerscan try out the e-filing system without committing to e-file.Thisisanimportantfeatureasit isawaytoestablishtaxpayerconfidencetoe-file.

4.1.4 Thetrainingsessionsfortaxagentse-filingmodulearenotconductedeffectivelyinthatthetrainingdisintegratesintogroup discussions and participants are unable to benefitfromissuesraisedbyothergroups.

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TheInstitutesthereforeproposethat:

a) IRBimproveonitsguidebookandtrainingmanualanduploadonitswebsitesoastoassistthetaxpayersandtaxagents.Thiswillbeatwowaycommunicationastheuserswillfeedbackontheweaknessoftheguidebook/manuals thereby improving the effectiveness of theguidebook/manuals.

b) To increase the e-filing hotline capacity to ensuresufficient support is given to tax agents andtaxpayers.

c) IRBsetupane-filingtrialsiteonitswebsitesothattaxpayers could try it out safely, therebyestablishaconfidenceinthee-filingsystem.Thistrialsitemustbe permanent as there are always new taxpayersand new users every year and even “experienced”taxpayers may need to try again as they only do itonceayearandtheremaybechangestotheforms.

d) IRB improve the tax agents e-file module trainingprogramme and conduct the training from themanagementperspective soas tomake the trainingmoreeffective.

e) Itissuggestedthatblanke-Formsbemadeavailableso that taxpayers and tax agents may print outand review the form first for familiarisation andpreparation of information required before they e-file.

4.2 Borang e-BE does not provide a field to enter a new passportnumber unlike Borang e-M. Hence, when resident expatriateemployeesrenewtheirpassports,taxagentsareunabletoupdatetheirpassportnumbers.

4.3 The Institutes propose that the filling up of the Lampiran betreatedasoptional.

4.4 TheIRBhasinformedtaxpayersthattheydonothavetofiletheirReturnFormBastheirincomeisnottaxableforyearofassessment(YA)2006,andhencenoreturnformswereissuedtothemforYA2007.

TheInstituteswouldliketoseekclarificationfromIRBonthisissue.TheInstitutesareoftheviewthatthetaxpayersstillneedtofiletheirtaxreturnstoascertaintheiraccumulatedbusinesslossesandunabsorbedcapitalallowancestodate.

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5.0 FEEDBACK ON ExISTING TAx AGENT E-FILING MODULE(TAEFSYSTEM)

5.1 RigidWorkGroupStructureandUnauthorisedFiling

It is generally felt that the tax agents e-filing (TAeF) systemis encroaching to the management of tax agents business,particularlytheintroductionofarigidworkgroupstructure.Thishas complicated the system and cause lot of confusion andproblems. For example, there are cases where a tax agent isworkingfortwoormoretaxfirms.Therearealsosoleproprietorswhooperatetwotothreebrancheswiththehelpofexperiencedtaxstaff.Thesecurityissues,controlrequirementsandprocedureofworkflowarethereforedifferent.ItwillbeahugetaskfortheIRBtodesignasystemthatfitsintheexistingbusinessarrangementofalltaxagents.

The TAeF system does not allow the system administrator toprepare e-forms unless he is also registered as a tax agent. Inpractice,systemadministratorsaregenerallyoneoftheseniortaxprofessionalswhodoedite-Formsandsupervisee-filing.

Thecurrentsettingallowsanyoneenteringthesystemandfillinguptheformtosendande-file,thuscreatingpotentialnon-authorisedfiling.Thereisconcernthatstaffcompletingthee-Borang,attachtheTaxAgentDigiCertmayaccidentallypress“hantar”insteadofsavingthee-Borang.

Other restrictions includethefactthattheusercanonlyviewthelistoftaxpayers’portfolioifthetaxpayers’profilewerecreatedbyusingtheuser’sownID.TheusercannotviewtheStatuse-Borangifthetaxpayer’sprofilewasnotkeyedinusinghisID.However,theuser can still view the status of the taxpayer in e-Borang (Selia).In practice, the portfolio of taxpayers is created by the staff andtheSupervisorcannotviewtheStatuse-Borangexceptthroughthee-Borang(Selia).However,wheretherearecross-reportingbystaff,thesystemwillbecomeahindrancetosupervision.

