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TaXavvy Issue 3/2019
In this issue:
- Principal Hub legislation – amendments
The law pertaining to Principal Hub (PH) incentive was legislated on 31 December 2018 via 3 gazette orders (refer to TaXavvy 2/2019) which cover the following:
- Companies which are already operating in Malaysia,
- New companies set up in Malaysia, and
- Companies granted approved Operational Headquarters (OHQ), International Procurement Centre (IPC) or Regional Distribution Centre (RDC) status
The gazette orders have now been amended predominantly in respect of the qualifying conditions for the PH incentive.
- MIDA guidelines – revised guidelines for manufacturing and research & development sectors
The Malaysian Investment Development Authority (MIDA) has revised the guidelines in relation to:- Application for manufacturing licence and incentive for manufacturing projects.
- Application for incentives for contract research & development (R&D) and R&D companies.
- Labuan – FAQs on Substantial Activity Requirements
The Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018 (“Substance Regulations”) was legislated on 31 December 2018 to set down the substantial activity requirements imposed on Labuan entities carrying on Labuan business activity.
The substantial activity requirements specify the minimum requirement in respect of:- Number of full time employees in Labuan; and
- Amount of annual operating expenditure in Labuan
The Labuan Financial Services Authority has now issued Frequently Asked Questions (FAQs) on the substantial activity requirements for Labuan entities, dated 25 January 2019.
- Special Voluntary Disclosure Programme – FAQs
The FAQs for the Special Voluntary Disclosure Programme has been updated with the insertion of additional FAQs. The additional questions mainly relate to transfer pricing and income deposited overseas.
- Tax exemption – rental income received by Malaysian resident individuals from a residential property
The Income Tax (Exemption) (No 2) Order 2019 was legislated on 27 February 2019 pursuant to the Budget 2018 proposal on 50% tax exemption on income received from rental of a residential property (i.e. a house, condominium unit, flat or an apartment which is built as a dwelling house).
- Stamp duty – guidelines on application for stamp duty relief
The Inland Revenue Board has issued 2 new guidelines on 26 February 2019 to provide guidance on the qualifying conditions to be fulfilled and the procedures to be followed, when applying for stamp duty relief in respect of:- Instruments made in relation to corporate restructuring schemes, i.e. reconstruction or amalgamation of companies (section 15 relief).
- Instruments made in relation to the transfer of property between associated companies (section 15A relief).
- Status of outstanding gazette orders for proposals from previous Budget announcements
Following dialogues / correspondences between the professional bodies and the Ministry of Finance (MOF), the MOF has provided a status of the outstanding gazette orders for proposals made during previous Budget announcements (Budget 2014 to Budget 2018). The update was provided via MOF’s letter dated 14 February 2019 to the Chartered Tax Institute of Malaysia. MOF informed that the gazette orders for most proposals are currently being drafted, except for a few proposals.
- Public Ruling 1/2019 – Professional Indemnity Insurance
IRB has issued Public Ruling 1/2019 - Professional Indemnity Insurance (“PR 1/2019”) which supersedes Public Ruling 8/2017 - Professional Indemnity Insurance. The key changes in PR 1/2019 is the insertion of new paragraphs and examples.
TaXavvy is a newsletter issued by PricewaterhouseCoopers Taxation Services Sdn Bhd. While every care has been taken in compiling this newsletter, we make no representations or warranty (expressed or implied) about the accuracy, suitability, reliability or completeness of the information for any purpose. PricewaterhouseCoopers Taxation Services Sdn Bhd, its employees and agents accept no liability, and disclaim all responsibility, for the consequences of anyone acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. Recipients should not act upon it without seeking specific professional advice tailored to your circumstances, requirements or needs.
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For earlier issues of TaXavvy, click here.
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