TaxPOD Update Class Slides September 2022

1
Copyright © 2022 YYC All rights reserved. Web: www.yycadvisors.com YYC Advisors1974
2
3
4
5
6
7
7
8
9
9
Update Class
September 2022
10
10
Contents
1) Public Ruling No. 2/2022 - Tax Incentive for Organising Conferences In Malaysia
IRB 2) FAQ on Tax Corporate Governance Framework (TCGF) and Guidelines
Updates 3) Technical Guideline (Amended) on Deduction of Secretarial & Tax Filing Fees from
YA2022
4) Guide on Customs Agent Services

RMCD
5) Guide on Sales Tax Exemption under Schedule C, Sales Tax (Persons Exempted from
Updates Payment of Tax) Order 2018
6) P.U. (A) 259 - Sales Tax (Amendment) Regulation 2022 [Furnishing of Return and
Federal Payment of Sales Tax]
Gazette 7) P.U. (A) 260 - Service Tax (Digital Services) (Amendment) Regulation 2022 [Issuance
of credit note and debit note & Submission of Returns and Payments]
8) HASiL’s Response to the CTIM feedback and comments on Form e-C 2022
9) HASiL - Withholding Tax Form Submission & Withholding Tax Payment of Small
Other
Value for transactions that recur.
Updates 10) Court Case - High Court Rules Taxpayer’s Disposal of Land is NOT A TRADING
ACTIVITY
11
11
IRBM
Updates
(1)
Public Ruling No. 2/2022 –
Tax Incentive For Organising
Conferences In Malaysia
12
12
Public Ruling No. 2/2022
Tax Incentive For Organising Conferences In Malaysia
Issued on 29th July 2022
13
13
Public Ruling No.2/2022 combines the two gazette orders below :
Income Tax (Exemption) Income Tax (Exemption)

(No.53) Order 2000 & (No.4) Order 2021
[P.U. (A) 500/2000] [P.U. (A) 195/2021]
Definition of Conference :
Large meeting for :-

• Consultation
• Exchange of information or
• Discussion where researchers, academicians
and professionals can share their work and
research in different fields.
14
14
P.U. (A) 500/2000 P.U. (A) 195/2021

Tax 100% tax exemption on the statutory 100% tax exemption on the statutory
Exemption income derived from organising income derived from organising
conferences held in Malaysia in the conferences held in Malaysia in the
relevant year of assessment (YA) by relevant year of assessment (YA) by an
an eligible conference promoter. eligible qualifying person.
Condition Brought in at least five hundred (500) foreign participants to attend
conferences held in Malaysia in the basis year for a YA.
Period of Effective from the YA1997 onwards. Effective from the YA2020 until the
Exemption YA2025.
Statutory Statutory income derived from organising conferences held in Malaysia
Income ➢ Fees and other payments received by a qualifying person from promoting
and organising conferences which includes the arranging of
accommodation, tours and sightseeing for foreign participants derived from
organizing conference held in Malaysia, less allowable expenses for tax
purposes and capital allowances, if any.
15
15
P.U. (A) 500/2000 P.U. (A) 195/2021

Eligibility A conference promoter must be:- A qualifying person must be:-
Criteria ➢ a company incorporated under ➢ a company incorporated under the
the Companies Act 2016; or Companies Act 2016; or
➢ an association or organisation ➢ an association or organisation
registered under the Societies Act registered under the Societies Act
1966; and 1966; and
➢ a resident in Malaysia whose ➢ a resident in Malaysia which carries
main activities are in promoting on business or activity other than
and organising conferences in business or activity of promoting
Malaysia including the arranging and organising conferences in
of accommodation, tours and Malaysia including the arranging of
sightseeing for foreign accommodation, tours and sight
participants. seeing for foreign participants.
Separate An organiser seeking an exemption is required to maintain a separate account
Accounts for the income derived from organising conferences held in Malaysia.
16
16
P.U. (A) 500/2000 P.U. (A) 195/2021

Submission The grant of an exemption under above two (2) gazette orders DOES NOT
of ITRF absolve the conference promoter or the qualifying person from complying
with any requirement to submit any ITRF or statement of accounts or to
furnish any other information under the Act.
17
17
IRBM
Updates
(2)
FAQ On Tax Corporate Governance
Framework (TCGF)
and Guidelines
18
18
FAQ On Tax Corporate Governance Framework (TCGF)
and Guidelines
Issued on 27th July 2022
19
19
and Guidelines
Introduction
Tax Corporate Governance Framework (TCGF)

