IT IS now mandatory to have the transfer pricing documentation (TPD) to support the arm’s length pricing of transactions undertaken between...
The importance of contemporaneous transfer pricing documentation
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Failure to file tax returns can lead you to jail
THE Inland Revenue Board (IRB) has “turned up the heat” on taxpayers who fail to file their annual tax returns. The IRB is no longer willing to wait...
Is your information with IRB a secret?
TAXPAYERS submit voluminous information annually and upon request to the Inland Revenue Board (IRB). This is done through the filing of annual tax...
How do you resolve disputes with the IRB?
MALAYSIA practises a self-assessment system for income tax purposes – which effectively means that the taxpayer is responsible for filing tax...
Directors’ fiduciary duty and responsibility
IT IS commonly accepted by directors that upon settlement of tax matters with the Inland Revenue Board (IRB) or Royal Malaysian Customs (RMCD), that...
Taxing investment holding company now redundant
THE original intention of introducing a specific provision to deal with investment holding companies in 1993 has disappeared because the main income...
Lingering problems with foreign-sourced dividends
ON DEC 30, 2022, there was a press statement issued by the Ministry of Finance (MoF) which indicated that foreign-sourced dividends will be tax...
Time for fraudsters to stop cheating the taxman
GOOD taxpayers are being cheated by bad taxpayers who intentionally set out to avoid paying taxes or underpay their taxes. Be forewarned that...
Taxation of rental income for individuals
AS individuals with passive rental income need to file personal tax returns by April 30, 2023, this article provides an overview of the taxation of...
Luxury Tax is on the way – what goods will be affected, how will it be implemented?
THERE is a lot of noise around Luxury Tax. Some regard this as taking money from the rich and giving it to the rakyat. There is a lot of uncertainty...
Is the tax position of intangible assets clearer?
MALAYSIA'S Inland Revenue Board (IRB) had in the past taken the view that intangible assets do not qualify as an expense deduction or eligible for...
Time to stop the capital gains tax scaremongering
THROUGHOUT the past two decades, Malaysia has been running a budget deficit. This year’s deficit will be 5% of gross domestic product, amounting to...
E-invoicing – the way forward
THE previous finance minister in his Budget speech in October 2022 indicated that the government would be implementing e-invoicing in phases...
Don’t abuse special voluntary declaration scheme, expert tells taxpayers
The revised Budget 2023 tabled last Friday proposes to revive the Special Voluntary Declaration Programmes (SVDP) with full penalty waiver beginning...
Budget to revive economy, broaden tax base
DESPITE the difficult economic environment domestically and internationally, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has...
Tax Matters – Customs beginning to focus on transfer pricing
IN THE minds of most taxpayers, transfer pricing is an income tax matter. Indirect taxation (sales tax, service tax and customs duties) doesn’t come...
Time to introduce capital gains tax
THE Malaysian capital gains tax regime is confined to gains made from the sale/transfer of real estate. It does not tax any other capital...
Stamp duty – the forgotten tax
GENERALLY, whenever there are transactions, the focus is on income tax, Real Property Gains Tax, sales and service tax and customs duties. The stamp...
Tax planning and minimising tax liability legally
TAX planning is the legitimate right of any taxpayer to manage and minimise taxes within the legal framework. The tax legislation is very specific,...
Valuation and taxation in real property transactions
REAL property transactions are subject to various taxes such as income tax, real property gains tax, and stamp duty. In the past, goods and services...
Are you aware of post import/export audits?
THERE is a general assumption among taxpayers, once the goods have been exported/imported, their responsibilities have been discharged and there...
Budget 2023 – ideas for the government to consider
MALAYSIA has been running a budget deficit since 1998, and Budget 2023, announced by the previous finance minister, was the largest ever budget at...
Tax Matters – Malaysian tax can apply to foreign employment income
THERE are many individuals who live in Malaysia and work for foreign employers. It may due to the fact that the family is in Malaysia or Malaysia is...
Tax Matters – Watch it! Transfer prices now fully transparent
ALL business enterprises except for sole proprietorships which undertake intercompany transactions have now a greater burden to disclose more...
Tax Matters – Is ambiguity a reason to disallow expenses?
THE basic principle for claiming a tax deduction is that the expenditure must incurred wholly and exclusively in the production of income, which can...
Clearing Up The Franchise Fee Confusion
THERE are more than 1,100 franchises registered with the Ministry of Domestic Trade and Consumer Affairs. In 2022, the total sales value exceeded...
Is the Purchase of Software Tax Deductible?
NO business can function in today’s corporate environment without using software. Businesses have to buy or license software. The tax laws regarding...
Tax and Non-Exempt Charities that Receive Regular Donations
THE taxability of donations has come into the limelight recently in the former prime minister’s case where the Inland Revenue Board (IRB) and the...
