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Tax Espresso LFSA Circular on LIC Pronouncement 1-2019, Guidelines for tax exemption of incremental chargeable income, updated FAQs on the SPVD and more July 2019
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Tax Espresso – July 2019
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Tax Espresso LFSA Circular on LIC Pronouncement 1-2019, Guidelines for tax exemption of incremental chargeable income, updated FAQs on the SPVD and more
July 2019
Tax Espresso – July 2019
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Greetings from
Deloitte Malaysia Tax Services
Quick links: Deloitte Malaysia
Inland Revenue Board of Malaysia
Takeaways:
1. LFSA issuance of the Circular on LIC Pronouncement 1-2019
2. Guidelines for Tax Exemption of Incremental Chargeable Income from a Business Source
3. Guidelines for a Social Enterprise Application to be Approved under Subsection 44(11C) of
the ITA
4. Extension of stamp duty exemption for the purchase of residential property
5. IRBM updated FAQs on the SPVD
Important deadlines:
Task 2019 Due Date
31 July 1 August
1. 2020 tax estimates for companies with August year-end √
2. 6th month revision of tax estimates for companies with
January year-end √
3. 9th month revision of tax estimates for companies with
October year-end √
4. Statutory filing of 2018 tax returns for companies with
December year-end √
5. Due date for 2019 CbCR notification for companies with
July year-end √
Tax Espresso – July 2019
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LFSA issuance of the Circular on LIC Pronouncement 1-2019
The Labuan Investment Committee (LIC) has been established by the Labuan Financial Services
Authority (LFSA). The LIC is mandated to recommend policies on substantial activity
requirements in the Labuan International Business and Financial Centre (Labuan IBFC) and to
monitor the enforcement of the related regulations on substantial activity requirements.
Following various implementation issues arising from recent changes to the Labuan tax regime, the LIC has issued a Circular on LIC Pronouncement 1-2019 (dated 19 June 2019) to clarify on
three (3) of the following matters:
(a) Treatment of non-allowable deductions (Non-deductibility) for payments made to a Labuan
entity by a resident under Section 39(1)(r) of the Income Tax Act 1967 (the ITA);
(b) compliance to the substantial activity requirements required for Labuan entities [i.e. Labuan
Business Activity Tax (Requirements for Labuan Business Activity) Regulations
2018]; and
(c) definition of “full-time employees”.
Please refer to the Circular for full details.
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Guidelines for Tax Exemption of Incremental Chargeable Income from a
Business Source
The Inland Revenue Board of Malaysia (IRBM) has recently released the Guidelines on Tax Exemption for Incremental Chargeable Income from a Business Source (available in Bahasa
Malaysia only) (the Guidelines).
The Guidelines explain the conditions of eligibility and the computation for the incentive based
on the percentage of increase in chargeable income from a business source in the current year as compared to the immediately preceding year. The incentive is provided by the Income Tax
(Exemption) (No. 2) Order 2017 [P.U.(A) 117/2017] and is effective for the years of
assessment (YAs) 2017 and 2018 only.
The Guidelines also cover situations where the incentive is not applicable and the issue of
penalty pertaining to consequential changes to the amount of incremental chargeable income after an audit by the IRBM.
Various examples have also been provided in the Guidelines to explain the P.U.(A) 117/2017
incentive. Please refer to the Guidelines for full details.
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Tax Espresso – July 2019
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Guidelines for a Social Enterprise Application to be Approved under Subsection 44(11C) of the ITA
It was announced in Budget 2019 that social enterprises will be added to the list of the approved
organisations, institutions and funds where a contribution made to these organisations, institutions and funds would qualify as a deduction, capped at 10% or 7% of the company’s or
persons other than a company’s aggregate income.
Recently, the IRBM released the Guidelines (which is available in Bahasa Malaysia only) on the
procedures and eligibility of a social enterprise to apply for approval under Subsection 44(11C) of the ITA.
The Guidelines cover the following areas:
1. Eligibility criteria for a social enterprise to apply for the approval under Subsection 44(11C) of
the ITA and the terms and conditions that a social enterprise must comply with after obtaining such approval under Subsection 44(11C) of the ITA;
2. a social enterprise must be accredited as a Social Enterprise by the Ministry of Entrepreneur
Development (MED). [Please visit the Ministry of Entrepreneur Development's website for
further information relating to the application for accreditation by the MED];
3. income tax deduction allowed for the cash donations made to an approved social enterprise;
4. dissolution of a social enterprise;
5. application period for a social enterprise to obtain approval under Subsection 44(11C) of the
ITA and the period the approval is valid for an approved Social Enterprise;
6. revocation of the approval; and
7. submission of application to the Ministry of Finance (MOF).