➢ Establishes the techniques and processes
within the organisation to identify tax risks,
assess risks, and sets out the appropriate
actions to mitigate the impact of those tax
risks.
➢ An effective TCGF brings confidence that

the organisation is :-
• reporting and paying the right amount of
tax
• enabling organisations to achieve
greater certainty in relation to their tax
affairs.
20
20
and Guidelines
Frequently Asked Questions (FAQs)
Who can
implement Tax
➢ TCG is suitable for all sizes and types of businesses that give priorities
Corporate
and resources to corporate governance matters.
Governance
(TCG)?
Who can ➢ TCG in Malaysia is currently being implemented as a pilot project.
join the TCG Therefore, selected organisation will receive an invitation from IRBM.
programme? ➢ The interested organisations may contact IRBM via tcg@hasil.gov.my.
to communicate their interest or to obtain further information on the
Programme.
21
21
and Guidelines
Frequently Asked Questions (FAQs) (Cont’d)
First phase (Pilot Project)

➢ IRBM will focus on communicating our standards to the public with
Is there any the aim of creating awareness and educating the organisation.
implementation ➢ The pilot project phase will begin in June 2022 and expected to end
phase for the in June 2024.
programme?
Second phase (Post Pilot)
➢ The programme will be opened to everyone.
Would there be
any fee charged ➢ No fees will be charged to participate.
to participate?
22
22
and Guidelines
How long will

the programme ➢ Once an organisation is accepted into the programme,
be offered once the TCG status will be valid for 3 years subject to terms
an organisation and conditions stated in the offer.
is accepted?
Will taxpayers
➢ An Authentication Letter (surat pengesahan) will be
receive any
given to taxpayers once the IRBM is satisfied with the
certificate as
organisation’s TCGF and Tax Control Framework after
proof of
performing the review and assessment process.
participation?
Will cost
incurred for the ➢ These expenses are capital in nature
implementatio and NOT ALLOWABLE for tax deduction
n be tax under subsection 33(1) ITA 1967.
deductible? 23
23
and Guidelines
Frequently Asked Questions (FAQs) Q: What is the advantage or benefit offered by

(Cont’d) the IRBM to the organisation that participates
in the TCG programme?
Reduced Expedite any

scrutinization of ongoing dialogue
compliance Appointment of a on technical
Expedite tax matters
activities dedicated tax
refunds
officer Prior
➢ Lesser tax consideration:-
audits will be ➢ A single point of ➢ Consideration
➢ Accelerate tax
conducted contact will be given in
refund process
➢ Higher between respect of tax
for compliant
materiality or taxpayer and penalty rates
participants.
reduced sample the IRBM. ➢ Step down of
size compliance
activities
24
24
and Guidelines
Can I subsequently ➢ A request to withdraw from the TCG programme should be made
withdraw from the in writing.
TCG programme?
What is the ➢ An assessment on the reason for withdrawal will be done and the
implication? company’s compliance risk profile will be taken into account.
How long is the ➢ The proposed timeframe from the date
time taken for the of acceptance to the award of
TCG process? participation status is 8 - 12 months,
with a potential extension of time
(subject to IRBM’s approval)
➢ Renewal process is necessary from

time to time to meet the standards for
the programme.
25
25
and Guidelines
Who can be the Independent ➢ Approved tax agent

Reviewer? ➢ Internal auditor with suitable qualification
➢ Qualified independent person
Can the independent reviewer ➢ Yes, the independent reviewer can advise the taxpayer
be the tax advisor who advises on its TCGF.
the organisation on its TCGF?
➢ For greater independence, it is better for the
organisation to appoint different parties to act as a
consultant to advice the organisation in terms of the
adequacy and effectiveness of its TCGF.
26
26
IRBM
Updates
(3)
Amended Technical Guideline on the
Deduction of Secretarial and Tax Filing
Fees from YA 2022
27
27
Amended Technical Guideline on the Deduction of Secretarial and
Tax Filing Fees from YA 2022
Supersedes the Amended

Technical Guideline 2020
Issued on 17th August 2022
28
28
History and Roadmap
YA2006 – YA2014 Effective on YA2015 until YA2019 YA2020 – YA2021 Effective YA2022
➢ Secretarial Fees ➢ Tax Filing Fees – RM10,000 ➢ Secretarial Fees ➢ Secretarial Fees
➢ Tax Filing Fees ➢ Secretarial Fees – RM5,000 ➢ Tax Filing Fees ➢ Tax Filing Fees
are non allowable Special deductions is given to (Capped at (Capped at
expenses in the the taxpayers who is a tax RM15,000 in total) RM15,000 in total)
computation of resident and conduct business Expenses incurred and Expenses incurred by a
Income Tax. in Malaysia under Income Tax paid by a resident resident person is
Act 1967 in which the person is combined combined into a single
expenses were incurred and into a single deduction deduction of up to
paid. of up to RM15,000 per RM15,000 per year of
year of assessment. assessment.
- P.U. (A) 336/2014 P.U. (A) 162/2020 P.U. (A) 471/2021

- Incurred and Paid Basis Incurred and Paid Basis Incurred Basis
29
29
Gazetted under P.U. (A) 336/2014.

