Synergy Management Services

e-MIT No. 36/2008
11 November 2008

TO ALL MEMBERS

TECHNICAL

1. Preparation of Worksheets (Helaian Kerja)

The IRB has issued a letter to the professional bodies dated 24 October 2008 clarifying the above issue. The IRB confirmed that the worksheets (i.e. Helaian Kerja) are provided as a guide. Taxpayers and tax agents are free to prepare their own working papers or formats for tax computation purposes. What is essential is that taxpayers need to be able to support the relevant claims made in a tax computation in the event of a tax audit. For repayment or refund cases, the worksheet HK3 or other relevant worksheets must be prepared and submitted to the IRB. To view the letter, please click HERE.

2. Income Tax (Exemption) (No. 11) Order 2008 [PU(A) No. 410/2008]

For the years of assessment 2009 to 2013, statutory income in relation to advisory fees received for the structuring and listing of a foreign corporation or the listing of a foreign investment product on a stock exchange that is a body corporate approved by the Minister to be a stock exchange under the Capital Markets and Services Act 2007 (CMSA) by a member of the due diligence working group established under the “Guidelines on Due Diligence Conduct For Corporate Proposal” pursuant to Section 337 of CMSA and who is:

(a) a holder of a Capital Markets Services License granted under Section 61 of the said Act who carries on the regulated activity of advising on corporate finance;

(b) a registered person under subsubparagraph 76(1)(a) of the said Act who carries on the regulated activity of “Advising on corporate finance” as specified in Part I of Schedule 4 of the said Act; or

(c) a specified person under Schedule 3 of that Act,

shall be exempted from tax.

3. Service Tax – Extension of scope of taxable services for the advertising industry

With reference to above (please refer to item 5 of the e-MIT No.35/2008), the Institute would like to inform that the implementation of the directive to subject all advertising costs, involving those of production houses and printing companies, has been deferred until further notice from the Royal Customs, Malaysia.

4. Double Taxation Relief (The Government of the State of Qatar) Order 2008 [P.U. (A) 405/2008]

Please note that the DTA signed by Malaysia with the State of Qatar has been gazetted but not entered into force yet. It shall have effect from the year of assessment beginning on or after 1 January in the calendar year following the year in which this agreement enters into force; except that in respect of petroleum tax, it will be effective from the year of assessment beginning on or after 1 January in the second calendar year following the year in which this agreement enters into force.

CONTINUING PROFESSIONAL DEVELOPMENT (CPD)

We wish to highlight our forthcoming CPD programmes:

Seminar: The Sales & Services Taxes – What You Should Know

Sime Darby Convention Centre, Bukit Kiara, Kuala Lumpur

2 December 2008, 9.00 am – 5.00 pm

Below are the topics to be discussed in the seminar:

a) The Sales Tax – Issues and Refunds

Speaker: Representative from Internal Tax Division, Royal Customs Malaysia

b) The Service Tax – Issues and Updates

Speaker: Mr Sitartha Raja Kumaran, Executive Director – Indirect Tax Advisory Group,

PricewaterhouseCoopers Taxation Services Sdn Bhd

c) Applying and Enjoying Import duty and Sales Tax Exemption

The areas to be covered includes the government policy on exemption and qualifying sectors, qualifying criteria of goods, step by step understanding of the exemption exercise and conditions of approval-keeping what you have been granted.

Speaker: Mr Tan Eng Yew, Executive Director, Indirect Tax Practice, KPMG Tax Services Sdn Bhd

d) Forum Discussion: Preparing for the Goods and Services Tax (GST) – what should you do now?

The Government has decided that the implementation of the goods and services tax (GST) be deferred from 1.1.2007 to a date to be announced. The Government’s decision will give the public the opportunity to know and understand GST better, and provide businesses lead time to prepare for possible adjustments in business systems and processes, development of software and training of personnel.

Speakers/Panelists:

Mr Subromaniam a/l Tholasy, Senior Assistant Director of Customs, GST Unit, Royal Customs Malaysia

Mr Wan Heng Choon, Senior Executive Director – Indirect Tax Advisory Group, PricewaterhouseCoopers Taxation Services Sdn Bhd

Mr Bhupinder Singh (invited), Executive Director, Ernst & Young Tax Services Sdn Bhd

Workshop: Introduction to Corporate Taxation & Self Assessment System

Speaker: Mr Chow Chee Yen

Time : 9.00 am – 5.00 pm

Date Venue

18 – 19 Nov Holiday Inn, Kuching, Sarawak

5 – 6 Dec Legacy Hotel, Malacca

10 – 11 Dec Casuarina Hotel, Ipoh

The objective of the workshop is to enable participants to have a basic understanding of the essential areas of corporate taxation under the self-assessment system.