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Extension of stamp duty exemption for the purchase of residential property
The stamp duty exemptions relating to the purchase of residential property under the National Home Ownership Campaign 2019 as provided under the Stamp Duty (Exemption) (No. 2) Order
2019 [P.U.(A) 81/2019] and Stamp Duty (Exemption) (No. 3) Order 2019 [P.U.(A) 82/2019]
have been extended to 31 December 2019, by amending the words (shown in purple below)
in Subparagraph 2(2)(a) of the aforementioned Exemption Orders:
“The exemption under subparagraph (1) shall only be granted if– (a) the sale and purchase agreement for the purchase of the residential property is executed
on or after 1 January 2019 but not later than 30 June 2019 31 December 2019 and is
stamped at any branch of the Inland Revenue Board of Malaysia;
(b) ….
(c) ….”
Tax Espresso – July 2019
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The above extension are provided under the Exemption Orders that were gazetted on 28 June
2019 as shown below:
1. (Stamp Duty (Exemption) (No. 2) Order 2019) (Amendment) Order 2019 [P.U.(A)
173/2019]; and
2. (Stamp Duty (Exemption) (No. 3) Order 2019) (Amendment) Order 2019 [P.U.(A)
174/2019].
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IRBM updated FAQs on the SPVD
The IRBM has uploaded the updated Frequently Ask Questions (FAQs) on Special Program for
Voluntary Disclosure (SPVD) dated 9 May 2019 on its website. The FAQs replaces the FAQs on
SPVD dated 29 March 2019.
The FAQs updates include:
Extension of SPVD period until 30 June 2019 (phase 1) and 30 September 2019 (phase 2);
penalty rate of 100% equivalent to the amount of tax undercharged pursuant to Section
44A(9)(b) of the ITA, i.e. group relief provisions on recovery of loss of tax;
voluntary disclosure for partnership businesses;
failure to pay withholding tax within the stipulated period;
voluntary disclosure for the year of assessment 2018 being opened to companies with
accounting period ended 31 January 2018, 28 February 2018 and 31 March 2018 only; and
higher penalty rates for Transfer Pricing issues effective 1 October 2019.
Back to top
We invite you to explore other tax-related information at:
http://www2.deloitte.com/my/en/services/tax.html
Tax Espresso – July 2019
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Tax Team - Contact us
Service lines / Names Designation Email Telephone
Business Tax Compliance & Advisory
Sim Kwang Gek
Tan Hooi Beng
Stefanie Low
Thin Siew Chi
Choy Mei Won
Suzanna Kavita
Managing Director
Deputy Managing
Director
Executive Director
Executive Director
Director
Director
+603 7610 8849
+603 7610 8843
+603 7610 8891
+603 7610 8878
+603 7610 8842
+603 7610 8437
Business Process Solutions
Julie Tan
Loke Chee Kien
Shareena Martin
Executive Director
Director
Director
+603 7610 8847
+603 7610 8247
+603 7610 8925
Capital Allowances Study
Chia Swee How
Sumaisarah Abdul Sukor
Executive Director
Associate Director
+603 7610 7371
+603 7610 8331
Global Employer Services
Ang Weina
Chee Ying Cheng
Michelle Lai
Executive Director
Executive Director
Director
+603 7610 8841
+603 7610 8827
+603 7610 8846
Tax Espresso – July 2019
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Government Grants &
Incentives
Tham Lih Jiun
Thin Siew Chi
Peggy Wong
Executive Director
Executive Director
Director
+603 7610 8875
+603 7610 8878
+603 7610 8529
Indirect Tax
Tan Eng Yew
Senthuran Elalingam
Chandran TS Ramasamy
Larry James Sta Maria
Wong Poh Geng
Executive Director
Executive Director
Director
Director
Director
+603 7610 8870
+603 7610 8879
+603 7610 8873
+603 7610 8636
+603 7610 8834
