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TaXavvy Issue 6/2019
In this issue:
- Special Voluntary Disclosure Programme (SVDP) – extension of programme period
Subsequent to the issuance of the media releases as reported in TaXavvy 4-2019, the Ministry of Finance (MOF) has issued a media release dated 7 April 2019 to extend the SVDP programme period.
- MSC Malaysia status tax incentive – updates
The MSC Bill of Guarantee No. 5 which aims to provide competitive financial incentives for companies granted MSC Malaysia status has been reviewed by the Malaysia Digital Economy Corporation Sdn Bhd (MDEC) to ensure compliance with the requirements of BEPS Action 5 – Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance. Due to the above review, the grant of MSC Malaysia status and its incentives, including extension of income tax exemption period, or addition of new MSC Malaysia qualifying activities, has been put on hold since 1 July 2018.
Following from the above, MDEC has now announced that moving forward, all new applications from companies for MSC Malaysia status will be eligible for tax exemption on income derived from:- Services activities (the Services Incentive); and / or
- Intellectual property (the IP Incentive)
- Public Ruling 2/2019 – Director’s Liability
The Inland Revenue Board (IRB) has issued Public Ruling 2/2019 - Director’s Liability (“PR 2/2019”), dated 14 March 2019. PR 2/2019 explains the liabilities of a company director in respect of a company’s tax, that is:
- any tax that is due and payable by a company; and
any debt that is due and payable by a company as an employer in relation to tax deductions from emoluments and pensions under the Monthly Tax Deduction scheme.
- National Home Ownership Campaign 2019 – Stamp Duty Exemptions
Following the recent launch of the National Home Ownership Campaign 2019 and in line with the government’s announcement to provide stamp duty exemption for purchases of residential property, the relevant gazette orders have been issued.
- Labuan Leasing Business – revised guideline
A revised Guideline on the Establishment and Operations of Labuan Leasing Business dated 5 March 2019 (“the revised guideline”) has recently been issued by the Labuan Financial Services Authority (“Labuan FSA”) which replaces the earlier guideline dated 29 December 2017 (“the earlier guideline”). The revised guideline is effective from 1 January 2019.
The Labuan FSA has also removed the related Frequently Asked Questions on Labuan Leasing Business from their website.
- Guideline on work permit application for licensed and non-licensed Labuan entities – new guideline
The Labuan FSA has issued a new Guideline on Work Permit Application in Labuan IBFC for Licensed and Non-licensed Entities dated 2 April 2019. This guideline covers both licensed and non-licensed entities, and replaces the previous guidelines for licensed and non-licensed entities, both dated 25 February 2015, including the Clarification Note for Guidelines on Work Permit Application in Labuan IBFC for Licensed and Non-licensed Entities (Clarification Note) issued on 13 March 2015.
- Incentives for Less Developed Areas – updated guideline
The guideline has been updated to include the eligibility criteria in respect of application for stamp duty exemption on transfer or lease of land or building used.
- Contribution made to SOCSO in respect of the Employment Insurance System
The Chartered Tax Institute of Malaysia (CTIM) has sought clarification from the IRB on whether the employee’s contribution made to SOCSO in respect of the Employment Insurance System (EIS) is an allowable deduction for personal income tax purposes. The IRB has clarified that the EIS contribution will not be an allowable deduction as it is not a contribution made under the Employees’ Social Security Act 1969.
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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