YA2015 – YA2019
(Being revoked by P.U. (A) 162/2020)
Income Tax Criteria of Tax Deduction Tax Deductible

Effective YA
Rules Incurred & Paid basis Incurred Amount
Secretarial fees 2015 - 2019 √ 5,000
Tax Filing Fees 2015 - 2019 √ 10,000
Secretarial and tax filing fees incurred BEFORE the basis period of YA2020 and
YA2021 that have NOT YET BEEN CLAIMED are NOT ALLOWED to be claimed
starting 1 January 2022.
30
30
YA2020 – YA2021 Gazetted under P.U. (A) 162/2020.

Effective YA
Secretarial fees 2020 – 2021 √
15,000
Tax Filing Fees 2020 - 2021 √
Secretarial and tax filing fees that incurred in the basis period of YA2020 and YA2021, but
have not yet been claimed, are ONLY ALLOWED to be claimed as deductions when the
expenses HAVE BEEN PAID in YA 2022 or the following year of assessment (“YA”).
31
31
Effective YA2022 Gazetted under P.U. (A) 471/2021.

Effective YA
Secretarial fees 2022 √
15,000
Tax Filing Fees 2022 √
➢ Effective YA2022, the tax deduction for expenses related to secretarial and tax filing
fees has been amended and gazetted under P.U.(A) 471/2021.
➢ Under P.U.(A) 471/2021, secretarial and tax filing fees are eligible for the tax
deduction even if the expenses are only “INCURRED” by the person during the basis
period for a particular YA.
32
32
Qualified expenses in relation to Secretarial & Tax Filing Fees
Secretarial Fees Tax Filing Fees

Secretarial fees which comply with the Service fees from tax agent in relation to the
statutory requirements under the filing of tax return forms and departure levy
Companies Act 2016. including service on tax computation.
➢ Advisory service regarding company
meetings;
➢ Preparation of directors’ resolution;
➢ Share issuance or forms disclosure which
comply with the requirement of
Companies Act 2016; and
➢ Other expenses related to company
matters.
33
33
Qualified expenses in relation to Tax Filing Fees
➢ Expenses on filing income tax return form (“ITRF”) under Section 77, 77A, 77B, 83 and 86 of
Income Tax Act (“ITA”) 1967;
➢ Expenses on estimation of tax filing and the instalment payment of estimate of tax under
Section 107C under ITA 1967. (i.e. CP204, CP204A and CP204B);
➢ Expenses on submission of Sales Tax Return Form under Section 26 of the Sales Tax Act 2018;
➢ Expenses on submission of Service Tax Return Form under Section 26 of the Service Tax Act
2018;
➢ Expenses on the submission of the prescribed form under Section 19 of the Departure Levy
Act 2019; and
➢ Expenses for submission of prescribed form under Section 19 of the Tourism Tax Act 2017.
34
34
NON-QUALIFIED Expenses
Tax Filing Fees

➢ Reimbursement/out of pocket expenses;
➢ Telephone and fax;
➢ Printing;
➢ Stationery;
➢ Postage;
➢ Travelling; and Secretarial Fees
➢ Accommodation. Other expenses such as
general meeting expenses.
35
35
RMCD
Updates
(4)
Guide on Customs Agent Services
36
36
Supersedes Guideline dated

15 March 2019
37
37
Quick Recap
Item 3 Group I, First Schedule of Service Tax Regulations 2018
Any person who is given permission to act as an

agent under subsection 90(2) of the Customs Act
1967 [Act 235]
Provision of services for clearing of goods

from customs control.
38
Amended Paragraph
Inserted
“Designated Area” (DA) means Labuan, Langkawi, Tioman and Pangkor
Para 6(iii)
(Section 47, Service Tax Act 2018);
Overview of Customs Agent Services

7. Under the provisions of Section 90 of the Customs Act 1967 customs
agents may act on behalf of importers and exporters to carry out the
business to relieve goods from customs control. Customs agents consist of
shipping agents, and forwarding agents and freight forwarder.
Inserted
Para 7 & 8 8. Prescribed services under service tax for a customs agent is the provision
of services for clearing of goods from customs control. Other services
supplied by a customs agent are not subject to service tax. Meanwhile, the
services of shipping agents and freight forwarders are not subject to
service tax because these services are under the category of logistics
management service.
39
39
Amended Paragraph
Overview of Customs Agent Services