International Tax & Value Chain Alignment
Tan Hooi Beng
Deputy Managing Director
+603 7610 8843
Mergers & Acquisitions
Sim Kwang Gek
Managing Director
+603 7610 8849
Private Wealth Services
Chee Pei Pei
Gooi Yong Wei
Executive Director
Executive Director
+603 7610 8862
+603 7610 8981
Tax Audit & Investigation
Chow Kuo Seng
Stefanie Low
Executive Director
Executive Director
+603 7610 8836
+603 7610 8891
Transfer Pricing
Theresa Goh
Subhabrata Dasgupta
Executive Director
Executive Director
+603 7610 8837
+603 7610 8376
Tax Espresso – July 2019
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Philip Yeoh
Gagan Deep Nagpal
Justine Fan
Vrushang Sheth
Anil Kumar Gupta
Executive Director
Director
Director
Director
Director
+603 7610 7375
+603 7610 8876
+603 7610 8182
+603 7610 8534
+603 7610 8224
Sectors / Names Designation Email Telephone
Automotive
Stefanie Low
Executive Director
+603 7610 8891
Consumer Products
Sim Kwang Gek
Managing Director
+603 7610 8849
Financial Services
Chee Pei Pei
Gooi Yong Wei
Mark Chan
Mohd Fariz Mohd Faruk
Executive Director
Executive Director
Executive Director
Director
+603 7610 8862
+603 7610 8981
+603 7610 8966
+603 7610 8153
Oil & Gas
Toh Hong Peir
Kelvin Kok
Executive Director
Director
+603 7610 8808
+603 7610 8157
Real Estate
Chia Swee How
Tham Lih Jiun
Executive Director
Executive Director
+603 7610 7371
+603 7610 8875
Telecommunications
Thin Siew Chi
Executive Director
+603 7610 8878
Tax Espresso – July 2019
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Other Specialist Groups
/ Names Designation Email Telephone
Chinese Services Group
Tham Lih Jiun
Executive Director
+603 7610 8875
Japanese Services Group
Julie Tan
Executive Director
+603 7610 8847
Korean Services Group
Chee Pei Pei
Lily Park Sung Eun
Executive Director
Associate Director
+603 7610 8862
+603 7610 8595
Branches / Names Designation Email Telephone
Penang
Ng Lan Kheng
Au Yeong Pui Nee
Everlyn Lee
Monica Liew
Tan Wei Chuan
Executive Director
Director
Director
Director
Director
+604 218 9268
+604 218 9888
+604 218 9913
+604 218 9888
+604 218 9888
Ipoh
Ng Lan Kheng
Lam Weng Keat
Executive Director
Director
+604 218 9268
+605 253 4828
Melaka
Julie Tan
Gabriel Kua
Executive Director
Director
+603 7610 8847
+606 281 1077
Tax Espresso – July 2019
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Johor Bahru
Chee Pei Pei
Thean Szu Ping
Executive Director
Director
+603 7610 8862
+607 222 5988
Kuching
Tham Lih Jiun
Philip Lim Su Sing
Chai Suk Phin
Executive Director
Director
Associate Director
+603 7610 8875
+608 246 3311
+608 246 3311
Kota Kinabalu
Chia Swee How
Cheong Yit Hui
Executive Director
Manager
+603 7610 7371
+608 823 9601
Sim Kwang Gek Tan Hooi Beng Stefanie Low Thin Siew Chi Julie Tan
Chia Swee How Ang Weina Chee Ying Cheng Tham Lih Jiun Tan Eng Yew
Senthuran Elalingam
Chee Pei Pei Gooi Yong Wei Mark Chan Chow Kuo Seng
Tax Espresso – July 2019
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Theresa Goh
Subhabrata
Dasgupta Philip Yeoh Toh Hong Peir Ng Lan Kheng
Choy Mei Won Suzanna Kavita Loke Chee Kien Shareena Martin Michelle Lai
Peggy Wong Chandran TS
Ramasamy
Larry James
Sta Maria Wong Poh Geng
Gagan Deep
Nagpal
Justine Fan Vrushang Sheth Anil Kumar
Gupta Mohd Fariz Mohd Faruk
Kelvin Kok
Au Yeong
Pui Nee Everlyn Lee Monica Liew Tan Wei Chuan Lam Weng Keat
Tax Espresso – July 2019
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Gabriel Kua Thean Szu Ping Philip Lim
Su Sing
Sumaisarah
Abdul Sukor
Lily Park
Sung Eun
Chai Suk Phin Cheong Yit Hui
Tax Espresso – July 2019
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Tax Espresso – July 2019
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