Noose is Tightening Around Tax Dodgers
THE Inland Revenue Board (IRB) has ratcheted up its operation to unearth delinquent individuals and business enterprises suspected to be outside the...
Report Card on Budget 2023
BUDGET 2023 is focused on helping businesses that are just beginning to recover from the Covid pandemic, and it also targets to help selected...
Wrong Import Codes Will Haunt You Later
ALL goods imported into or exported out of Malaysia must have a Harmonised System (HS) Code. HS Code is used by more than 200 countries as a basis...
Defective Transfer Pricing Documentation is Trouble
ALL pricing of intercompany transactions will require to be documented in the Transfer Pricing Documentation (TPD) which is mandatorily required...
Tax Matters – Budget 2022 measures to spur economic revival
AT RM332.1 billion, Budget 2022 is the largest budget in the history of Malaysia. The clear focus of this budget is to revive the economy and to...
Taxation of severance payments and retirement gratuities
MALAYSIA was battered by the Covid crisis in 2020 and 2021 and the current headwinds blowing from the Russia-Ukraine war and the US-China conflict...
Foreign-sourced income – what is remaining
IN BUDGET 2022, the government announced that it intended to tax foreign-sourced income received in Malaysia from Jan 1, 2022 by all Malaysian tax...
Time to revisit your reinvestment allowance claim
THE recent win in the High Court by Tenaga Nasional Bhd (TNB) in its claim for reinvestment allowance (RA) of RM1.8 billion for 2018 has sent...
Can mistakes in tax returns be rectified?
IT is not uncommon for both corporate and individual taxpayers to inadvertently make mistakes in filing their tax returns. The income tax...
Investors beware – ignore tax perk conditions at your own peril
MALAYSIA spends significant resources in attracting foreign direct investments (FDI) to locate their businesses in Malaysia spearheaded through the...
Tax issues to watch out for when venturing overseas
MALAYSIA is a small economy with a population of 33 million and, therefore, businesses have to expand overseas in order to grow. This is reflected...
Charities and tax exemptions
ANY organisation receiving donations from the public and spending monies on charitable activities without any intention to make profits could be...
Foreign-sourced income U-turn – what’s remaining?
THE government has made a surprising U-turn on Dec 30, 2021 after announcing that foreign-sourced income received in Malaysia by Malaysian tax...
How to encourage voluntary compliance among taxpayers
IN an ideal situation, if taxpayers were to voluntarily comply with their tax obligations, both the taxpayer and the Inland Revenue Board (IRB) will...
Should local companies prepare transfer pricing documentation?
GOOD news for all business enterprises including companies carrying out domestic related party transactions! Such enterprises will be relieved from...
Taxation of cryptocurrencies
CRYPTOCURRENCY is a form of digital money similar to cash such as ringgit and US dollar, which is not controlled by any central bank or anyone....
Opportunity to come clean
THE government has come up with another special voluntary disclosure programme (SVDP) dealing specifically with indirect taxes to be administered by...
Take advantage of your year-end tax breaks
How is foreign sourced income taxed?
THIS is certainly a hot topic as many taxpayers were surprised by the Budget 2022 measure to tax foreign sourced income received by Malaysian...
Not the time to introduce new taxes
THERE has been much discussion on the introduction of new taxes or raising tax revenues by tightening the tax administration. The new taxes that...
Time for IRB to swtich emphasis from tax enforcement to improved tax compliance
IN recent years there has been a significant increase in the level of audit/investigation activities by the Inland Revenue Board (IRB). The...
Income from illegal activities – is it taxable?
ILLEGAL income arises from illegal activities. It is an act which the law disapproves of, or completely bans. There are two types of activities:...
Tax issues regarding bad debts – how to claim for deduction
THE possibility of bad debts is always present in business. It is natural to assume that such bad debts will be tax deductible. However, that is not...
Tax Matters – Time to consider wealth tax
IN 2021, Forbes Asia reported that the wealth of the 50 richest Malaysian individuals increased from US$70 billion to US$90 billion (RM292 billion...
Using tax havens to shelter profits is risky
TAX havens are offshore countries that offers individuals and businesses a tax regime that imposes no tax or minimal tax without the requirement for...
Why transfer pricing documentation is vital
TRANSFER pricing is triggered when there are transactions between associated persons or related parties, one of whom has control over the other or...
Tax Matters – Political parties are exempt from income tax
WITH the possibility of a general election being called anytime before mid-2023, political parties will need to fill their coffers to finance their...
Why the rich have a tough time with capital statements
IT is becoming common for the Inland Revenue Board (IRB) to ask high net worth individuals to account for the movement of their wealth on a...
Tax Matters – Interest-free loans come under scrutiny
PREVIOUSLY we warned readers that Inland Revenue Board (IRB) scrutiny of interest-free loans between related parties was looming, and now it is a...
