SE Lai CK Alerts #05-2014 (Public Rulings 2-2014, 3-2014, 4-2014, 5-2014)

Important Circular 

Dear Value Clients and Associates 

The following Public Ruling have been issued by the IRB recently: 

Public Ruling 2-2014 – Taxation of Investors on Income from Foreign Fund Management Company (Issued 28 April 2014)

1. A Foreign Fund Management Company (FFMC) is a company incorporated in Malaysia and is licensed for the regulated activity of fund management under the Capital Markets and Services Act 2007[Act 671].
2. The PR explains the tax treatment of income received by foreign and local investors that engage the services of a FFMC.
   

Public Ruling 3-2014 – Taxation of Limited Liability Partnerships (Issued 9 May 2014)

1. A Limited Liability Partnership (LLP) is a hybrid business vehicle registered under the LLP Act, 2012, with features of both a company and a partnership. Its principal feature is that a LLP provides limited liability to its partners.
2. The PR explains the tax treatment of a LLP, including:
   • Rates of tax
   • Restrictions on partners’ salary deductions
   • Distributions of profits to partners
   • Claims for capital allowances
   • Submission of estimate of tax payable
   • Taxation of the partners of a LLP
   • Conditions for conversion of a conventional partnership or a company to a LLP

Public Ruling 4-2014 – Deferred Annuity (Issued 26 June 2014)

1. A Deferred Annuity refers to:
   • An insurance or takaful contract, plan, scheme or policy
   • Where a series of periodic payments (Annuity Income) are paid to the insured individual for a specific period of time.
2. The PR explains:
   • The deductibility of premiums paid by an individual for a Deferred Annuity
   • The exemption of annuity income for an individual
   • The exemption of income of a Life Insurer/Takaful Operator from an investment made out of a life or family fund in respect of a Deferred Annuity
     

Public Ruling 5-2014 – Ownership and Use of Asset for the Purpose of Claiming Capital Allowances (Issued 1 July 2014)

The PR explains the ownership and use of an asset, and the effect on whether a person qualifies to claim capital allowances in respect of that asset with regard to the determination of statutory business income of that person. 

Note: PDF copies of the above Public Rulings are attached for your kind attention and reference. Relevant explanatory notes are extracted from technical alerts issued by the Chartered Tax Institute of Taxation, where applicable Please do not hesitate to contact us should you require clarifications on the above.

 4 July 2014 

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