Practitioners Update

Speaker: Mr Harvindar Singh

Time: 9.00 am – 5.00 pm

Date Venue

9 Dec Legacy Hotel, Malacca

10 Dec Hyatt Regency Hotel, Johor Bahru

22 Dec Hyatt Regency Hotel, Kota Kinabalu

23 Dec Holiday Inn, Kuching

“Practitioners Update” is brought to you by the Malaysian Institute of Taxation to keep you updated on recent changes in legislative provisions and practices that took place during the second half of 2007 and the first half of 2008. The programme provides a good opportunity for you to raise or clarify any technical and operational issues you may have.

For further information, kindly contact the CPD Secretariat at 03-2162 8989:

Ms Latha ext 108 or latha@mit.org.my

Cik Ally ext 113 or cpd@mit.org.my

Cik Nur ext 106 or nur@mit.org.my

e-MIT No. 35/2008
3 November 2008

TO ALL MEMBERS

TECHNICAL

1. Public Ruling No. 3/2008 – Entertainment Expense

The Inland Revenue Board has issued the above Public Ruling on 22 October 2008. This new Ruling supersedes Public Ruling No.3/2004 (issued on 8 November 2004) and the Addendum to Public Ruling No.3/2004 (issued on 23 August 2007) on the same subject matter. The new Ruling is effective for year of assessment 2008 and subsequent years of assessment.

Members are informed that the professional bodies were not consulted on the new Public Ruling.

2. Income Tax (Exemption) (No. 9) Order 2008

For the years of assessment 2009 to 2011, statutory income derived from a business of dealing in non-ringgit sukuk that originates from Malaysia and issued or guaranteed by the Government of Malaysia or approved by the Securities Commission under the Capital Markets and Services Act 2007 by a Malaysian resident who is:

(a) a holder of a Capital Markets Services License granted under Section 61 of that Act;

(b) a registered person under subsubparagraph 76(1)(a) of that Act; or

(c) a registered person under subsection 76(2) of that Act.

shall be exempted from tax provided that such dealing is carried on through the proprietory account of such person.

Such dealing shall be treated as a separate and distinct source of business and activity and separate accounts are to be maintained by such person.

3. Income Tax (Exemption) (No. 10) Order 2008

For the years of assessment 2009 to 2011, statutory income derived from the regulated activity of dealing in securities and advising on corporate finance relating to the arranging, underwriting and distributing of non-ringgit sukuk that originates from Malaysia and issued or guaranteed by the Government of Malaysia or approved by the Securities Commission under the Capital Markets and Services Act 2007 by a Malaysian resident who is:

(a) a holder of a Capital Markets Services License granted under Section 61 of that Act;

(b) a registered person under subsubparagraph 76(1)(a) of that Act;

(c)a registered person under subsection 76(2) of that Act; or

(d) a specified person under Schedule 3 of that Act who carries on the regulated activity of advising on corporate finance solely incidental to the carrying on of its business or the practice of his profession.

shall be exempted from tax.

Such activity shall be treated as a separate and distinct source of business and activity and separate account are to be maintained by such person.

4. Minutes of Filing Programme Working Group Meeting (DESIRE 04/08)

The minutes for the Filing Programme Working Group Meeting No. 04/2008 held on 12 September 2008 have been issued on 23 October 2008. Members are encouraged to review the minutes to have a clear understanding of what to expect in the coming year and also to raise any comments or issues quickly so that adjustments/clarifications may be made.

5. Service Tax – Extension of scope of taxable services for the advertising industry

Any person or agency who provides advertising services and having a total annual sales turnover of more than RM300,000 is subject to service tax. The guidelines issued by the Customs Department on service tax further clarifies that the advertising industry consists of 3 groups of activities, namely, advertising agency activities, media house activities and production houses or printing activities. Taxable services include the provision of displaying services provided by television and radio networks, newspapers and magazines and advertising agencies, etc. However, production houses and printers produce advertising materials only and do not provide advertising services.

The Institute was informed that the Internal Tax Division of the Customs Office in Kuala Lumpur has issued a letter stating that with effect from 1 August 2008, all advertising costs involving production houses and printing companies, if they are supplied by advertising agencies or media houses, are subject to service tax. However, production houses and printers need not be licensed for service tax purposes as they are not taxable person. The Institute is currently seeking further clarification from the Customs Department on this matter.

6. Investigation and Disciplinary Rules

Members are informed that the MIT Council has recently approved the Investigation and Disciplinary Rules of the Institute. A copy of the Rules is available at our website. Please click here for more information about the Rules.

Click HERE for printer-friendly version of this circular.

For queries or feedback on the MIT e-circular, please email communications@mit.org.my.