9. There is no threshold for the purpose of registration under service
tax. In accordance with Section 90(2), Customs Act 1967, applicant need
Para 9 to be a registered person under the Service Tax Act 2018. Customs
agents who have been registered under section 90(2) Customs Act 1967
must apply for service tax registration within 14 days from the date of
such approval as a customs agent.
Inserted
Deleted Paragraph
Charging Service Tax

Para 11 11. Service tax on the supply will be charged at the point of services
rendered.
Deleted
40
40
Amended Paragraph
Service Tax Treatment for Customs Agent Services

12. For service tax purposes, only the provision of services for clearing
Para 12
of goods from customs control by a custom agent registered under
Section 90, Customs Act 1967 will be subjected to service tax.
Deleted
13. A customs agent may also supply the following services to his
customer which are not consider as taxable services under custom agent
(but may be considered as taxable services under management services
Para 13 or consultancy services): Apart from the service of clearing goods from
customs control, there are also customs agents providing the following
services which may be subject to service tax under other groups of
taxable services. Among them are as follows:
Inserted
41
41
Amended Paragraph (Cont’d)
(i) Providing transportation services for shipments of goods

(ii) Acting as a guarantor to ensure that commercial operations
take place under the agreed conditions; Deleted
(iii) Recommendation and advice at all costs in order to provide an
alternative that is more profitable and efficient (however it may fall as
prescribed services under consultancy services). This includes
Para 13
recommendation and advice on freight costs, port and customs expenses,
(Cont’d)
consular fees, special documentation costs, insurance costs and freight
management costs;
(iv) Preparation and presentation of the documentation required for the
exportation of the freight, such as the bill of lading and other proper
documents for the seller, the buyer or any other third party involved in the
process (however it may fall as prescribed services under management
services);
42
42
Amended Paragraph (Cont’d)
(v) Advice (however it may fall as prescribed services under

consultancy services) on the most suitable mode of freight
transport and on the procedures of packaging, stowage and
loading of the freight. This services fall under consultancy
Para 13 services. Deleted
(Cont’d)
(vi) Reservation of the cargo space required on a ship, aircraft,
train or truck, haulier in addition to handling of the storage
and/or distribution of the freight, and sometimes even by using
the door-to-door method (however it may fall as prescribed
services under management services);
43
43
Inserted New Example 6

If a customs agent provides services that are subject to service tax under other groups of
taxable services, the customs agent is liable to be registered under whichever group of
the First Schedule, Service Tax Regulation 2018.
Example 6
Although NGF does not

provide customs agent
services to Masmira but
the advisory service
provided by NGF is a
A customs agent Natasa Global taxable service under
Syarikat Masmira has
Forwarding Sdn. Bhd. (NGF) Group G, First
received advisory and
explained the relevant Schedule, Service Tax
opinions regarding
procedures and documents for Regulations 2018
import and export
the import and export matters of procedures.
Syarikat Masmira’s trading goods. 44
44
RMCD
Updates
(5)
Guide on Sales Tax Exemption under
Schedule C, Sales Tax (Persons
Exempted from Payment of Tax)
Order 2018
45
45
Guide on Sales Tax Exemption under Schedule C, Sales Tax (Persons
Exempted from Payment of Tax) Order 2018
Supersedes Guideline dated

24 April 2019
46
46
Quick Recap
Schedule C Persons Goods Exempted

Raw materials, components and packaging
Item 1 Any registered manufacturer
materials excluding petroleum
Raw materials, components and packaging
Any registered manufacturer of
Item 2 materials including petroleum to be used as
petroleum product
raw material
Any person acting on behalf of Raw materials, components and packaging
Item 3
registered manufacturer materials excluding petroleum
Any person acting on behalf of Raw materials, components and packaging
Item 4 registered manufacturer of materials including petroleum to be used as
petroleum product raw material
Semi-finished taxable goods or finished taxable

Item 5 Any registered manufacturer goods for subcontract work and subsequently
returned after completion of work
47
47
Ref: Sales Tax Policy No. 1/2022

Amended Paragraph
(Sales Tax Exemption on Pallets)
Categories of raw materials, components and packaging/packing
materials used in manufacturing and are eligible for exemption are as
follows:
(ii) Packaging/ packing materials
Packaging/ packing materials for filling or wrapping finished goods in
factories such as boxes, cartons, containers, crates, cases, pallets and
bandages. These include:
Para 6 • Materials used to condense the stuff packed into boxes and
containers such as paper strips, straw and plastic foam
• Crates, cases, containers, pallets and other packaging/packing
materials used to transport finished goods which are not returnable
and the cost of such materials are included in the selling price of the
goods.
• Labels for the identification of finished goods attached to bottles,
cans or boxes.
48
48
Inserted New FAQs
FAQ No. 2
Q: We are manufacturer of finished taxable goods but not registered under Sales
Tax. Can we apply for exemption under Schedule C to import raw materials to be
used in our manufacturing activity?
A: In order to enjoy exemption under Schedule C, you must be a registered
manufacturer under Sales Tax.
FAQ No. 4
Q: How to apply for exemption?

