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Direct Taxation

Rules/Orders/Regulations recently gazetted

The following Rules/Orders/Regulations have been recently gazetted and have come into operation as follows:-

P.U. (A) Title Date Gazetted Remarks
Income Tax
403/2017 Income Tax (Automatic Exchange of Financial Account Information) (Amendment) Rules 2017 22 December 2017 These Rules amend the Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 [P.U. (A) 355/2016]
410/2017 Income Tax (Set-Off for Tax Charged on Actuarial Surplus Under Takaful Business) Rules 2017 26 December 2017 These Rules are deemed to have effect from the year of assessment 2015.
411/2017 Income Tax (Exemption) (No.3) 2014 (Amendment) Order 2017 27 December 2017 This Order amends the Income Tax (Exemption) (No. 3) Order 2014 [P.U.(A) 167/2014] and comes into operation on 1 January 2018.
412/2017 Income Tax (Exemption) (No.11) 2016 (Amendment) Order 2017 27 December 2017 This Order amends the Income Tax (Exemption) (No. 11) Order 2016 [P.U. (A) 345/2016]
413/2017 Income Tax (Exemption) (No.12) 2016 (Amendment) Order 2017 27 December 2017 This Order amends the Income Tax (Exemption) (No. 12) Order 2016 [P.U. (A) 346/2016]
416/2017 Income Tax (Country-By-Country Reporting) (Amendment) Rules 2017 27 December 2017 These Rules amends the Income Tax (Country-By-Country Reporting) Rules 2016 [P.U. (A) 357/2016]
420/2017 Income Tax (Deduction from Remuneration) (Amendment) Rules 2017 27 December 2017 These Rules amends the Income Tax (Deduction from Remuneration) Rules 1994 [ P.U. (A) 507/1994] and comes into operation on 1 January 2018.
Labuan
409/2017 Labuan Business Activity Tax (Country-By-Country Reporting) Regulations 2017 26 December 2017

 

To read the Rules/Orders/Regulations in full at the official website of the Attorney-General’s Chambers

PUBLIC RULINGS NO.9/2017, NO.10/2017 AND NO.11/2017

The Inland Revenue Board of Malaysia (LHDNM) has uploaded the Public Rulings (PR) No.9/2017, PR No.10/2017 and PR No.11/2017 dated 22 December 2017on its website as follows:

1)    PR No.9/2017 on Reinvestment Allowance Part I – Manufacturing Activity

The objective of this PR is to assist a company resident in Malaysia and engaged in manufacturing activities in ascertaining its eligibility to claim reinvestment allowance (RA) and provide clarification in relation to projects that qualify for RA; expenditures that qualify for RA; period of eligibility; and  computation of RA.

The contents of PR No.6/2012 have been rewritten, rearranged and updated.

2)    PR No.10/2017 on Reinvestment Allowance Part II – Agricultural and Integrated Activities

The objective of this PR is to assist a company resident in Malaysia and engaged in agricultural and integrated activities in ascertaining its eligibility to claim RA and provide clarification in relation to projects that qualify for RA; expenditures that qualify for RA; period of eligibility; and computation of RA.

The contents of PR No.6/2012 have been rewritten, rearranged, updated and this PR should be read together with PR No.9/2017.

3)    PR No.11/2017 on Residence Status of Individuals

The objective of this PR is to explain the determination of residence status for individuals. This PR replaces the PR No.6/2011 dated 16 May 2011.

To read the PRs in full on the websites of the LHDNM.

 

Amendments made to Automatic Exchange of Financial Account Information Rules 2017, 26 December 2017

The Income Tax (Automatic Exchange of Financial Account Information) (Amendment) Rules 2017 was issued on 22 December 2017.

The abovementioned Rules amend Income Tax (Automatic Exchange of Financial Account Information) Rules 2016 as follows:

  • Rule 3 — Amendment to the definition of “Standard”
  • Rule 3A — New rule added on the application of the Standard
  • Rule 4(4)(c) — New sub-rule added on the due diligence obligations
  • Rule 5(5A) — New sub-rule added on modifications to due diligence obligations
  • Rule 13 — New rule added on special provision for reporting of pre-existing individual accounts
  • Schedule 2 — New schedule added on “Excluded Accounts”.

Source: Federal Gazette Portal of the Attorney General’s Chambers, 22 December 2017

 

IRB issues revised PR on residence status on individuals, 26 December 2017

The Inland Revenue Board (IRB) has published a public ruling (PR) on “Residence Status on Individuals” (PR No 11/2017) dated 22 December 2017.

This PR replaces PR No. 6/2011 dated 16 May 2011 and has, amongst others:

  • Paragraph 2.3 — Updated the relevant subsidiary law referred to.
  • Paragraph 4.2 — Updated the tax treatment of resident individuals subject to withholding tax, pursuant to the amendment made to s 109C(4) of the Income Tax Act 1967 and Income Tax (Exemption) (No. 7) (Amendment) Order 2009.
  • Paragraph 6.3.3, Examples 14 and 15 — Inserted a new paragraph and examples to provide further clarification on s 7(1)(c) of the Income Tax Act 1967.

Kindly refer to the IRB website for further details.

Source: IRB website, 22 December 2017

 

IRB issues PR on professional indemnity insurance, 20 December 2017

The Inland Revenue Board (IRB) has published a public ruling (PR) on “Professional Indemnity Insurance” (PR No 8/2017) dated 19 December 2017.

The PR explains:

  • deductibility of premium paid for a professional indemnity insurance (PII) policy, and
  • tax treatment on insurance proceeds received and compensation paid in relation to a PII policy.

This PR replaces PR No. 3/2009 dated 30 July 2009 and contains, amongst others, updated commentary on the tax treatment of PII, insurance proceeds and compensation.

Kindly refer to the IRB website for further details.

Source: IRB website, 19 December 2017

 

IRB updates DTA information, 19 December 2017

The Inland Revenue Board has updated its “Double Taxation Agreement” (DTA) page to include the DTA rates as at December 2017.

Kindly visit the IRB website for further information.

Source: IRB website, 18 December 2017

 


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