TheInstitutesproposethatIRBshouldconsiderdisclosingthenecessaryITdetailssoastoallowthetaxpayers/taxagents/softwareserviceproviderstoexporttheirinformationtotheIRBsystemwithouthavingtokeyinthedataagain.Thiswouldgreatlyfacilitatee-filingandhelpmanyorganizationstooptfore-filing.AsIRBhasalreadyexperiencedre-keyingintakesupsomuchunproductivetimeandispronetoerrors.

TheInstitutesarealsooftheviewthatthelinearworkgrouporganisations/structures should be modified to facilitate

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administration.Itshouldnotfixtherestrictionsinassigningjobs and accessing taxpayers’ files. Such rights should begranted to the System Administrator of the firm who willdeterminetheassignmentofthejobandaccessibilityofthefileaccordingtheeachfirmsrequirements.Agoodsystemshould be flexible enough to cater for any organizationstructurewithin the taxpayers/taxagents firms.This couldsolvealotofproblemsfortheIRB.

The Institutes propose that access rights be re-designedintotwocategories:

NormalUser—onewhocanregister,performpreparatoryworkandfillupe-Formbut cannot submit the e-form;

AuthorisedUser—onewhocanregister,performpreparatoryworkandfillupe-Form,view/editalle-formswithinthefirmand online submit the e-form;

The roles and access rights of the systems administratorand taxagent shall remain intactExCEPT that the systemadministrator shouldbeallowed toassume theadditionalroleasanauthorizeduser.

5.2 TaxAgentsDeclaration(AkuanEjenCukaiUntuke-Filing)

Tax agents are required to click the “Agree” button in theDeclaration section before the return form of the taxpayer canbee-filedtotheIRB.Manymembersareuncomfortablewiththedeclarationthattheincomereportedanddeductionsclaimedaretrue, accurate and complete,which isnotrequired inthecurrentmanual filing system. It has imposedanundue responsibilityonthe part of tax agents who do no not have full control or evenknowledgeofhowthebusinessesoftaxpayerswereconducted!

The Institutes wish to point out that tax agents do not run thebusinessofthetaxpayersandtheirrolesarenotthatofinquirers.They depend on the taxpayers to provide true, accurate andcompleteinformation.It is impossibleforthemtoverifywhethertheinformationprovidedbythetaxpayerisso.Underthemanualfilingsystem,itisthetaxpayerwhomakesthedeclarationandtaxagentonlysignsastheformpreparer.

The Institutes understand that wording of the declarationhavebeenchangedtoreflectthatwrittenauthorizationhasbeen obtained from taxpayer to file return electronicallyandthatthereturnwaspreparedbasedontheinformationprovidedbytaxpayer.Thetaxpayerhasconfirmedthatthe

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informationsoprovidedistrue,completeandaccurate.TheInstituteswishtocommendIRBforitsswiftactiontorectifythesituation.

Tax agents are required to obtain authorization via Form CP55from taxpayers to submit tax returnelectronically underSection152A(5)(a). In practice, such approval is obtained prior to thesubmissionofthetaxreturn.Section152A(5)(d)requirestaxagenttoobtaintaxpayer’ssignatureaftersubmissionviae-filing.Thee-filing systemdoesnotcater forauthorisedpersons to signonbehalfof the taxpayers. In reality, taxagents faceddifficulties inobtaining signatures, particularly in the case of expatriates. Thisismaybepartlydue to the frequent travelling (e.g. secondmenttoothercountries,leavingMalaysiapermanently,etc.)partlyduetothetaxreturnalreadybeenfiledandtaxpayersarereluctanttosign.

Taxpayersarerequiredtosignmanuallyontheprintedfinalcopiesof the e-BE and e-M at the bottom of Akuan Ejen Cukai Untuke-Filing. This has caused some confusion as it appears that thetaxagentshouldsignaftermaking thedeclarationalthough it isindicatedthatthetaxpayeristosignattheplacemanually.