A: You may apply the exemption from MySST Portal.
49
49
Federal
Legislation
(6)
P.U. (A) 259 - Sales Tax
(Amendment) Regulations 2022
[Furnishing of Return and Payment of Sales Tax]
50
50
P.U. (A) 259 - Sales Tax (Amendment) Regulations 2022
Effective from
15 August 2022
51 51
Clarification on the Returns Made and Payments of Sales Tax
Furnishing of returns
10 (1) A return made under regulation 9 shall be furnished to
the Director General by post or courier services to the Customs
Processing Centre or through electronic service.
10 (1) A return made under regulation 9 shall be furnished to
the Director General through electronic service or in any
manner as the Director General may determine.
52
52
Clarification on the Returns Made and Payments of Sales Tax (Cont’d)
10 (2) A return shall be deemed to be furnished—
a) in the case of delivery by post, on the date of the post mark;
aa) in the case of delivery by courier services, on the date the tracking
number of the delivery is recorded in the courier services company’s
system; or
b) in the case of electronic service, when such return has been
received by the Director General through the electronic service
10 (2) A return shall be deemed to be furnished when such return
has been received by the Director General through the electronic
service or in any manner as the Director General may determine.
53
53
12(1) Payment of sales tax in respect of any return made under

section 26 of the Act, surcharge, penalty, fee or any other money
payable under the Act shall be made either by cheque, bank draft or
electronic banking or in any manner as the Director General may
determine.
12(2) In relation to the payment made by cheque or bank draft, the

cheque or bank draft shall be sent to the Customs Processing Centre
by post or courier services.
12(3) Any cheque or bank draft sent by post or courier services under
subregulation (2) shall be deemed to have been received—
(a) in the case of delivery by post, on the date of post mark; or
(b) in the case of delivery by courier services, on the date the
tracking number of the delivery is posted in the courier services
company’s system. 54
54
Payment of sales tax, etc.

12 (4) Any sales tax, surcharge, penalty, fee or any other money shall be deemed to be paid when
the payment is received by the Director General provided that
a) where any cheque or bank draft is received by the Director General and is not paid on
presentation, the amount shall be deemed not to have been received notwithstanding any
receipt given until such amount is duly paid to the Director General; or
b) where payment is made through a bank, the amount shall be deemed not to have been
received until such amount is lodged to the credit of the Director General.
Payment of sales tax, etc.

12 (4) Any sales tax, surcharge, penalty, fee or any other money shall be deemed to be paid
when the payment is received by the Director General provided that
a) where payment is made through electronic banking, the amount shall be deemed not to
have been received until such amount is lodged to the credit of the Director General; or
b) where payment is made in any manner as the Director General may determine, the
amount shall be deemed not to have been received notwithstanding any receipt given
until such amount is duly paid to the Director General.
55
55
Federal
Legislation
(7)
P.U. (A) 260 - Service Tax
(Digital Services) (Amendment)
Regulations 2022
[Issuance of credit note and debit note &
Submission of Returns and Payments]
56
56
P.U. (A) 260 - Service Tax (Digital Services) (Amendment) Regulations
2022
Effective from 15 August

2022
57 57
P.U. (A) 260 - Service Tax (Digital Services) (Amendment)
Regulations 2022
Clarification on the issuance of credit note, debit note
The Director General may upon request in writing by any foreign

registered person (subject to the conditions as the Director General
deems fit) allow any particulars specified not to be stated in a
credit note or debit note issued by the foreign registered person.
Clarification on submission of returns and payments
For the purposes of receiving returns and payments of service tax

or penalty payable, where the last date falls on the: No extension of
– Federal weekly holiday time for the foreign
registered person
– Federal public holiday in Malaysia, or to perform its
– in the country where the foreign registered person is established obligation.
then the last day to receive such returns and payments of service
tax or penalty payable is on that day.
58
58
CTIM
Updates
(8)
HASiL's Responses to the
CTIM Feedback and Comments on
Form e-C 2022
59
59
HASiL's Responses to the CTIM Feedback and Comments on
Form e-C 2022
Issued on 29th July 2022 Revised on 3rd August 2022
60
60
Form e-C 2022
Newly Added - Appendix A2
61
61
Form e-C 2022
CTIM Comment and Response from HASiL
CTIM Comment Response from HASiL