Disclaimer
Although the Malaysian Institute of Taxation has taken all reasonable care in the preparation and compilation of the information contained in the MIT e-circular, the Institute / each party providing the material displayed herein expressly disclaim all and any liability or responsibility to any person(s) for any errors or omissions in the contents of the MIT e-circular or for anything done or omitted to be done by any such person in reliance whether wholly or partially, upon the whole or any part of the contents of the MIT e-circular.

This message was brought to you by MIT

e-MIT No. 34/2008
28 October 2008

TO ALL MEMBERS

INVITATION TO PARTICIPATE IN THE MIT LOGO DESIGN CONTEST

We are pleased to inform that the Malaysian Institute of Taxation (MIT) is proposing to change its corporate logo. As such, we wish to organise a Logo Design Contest which will be open to participation from students from the local Institutes of Higher Learning, employees of advertising and design agencies, MIT members and MIT staff. The winner of the contest will be accorded due recognition by MIT.

Various developments have impacted the tax profession. As such, it is felt that MIT should rebrand itself in order to advance the Institute’s objective of projecting itself as the premier body for tax professionals.

Please refer below for more information on MIT and, the terms and conditions of the contest.

Brief on MIT

The Malaysian Institute of Taxation (MIT) was established on 1 October 1991 and officially launched on 17 February 1992 by the then Deputy Minister of Finance. It is governed by a 20-member Council and has branches in major states. Since its inception, the logo of the Institute has not been reviewed.

There is a need for MIT to keep up with the changes that have taken place. The Chartered Institute of Taxation (CIOT) which is a premier body for tax professionals in the United Kingdom has achieved a very high standing over the years. In line with this, MIT, which has been in existence for over 17 years, aims to achieve due recognition if possible.

A new name for MIT could be the Chartered Tax Institute of Malaysia.

Mission Statement:

To be the premier body providing effective institutional support to members and promoting convergence of interests with government, using taxation as a tool for the nation’s economic advancement; and to attain the highest standard of technical and professional competency in revenue law and practice supported by an effective secretariat.

Objectives:

· To provide an organisation for persons interested in or concerned with taxation matters in Malaysia.

· To advance the status and interest of the taxation profession which involve regular liaison with the tax authorities (Inland Revenue Board, Royal Customs Department and Ministry of Finance).

· To exercise professional supervision over the members of the Institute and to frame and establish rules in matters pertaining to professional conduct.

· To provide an opportunity for persons interested in joining the tax profession via professional examinations conducted by MIT.

Logo:

The criteria for a good logo would include the following:

· Ability to represent an accurate reflection of the Institute

· A refreshing look that exemplifies energy and forward thinking

· Simple in design and is legible

· Has appealing colours

· Has relevant graphics to portray the desired image and impact

Terms & Conditions:

1. All students from the local Institutes of Higher Learning, employees of advertising and design agencies, MIT members and MIT staff are welcome to participate in the contest.

2. Designs should be submitted on an A3 format and the size of the logo should not be less than 15 x 15 cm. Participants should also submit their work in CDs and the softcopy should contain all the elements with detailed description of the design. The design should be in .jpeg, .gif, or .tiff format.

3. The colour design should be submitted along with a monochrome version to allow its reproduction in one-colour ink.

4. The work should reflect MIT’s Mission and Objectives (as mentioned above).

5. The theme for the design is Corporate Contemporary.

6. Designs should be original and unpublished, free technique and limited to a maximum of 3 colours.

7. Each participant can submit as many designs as desired but is only entitled to win one prize.

8. MIT reserves the property right and use of the awarded work, as well as the right of publication.

9. In all such events, all decisions of MIT will be final and no discussion or correspondence will be entertained.

10. All entries are sent entirely at the risk and expense of the participants.

11. Write your name, identity card number, postal address, contact number and e-mail address and the name of your college / organisation, at the back of your submission.

12. Prizes:

1st Prize : RM3,000 with certificate of merit

2nd Prize : RM2,000 with certificate of merit

3rd Prize : RM1,000 with certificate of merit

2 Consolation prizes : RM500 with certificate of merit

13. All entries can be submitted from 28 October 2008 until 20 November 2008.

14. Designs should be submitted to:

THE MALAYSIAN INSTITUTE OF TAXATION

(Logo Design Contest)

Public Relations Committee

Unit B-13-2, Block B, 13^th Floor

Megan Avenue II

No.12 Jalan Yap Kwan Seng

50450 Kuala Lumpur

15. The copyright and all other intellectual property rights of whatever nature in the design submitted shall remain intact with MIT. All designs submitted to MIT will not be returned.

16. For institutions of higher learning, entries should be accompanied by a supporting letter from the Head of Department/Faculty of the School.