TheInstitutesproposethat:

i. Taxpayer signature after submission be dispensedwithtoreduceduplication.

ii. Authorizedpersonsbeallowedtosignonbehalfofthetaxpayer;

iii. A separate section/heading be created for thetaxpayer’ssignaturetoavoidconfusion.

5.3 DifficultyingettingaccessintotheTAeFsystem

Members informed the Institutes that it isdifficult toaccess theIRB’swebsiteduringworkinghours.Pageloadingisslowandcantakeupseveralminutes.Inparticular,loadingtheForme-MisverymuchslowerthantheForme-BE,andoccasionallytheweb-FormwillnotmovebeyondtheRegistrationwindow.ThussubmissionofForme-Mcanbeverytimeconsuming.

The Institutes would like to suggest that the IRB considerincreasingthebandwidthandservercapacity tofacilitatee-filing.Inaddition,thereshouldbefeaturestoallowexportofdata in batches to the IRB system. These Forms could thenbe checked and verified at the tax agent’s own time andschedule.

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5.4 OpeningofTaxpayers’Files

Currentlyaccessproblemsoccurredmainlyatthe“FirstRegistration”level.Thereareinstanceswheretaxagentswereunabletoregisterindividual taxpayers due to non-existence of records. Tax agentshavetosendthedetailsofthetaxpayerstothenearestIRBbranchforregistrationofrecords.Sometimes,thestaff isunabletoopenthe“IsiBorang”forindividualtaxpayersafterregisteringthem.Thereisalsoduplicationof some taxpayers'names in theTAeFsystem.Thishasconfusedtheusers.

The Institutes propose that an auto check function beintroducedintotheTAeFsystem.Inaddition,thetaxpayer'srecord will be automatically registered for e-filing onceincometaxnumberisallocatedtofacilitatee-filing.

Where,however,itwasfoundoutthattherewereerrorsintherecordoftheTAeFsystem(e.g.thenameandpassportnumber are wrong), what are the procedures in place torectifytheerror?

5.5 Confirmationofe-Filing

It has been brought to the Institutes attention that wheree-Borang has been filed, the taxpayer's name may still appearin theTAeFsystemunder thestaff's listasanon-submitted file.Similar problems also occurred after the form was e-filed, thetaxpayernameappearedin“BelumHantar”listaswellas“Hantar”listwhencheckingthe“Statuse-Borang”.

5.6 AcknowledgementReceipt

Unlike Borang e-BE, the “Save Acknowledgement” for Form e-Mdoes not automatically convert the Acknowledgement ReceiptintoaPDFformat.ItremainsasanHTMLfile.Therearealsocaseswhere taxagentswereunable to retrieve theiracknowledgementreceiptandthee-Borangalthoughthenameoftaxpayerappearedas“Hantar”under“Statuse-Borang”buttheTAeFsystemreturnedwiththemessage“Tiadarekodpenerimaanmelaluie-Filing”.

5.7 RetrievalofFiles

The system is unstable at times and members frequentlyexperience a “time-out” problem. When the TAeF system hangsor is time-out in the midst of submitting the e-Borang, there isno selection to delete and the tax agents need to start all overagain. Tax agents are also unable to retrieve the files submittedunder “Semakan Pengesahan”. Similarly, completed e-BE savedfor later review sometimes suffered data loss which has to bere-keyedin.

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5.8 DecimalIssues

The TAeF system seems to have decimal issues in computingtheSTD, section110credit and taxpayableuponconverting toPDFformat.Forexample,whenaSTDwith2decimalplaceswasentered,theamountofSTDwillbedifferentby1or2cents.

5.9 “Keluar”frome-Borang

Upon completing the e-Borang of a taxpayer, the preparer hasto click keluar and log in again to the system to open anothertaxpayer’sfile.