The definition of statutory income (“SI”) as ➢ Determination of SI for FSI that received
the amount of foreign source income (“FSI”) in Malaysia from overseas is subject to
to be remitted and received may not the provisions under subsection 42(1) of
necessarily be the same as the amount the Income Tax Act (“ITA”) 1967.
stated in the audited financial statements. ➢ Taxpayer is required to state the actual
Hence, we hope that HASiL may provide amount remitted by the type of income,
guidance to compute the said SI. if there is a difference between the
amount in the financial statement and
the remitted amount, supporting
document is needed as evidence.
➢ Technical guidelines related to the
treatment of FSI will be issued in due
course.
62
62
Form e-C 2022
CTIM Comment and Response from HASiL (Cont’d)

We understand that the exchange rate to be ➢ The amount of FSI must be reported
used is when the income is received in based on the foreign currency exchange
Malaysia. rate of the date of income received in
Malaysia. Taxpayers can use the
Can the taxpayers refer to the monthly rate exchange rate published in the Official
available via the link published on HASiL’s Portal of Accountant General
website i.e. Accountant General’s Department (AGD).
Department of Malaysia (AGD) - Foreign
Currency Exchange (anm.gov.my), or must ➢ Taxpayers must keep evidence of every
this be based on the date of remittance (e.g. oversea income transactions received in
rate available on BNM website)? Malaysia.
What is the type of supporting documents

to be kept by the taxpayers?
63
63
Form e-C 2022
Newly Added – Appendix A20
64
64
Form e-C 2022

We understand that the dividend income ➢ Ya.
from a foreign source where the headline
tax rate is at least 15% qualifies for
exemption and such dividend income
exempted from the tax shall be
disclosed/declared in Item F9.
Kindly confirm.
We would like to seek clarification with Yes, FSI received in Malaysia for the period
regards to the column named “gross of 1st January 2022 to 30th June 2022
amount of income remitted” on whether should refer to gross income.
the amount remitted is taken as gross
amount?
65
65
Form e-C 2022
F8 Appendix : Information on Controlled Transaction Amendments, Part A
66
66
Form e-C 2022
From Form C YA2022 Explanatory Notes
67
67
Form e-C 2022

The question raised in Part A contradicts the ➢ The explanation in Company Return
explanation provided in the Form C Form Guidebook 2022 has been updated
Guidebook. accordingly.
➢ Taxpayers should declare whether they
Kindly clarify whether the question was are required to prepare the TP
meant for the taxpayer to confirm the documentation or not.
requirement to prepare the transfer pricing ➢ For such determination, they can refer to
documentation (TP doc) or to confirm if the the TPD Flowchart and Self-test as
taxpayer has prepared the TP doc for provided on IRBM’s website (under the
YA2022? Transfer Pricing section).
➢ If a taxpayer is required to prepare a
transfer pricing documentation, the
answer to this question would be “Yes”.
68
68
Form e-C 2022
69
69
Form e-C 2022

What if more than one selection is
➢ The taxpayer should select the “main”
applicable to the taxpayer? To select
activity.
“Others”? Or to select the “main” activity?
Kindly provide a detailed explanation for the ➢ IRBM will update further explanation on
respective terms of the characteristics the characteristics such as
stated on Form C manufacturing / manufacturing, distribution or service
distribution / service activity and etc. for activity in the Company Return Form
further reference. Guidebook 2022.
The transaction of the company declared or ➢ If a taxpayer has paid the dividend to any
paid any dividend is not a controlled associated person in Malaysia or outside
transaction, is the question necessary? Malaysia, they should declare such
amount in Part B16.
70
70
Form e-C 2022
F9 Appendix : Receiving Tax-Exempt Income Sourced Outside Malaysia
71
71
Form e-C 2022

Capital gains are not subject to Malaysian ➢ If the taxpayers have any capital gain
income tax (out of scope) and hence it is not income from oversea, taxpayers are
an income exempted from tax. Please advise required to fill in the relevant field.
the rationale for reporting the capital gains
as “income from sources outside Malaysia
which is exempted from tax” in Item F9
(Attachment).
Please confirm the “Headline Tax Rates in

the Country of Origin” only applies to
Dividends and hence can be left blank for
capital gains.
72
72
Form e-C 2022

With regards to the columns named “Tax ➢ Information for both types of tax are
paid in the country of origin” and “The related to the type of income reported.
amount of tax charged in the country of
origin”, do they include withholding tax only ➢ Taxpayers are required to report the
or both withholding tax and underlying withholding tax and income tax based
tax? on the type of income received.
73
73
CTIM
Updates
(9)
Withholding Tax Form Submission and
Withholding Payment of Small Value for
Transactions that Recur
74
74
Withholding Tax Form Submission and Withholding Payment
of Small Value for Transactions that Recur
75
75
Withholding Tax Form Submission and Withholding Payment
of Small Value for Transactions that Recur
Effective from August 2022
Type of Withholding Tax