17. Participation in this competition implies full acceptance of the terms hereof stated.

For more information, please contact the MIT Secretariat at 03-2162 8989 or visit our website at www.mit.org.my.

e-MIT No. 33/2008
28 October 2008

TO ALL MEMBERS

TECHNICAL

1. Double Taxation Agreements (DTA) with Myanmar and Chile

Please note that the DTAs signed by Malaysia with Myanmar and Chile respectively have entered into force. The DTAs are effective from the year of assessment beginning on or after 1 January 2009 for income tax and withholding tax; whilst in respect of petroleum tax, it will be effective from the year of assessment beginning on or after 1 January 2010.

2. Income Tax (Exemption) (No. 8 ) Order 2008 [P.U.(A) No. 378/2008]

From the year of assessment 2008 till year of assessment 2010, a Malaysian resident company incorporated under the Companies Act 1965 is exempted from payment of income tax on net income received from the sale of certified emission reduction [i.e. gross income from the sale less expenditure (not being capital expenditure) incurred for the purposes of obtaining certified emission reduction].

“Certified emission reduction” is defined to mean a Kyoto Protocol (an international agreement relating to United Nations Framework Convention on Climate Change) unit equal to one metric tonne of carbon dioxide equivalent, calculated in accordance with Kyoto rules and is issued for gas emission reductions from an activity of clean development mechanism project approved by the Ministry of Natural Resources and Environment.

3. Public Relation Officers for Tax Clearance Letters

The IRB has released a list of public relations officers who can be contacted to expedite the issuance of Tax Clearance Letters. The list can be viewed on the website of the Inland Revenue Board (IRB).

4. Remission of Penalty on Service Tax

The Royal Customs Malaysia has issued a circular on 6 October 2008 informing that for companies providing professional, consultancy and management services that are licensed in 2008, the penalty imposed in respect of service tax for taxable period from January to June 2008 will be remitted, provided that service tax has not been collected from clients/ customers.

It was clarified over telephone conversation with the Internal Tax Division that the penalty referred to in the circular is the late payment penalty under Section 16 of the Service Tax Act 1975. The relevant RCM circular has been uploaded to the Institute’s website. Members may contact Tuan Hj Md Basri bin Bahron of RCM, Internal Tax Division, at 03-8882 2424 for further clarification.

5. Deferment of Temporary Closure for e-Filing system for e-C 2008 and e-R 2008

As announced earlier, the IRB has indicated that there will be a temporary closure of e-filing system for e-C 2008 and e-R 2008 from 1-9 November 2008 for maintenance purposes.

Following the appeal of the Institute, the IRB has agreed to defer the temporary closure to 16-20 November 2008, so that the filing of tax returns by companies with financial year ended 31 March 2008 will not be affected.

6. Issues and Comments Relating to Tax Audits and Investigations

The Institute will be arranging for a Dialogue with the tax audits and investigations department of IRB next month. We would therefore appreciate if members could send in comments and issues they need clarification particularly on the practice of tax audits and investigations immediately for due consideration by the Technical and Public Practice Committee before submission to the IRB. It is hoped that members take the opportunity to submit issues to the Institute so that effective representation can be made to the tax authorities.

You may write in to the Institute or email to the Technical Manager at kslim@mit.org.my on or before 31 October 2008.

7. Issues and Comments Relating to Customs Practices and Indirect Taxation]

The Institute is scheduled to meet the Royal Customs Malaysia at the Customs-Private Sector Consultative Panel Meeting to be held next month. We would therefore appreciate if members could send in suggestions, especially those relating to technical interpretation, administrative/operational aspects of indirect taxation to the Institute before 31 October 2008 for due consideration by the Technical and Public Practice Committee before submission to the Royal Customs Malaysia. You may write in to the Institute or email to the Technical Manager at kslim@mit.org.my .

8. Recommendations for 2010 Budget Proposals

The Institute is currently preparing a memorandum on Budget 2010 Proposals to be finalised by 13 February 2009 and submitted to the Ministry of Finance (MOF) by end of February 2009.

We invite members to submit views and suggestions on any proposals you want to be considered by 15 December 2008. Please include your rationale for all proposals or suggestions that you feel should be incorporated into the Budget 2010. Only viable suggestions and proposals with the rationale clearly stated will be considered for inclusion in the memorandum.

Please forward all suggestions and proposals to the MIT Technical not later than Monday, 15 December 2008. You may also submit your proposals to kslim@mit.org.my.

e-MIT No. 32/2008
20 October 2008

TO ALL MEMBERS

QUESTIONNAIRE ON A POSSIBLE LOGO AND NAME CHANGE

The Malaysian Institute of Taxation (MIT) was established 17 years ago on 1 October 1991. Since its inception, there has not been a review of the logo. Significant developments and changes have occurred over the past years. There is a need for MIT to re-brand itself in order to keep abreast with the dynamic changes that have taken place. One of the ways for the Institute to re-brand is through a possible name and logo change which will help advance the Institute’s objective to project itself as the premier body for tax professionals.

QUESTIONNAIRE ON A POSSIBLE LOGO & NAME CHANGE