Tofacilitateworkflowefficiency,theInstitutessuggestthatthe“keluar”buttonshoulddirect thepreparer tothefrontpagewherehe/shecancontinuetoopenanotherfileunlesshe/shechoosestologoutoftheTAeFsystem.

5.10 NoRecoursetoError

If the e-BE was selected instead of the e-B, it appears that thiserror could not be rectified even if the file type selected is OG.Thereisnoconsequenterrormessagesappearingwhenpreparingfore-M.

5.11 AcceptanceValidation

TheICNo.ofsenderandtaxagentsappearingontheacceptancevalidationslip.

The Institutes are of the view that the disclosure of fullnames of the sender and the tax agent number and firmname should suffice. Disclosure of I/C No. posed privacysecurity issues. Many government websites allow a userto use his/her IC No. to access information. For e.g. SkimSimpanan Pendidikan Nasional annual statements can beobtainedbykeyinginuserI/CNo.only.

5.12 AutoCastingFunction

There is no auto casting function in e-B “Ekuiti Pemilik” sectionande-P“EkuitiPerkongsian”section.

The Institutes propose that the auto casting function beinstalledinthesesectiontoreduceerrors.

5.13 RestrictiononRegistrationofTaxAgent

Currently,ataxagentcanonlyregisteredwithonetaxfirm.Whenataxagent(A)resigns,theprocedureisforthesystemadministratorofoldfirm(X)todeletehisnamefromXandthentheadministratorofnewfirm(Y)toregisterhim(A)asataxagentunderY.

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ThismayposeaproblemwhenAdoesnot leaveXonafriendlybasis. As A cannot re-registered himself if X does not deletehis(A’s)name.

Fortaxfirmsthathaveinternationalaffiliations,thelocalassociatemayhavehisownportfolioofclientsunderhisowncompanyandatthesametimehemayalsobealocalpartneroftheforeignfirm.Soitwouldbedifficultforhimasheisthetaxagentlicenceholderofbothcompany,thelocalandforeigncompanies.

TheInstitutesproposethattaxagentshavenorestrictioninregisteringoralternativelytheyshallbeallowedtohaveonespecificlicencenumberforonefirm.

5.14 Options for selection of clients (by name/ by tax referenceno.)

Currently the selection of clients can only be done throughvalidationby ICNo. It issuggestedthatanadditionaloption forselection,suchasbytaxreferenceno.bemadeavailable.

5.15 Theweb-form

Therearenocorrespondingsectionsandfieldreferencenumberstotheactualphysicalformandtheorderofthefieldsisconfusing-eg.AfterAggregateIncomecomesthe‘AnsuranPCB’and‘PreviousYearIncome’.

5.16 ChangeofPassword

Passwordchangesareoccasionallynotcapturedproperly,forcingtheusertorevertbacktotheresultdefaultpassword.

6.0 LookingForward

6.1 Futuresuccessofthee-Filingsystemdependon

i. the stable and flexible interface between users’ software(including both taxpayers and tax agents) and the IRBe-Filingwebsite.

ii. A stable interface would allow tax-data to be seamlesslytransferredfromthetaxsoftwaretothee-Filingwebsite.

iii. This interface is relevant to both the Individual and TaxAgente-Filingsystems.

iv. Re-entryoftaxdata(fromthecompletedtaxcomputations)into the e-Filing website on the following grounds is notrealisticbecauseoftheissuesof:

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- the need to re-authenticate / re-validation of the taxdata.

- resources as senior tax staff and managers does nothavethecapacitytoreviewtaxdataatthecompletion,finalisationlevel,andagain,atthesubmissionlevel.

- resources is significantly critical in the prevailing tightlabourmarket.

6.2 The Institutes would like to highlight that the tax agents areoperating under huge constraints, especially in view of theeffective“out-sourcing”ofthedata-entrytasksfromtheIRBtothetaxagents.ItishopedthattheIRBwouldempathisewiththetaxagentsconstraints.

MICPA Circular No.: TEC/021/06/2008/W Issue date: June 16, 2008

Date post:	11-Mar-2023
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