Section 109, Royalty & Interest Section 109B, Special Classes of income
The amount of withholding tax that do not exceed RM500 per transaction for transaction
that recur might be submit the withholding tax form and pay withholding as follows:
For payment transactions made to the non- Submission of WHT form and payment of
resident recipient between: WHT can be made once on or before:
1 December (in the year before) until 31 May 30 June
(in the current year)
1 June until 30 November (in the current year) 30 December
76
76
Court Case
(10)
High Court Rules Taxpayer’s Disposal of
Land is not a Trading Activity
77
77
High Court Rules Taxpayer’s Disposal of Land is not a Trading Activity
10 plots of land
Acquired and VS
disposed land in
Year 2011 to 2013
Few years later, HASiL changed its mind and alleged that the
taxpayer was involved in the business of land trading and raised
notices of additional assessment for income tax with penalty.
78
78
7 out of 10 plots of land to finance the

acquisition of another plot of land known as
“Plot HSM 2079”. To finance the purchase,
RM4mil loan was taken from a local bank.
3 plots of land was to reduce the limit of

the overdraft facility procured from MBB.
10 plots of land
Acquired Rented
➢ Managing Director Plot HSM 2079

XL Aquatic (Shah Alam)
➢ Main shareholder
Sdn Bhd (XLASA) 79
79
Badges of Trade
1. Period Of Ownership And Frequency Of Transactions
1. Short period of ownership of the plots of land gives rise to a factor to indicate that the
taxpayer was embarking on an adventure of trade.
2. High Court was persuaded that the period of ownership of merely 1 to 4 years alone
CANNOT be the only determinative factor to indicate that the taxpayer was indulging
in trading.
3. Taxpayer had a good explanation for his conduct, in which disposed of the plots of land
in LESS THAN 5 years of owning them.
4. The High Court’s attention

Drawn to a number of reported cases such as PR Sdn. Bhd. where the taxpayer only
held the land parcels for about a year or so, the SCIT held that the land was the
taxpayer’s investment.
80
80
Badges of Trade
2. Circumstances Responsible For Sale
1. In determining whether the disposal of a property is revenue or capital in nature, due
regard must be given to the facts of the particular case in a wholistic manner.
2. Taxpayer was under pressure to purchase the land parcel known as Plot HSM 2079 as
the tenancy agreement for XLASA was ending in 2011 and the landowner had refused
to renew the tenancy agreement.
3. Lower Perak Co-Operative Housing Society case

The Supreme Court held that a forced sale meant that there was NO TRADING since
the element of compulsion vitiates the intention to trade.
4. Gra Sdn Bhd case

The disposal of land by the taxpayer was triggered by the taxpayer’s ultimate holding
company’s group restructuring exercise, otherwise the taxpayer would have retained
the lands. 81
81
Badges of Trade
3. Methods Employed In Disposing Of The Property
1. The SCIT found that NO form of advertising was conducted by the taxpayer in efforts
to dispose the land as opposed to the involvement of a well established broker or a
certified property agent.
2. In fact, the sales of land were facilitated through ‘words by mouth’ amongst the
acquaintances of the taxpayer. There was no special exertion was made to procure or
attract purchasers such as the opening of a marketing office or extensive advertising.
“In respect of the sale of the unused portion, there was no evidence to show that the
appellant made preparation for the sale such as advertising or that the appellant had
opened an office just for the purpose of selling the unused portion or other activity
pertaining to sale or development of the unused portion. The evidence shows that
the sale of the unused portion was by chance in that there was a good offer by
Chanrai Investment Corporation and it was on the unused portion which prompted
the appellant to sell the land. The badges of trade DOES NOT exist in this sale.”
82
82
Badges of Trade
4. Subject Matter of The Transaction
➢ All the plots of land disposed of by the taxpayer were agricultural

land and could only be used for agricultural purposes.
➢ This position was consistent with the findings of the SCIT that the
taxpayer has been principally involved in the cultivation of
agricultural land as opposed to the business of trading in land.
Badges of Trade
5. Alteration To Property
➢ The SCIT found that NO alterations were made to the plots of land to render it more
saleable, in contrary to the allegations of the Revenue.
➢ There was NO evidence to show any alteration, improvement or changing of the
character and quality of the subject land so as to render it more merchantable.
➢ The mere fact that the taxpayer installed coops and coop fences was NOT sufficient to
conclude that the taxpayer had taken steps to increase the value of the plots of land.
83
83
The decision of the High Court mirrors the position of the Supreme Court in the
Lower Perak Co-Operative Housing Society case
84
84
High Court Rules Taxpayer’s Disposal of Land
is NOT A TRADING ACTIVITY
NYF Realty Sdn Bhd case