Issues surrounding real property companies
MALAYSIA does not tax capital gains other than on gains from disposal of real property. The idea of shares being taxed under Real Property Gains Tax...
Directors can be liable to company taxes
IN the current climate, the government is looking for revenue to fund the increase in expenditure to deal with the Covid crisis and to fund the...
Tax Matters – Time to stop retrospective application of laws
TAXPAYERS value legal certainty in the application of laws to enable them to plan so as to avoid being left in the dark with regard to their...
How are individual REIT holders taxed?
LAST WEEK, I have discussed the tax treatment of the distribution of unit trust at the hands of unit holders. Today, the focus will be on real...
Tax Matters – How are individual unit trust holders taxed?
THE unit trust industry is huge in Malaysia and the Securities Commission Malaysia Annual Report 2020 states that funds under the management of unit...
Reconciliation instead of confrontation
THE increasing audit and investigation activities by the Inland Revenue Board (IRB) have resulted in taxpayers and the IRB finding themselves at...
Tax Matters – Reimbursement, disbursement explained
TO the layman, there is little difference between reimbursement and disbursement because both involve the payer being repaid for a payment that has...
Is foreign income taxable?
MALAYSIA taxes income on a territorial basis – income that arises in, derived from or received in Malaysia from outside Malaysia. Most countries in...
Tax residence for individuals explained
UNDERSTANDING the concept of tax residence is important for your taxation status in Malaysia and whenever you undertake transactions overseas....
Time to revamp tax assessment appeal process
TAXPAYERS have the right to appeal against assessments and tax must be paid within the 30 days of the issuance of the assessment, otherwise there...
Relax deadlines during lockdown
THE coming full lockdown will have a severe impact on the majority of businesses particularly SMEs and the services sector. Although many businesses...
Interest-free loans – problem for firms?
INTEREST-FREE loans among corporate groups in Malaysia are a common means of funding entities to carry on their businesses. It is also common for...
Be prepared to face an assertive IRB
WITH the government’s push to increase tax collection, the relationship between the Inland Revenue Board (IRB) and the taxpayers has changed...
Withholding tax on foreign digital services: Yes or no?
BUSINESSES cannot operate without purchasing digital services to serve their customers, deal with suppliers and operate their business functions....
Taxpayer rights explained
DO YOU as a taxpayer know your rights when you are dealing with the Inland Revenue Board (IRB)? As a taxpayer, the fundamental duty is to file your...
Is it fair to impose surcharge?
SURCHARGE is a new concept to the Malaysian tax regime and we do not know the rationale behind it – where additional taxes can be collected by the...
Tax filing – why keep records?
WITH the tax filing for individuals due by April 30 (paper filing) and May 15 (e-filing), it is timely to remind ourselves of the need to keep...
Tax Matters – Educate, instead of penalising, SMEs on compliance issues
THE owners of SMEs in many cases do not understand the difference between themselves as individual shareholders and the company as a separate...
TAX MATTERS – SMEs struggling to comply with transfer pricing documentation requirements
THE Budget 2021 announcements which have now become the law under Finance Act 2020 have made very important changes to the transfer pricing regime...
TAX MATTERS – distinction between avoidance, mitigation and evasion
‘TAX avoidance’ has recently been demonised as an unsavoury practice adopted by taxpayers to avoid paying their due share of taxes. Most people will...
Tax Matters – Treatment of payments made to overseas vendors of digital services
TODAY’S businesses cannot function independently from the digital economy. The digital economy is a result of a transformative process brought by...
Tax Matters – Donations received during GST era haunt charities
THE principal mission of charities is to help society at large i.e. by alleviating poverty, advancing education, advancing community development,...
Tax Matters – Gifts: Are they taxable?
THE taxation of gifts came into limelight when the issue of the RM2.6 billion political donation received from the previous prime minister, Datuk...
Tax Matters – Retail investors in shares, are your gains taxable?
RETAIL investors made big waves on Bursa Malaysia in 2020 and at different times of the year; their participation went up as much as 43% of the...
Tax Matters – Are you aware of the time bar?
ARE you aware that the Inland Revenue Board (IRB) cannot raise tax assessments or tax bills beyond a five-year period? This applies equally to Real...
Tax Matters – 2021 is here, start planning your taxes
WE should all pay the right amount of taxes – not more, not less. Wherever the law permits us to legally reduce our taxes, we should do so. Anything...
Tax Matters – Should GST make a comeback?
IT’S A matter of time before GST is reintroduced. Why? The government cannot keep on borrowing or extracting funds from government-linked companies...
Tax Matters – Capital statements: investigating high net worth individuals
OUR Finance Minister has set himself an ambitious tax collection target of RM174 billion from direct and indirect taxes in budget 2021. This pales...
Tax Matters – How does Budget 2021 affect you?
WHAT is needed to revitalise our economy? The simple answer would be to inject more money into the economy to revive businesses. The fastest way is...