The High Court was correct in deciding that
the initial intention of the taxpayer in
acquiring the said plots of land were for
investment purposes.
Conclusion:-
The conduct of the taxpayer in disposing
the plots of land were necessary for the
sole intention to safeguard the interest of
the taxpayer’s interest in XLASA, a
company in which he had a keen interest.
85
85
High Court Rules Taxpayer’s Disposal of Land
is NOT A TRADING ACTIVITY
Conclusion on Badges of Trade
Badges of Trades Element Positive / Negative

Period Of Ownership And Frequency Of Transactions Positive
Circumstances Responsible For Sale Negative
Methods Employed In Disposing Of The Property Negative
Subject Matter Of The Transaction Negative
Alteration To Property Negative
➢ As there was no misconception of law by the SCIT and the decision reached was wholly
supported by the facts found by the SCIT.
➢ The High Court dismissed the Revenue’s appeal and held that the gains arising from
the disposal of the 10 plots of land should NOT BE subjected to income tax.
86
86
Like our Facebook page
• YYC Advisors
• Tax Guru Zen Chow
to our Youtube Chanel

• TaxPOD – Tax
Professional On Demand
87
88
88
89
YYC Holdings Sdn Bhd For more information please contact
YYC Group
www.yycadvisors.com For more information
03-9078 2868
please
contact
019-368 6868
YYC Advisors 1974
www.yycadvisors.com enquiry@yyc.my03-9078 2868
YYC Advisors 1974 019-368 6868 90
enquiry@yyc.my

TaxPOD Update Class Slides September 2022

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

TaxPOD Update Class Slides September 2022

Uploaded by

Copyright:

Available Formats

1

4) Guide on Customs Agent Services

Issued on 29th July 2022

Public Ruling No.2/2022 combines the two gazette orders below :

Income Tax (Exemption) Income Tax (Exemption)

Large meeting for :-

P.U. (A) 500/2000 P.U. (A) 195/2021

P.U. (A) 500/2000 P.U. (A) 195/2021

P.U. (A) 500/2000 P.U. (A) 195/2021

Issued on 27th July 2022

Tax Corporate Governance Framework (TCGF)

➢ An effective TCGF brings confidence that

Frequently Asked Questions (FAQs)

Frequently Asked Questions (FAQs) (Cont’d)

First phase (Pilot Project)

Frequently Asked Questions (FAQs) (Cont’d)

How long will

Frequently Asked Questions (FAQs) Q: What is the advantage or benefit offered by

Reduced Expedite any

Frequently Asked Questions (FAQs) (Cont’d)

➢ Renewal process is necessary from

Frequently Asked Questions (FAQs) (Cont’d)

Who can be the Independent ➢ Approved tax agent

Supersedes the Amended

Issued on 17th August 2022

History and Roadmap

- P.U. (A) 336/2014 P.U. (A) 162/2020 P.U. (A) 471/2021

Gazetted under P.U. (A) 336/2014.

Income Tax Criteria of Tax Deduction Tax Deductible

YA2020 – YA2021 Gazetted under P.U. (A) 162/2020.

Income Tax Criteria of Tax Deduction Tax Deductible

Effective YA2022 Gazetted under P.U. (A) 471/2021.

Income Tax Criteria of Tax Deduction Tax Deductible

Qualified expenses in relation to Secretarial & Tax Filing Fees

Secretarial Fees Tax Filing Fees

Qualified expenses in relation to Tax Filing Fees

Tax Filing Fees

Supersedes Guideline dated

Issued on 9th August 2022

Item 3 Group I, First Schedule of Service Tax Regulations 2018

Any person who is given permission to act as an

Provision of services for clearing of goods

Overview of Customs Agent Services

Overview of Customs Agent Services

Charging Service Tax

Service Tax Treatment for Customs Agent Services

Amended Paragraph (Cont’d)

(i) Providing transportation services for shipments of goods

Amended Paragraph (Cont’d)

(v) Advice (however it may fall as prescribed services under

Inserted New Example 6

Although NGF does not

Supersedes Guideline dated

Schedule C Persons Goods Exempted

Semi-finished taxable goods or finished taxable

Ref: Sales Tax Policy No. 1/2022

Inserted New FAQs

Q: How to apply for exemption?

Clarification on the Returns Made and Payments of Sales Tax

Clarification on the Returns Made and Payments of Sales Tax (Cont’d)

Clarification on the Returns Made and Payments of Sales Tax (Cont’d)

12(1) Payment of sales tax in respect of any return made under

12(2) In relation to the payment made by cheque or bank draft, the

Clarification on the Returns Made and Payments of Sales Tax (Cont’d)