SE Lai CK Alerts #02-2016 (Public Rulings issued in 2015)

Important Circular

Dear Value Clients and Associates

We are pleased to compile a listing of Public Rulings issued by the IRB in 2015 for your kind attention. Public Rulings as indicated below, which may considered to be generally applicable or generally of interest to most taxpayers, have been attached with this Alert for your easy reference.

 All Public Rulings, including the attached Public Rulings may also be assessed at  http://www.hasil.gov.my/   (@ Laws and Regulations >> Public Rulings) 

In particular, we wish to draw urgent and particular attention to the following which we anticipate will have wide-ranging tax and accounting impact on SME companies across the board:

  1. Public Ruling 8-2015 (Issued 30 Nov 2015) – Loans or Advances to Directors by a Company
  2. Public Ruling 9-2015 (Issued 3 Dec 2015) – Deduction of Interest Expense and Recognition of Interest Income between Related Persons

Public

Ruling

Issued

Covering

PR attached for reference

01-2015

12 Jan 2015

Club, Association or Similar Organization

  1. Explain the taxation of a club, association or similar institution which is established and controlled by its members.
  2. Replaces the PR No.5/2012 dated 25 June 2012

NO

Please refer to IRB website

02-2015

19 June 2015

Taxation of REITs or Property Trust Fund

  1. Explain the tax treatment accorded to an approved real estate investment trust or a property trust fund (REIT/PTF) in Malaysia.
  2. Replaces PR No. 9/2012 dated 26 December 2012.

NO

Please refer to IRB website

03-2015

29 July 2015

Failure to Furnish Information in Stipulated Period

Explain the income tax treatment of a taxpayer who fails to furnish information within a stipulated period

NO

Please refer to IRB website

04-2015

29 July 2015

Entertainment Expense

  1. Explain:
    • the tax treatment of entertainment expense as a deduction against gross income of a business; and
    • steps to determine the amount of entertainment expense allowable as a deduction.
  2. This PR replaces the PR No. 3/2008 dated 22.10.2008.

YES

05-2015

14 Aug 2015

Taxation of Limited Liability Partnership

  1. Explain the tax treatment of a Limited Liability Partnership.
  2. Replaces the PR No. 3/2014 dated 9 May 2014.

NO

Please refer to IRB website

06-2015

27 Aug 2015

Qualifying Expenditure and Computation of Capital Allowances

  1. Explain:
    • tax treatment in relation to qualifying expenditure on plant and machinery for the purpose of claiming capital allowances; and
    • computation of capital allowances for expenditure on plant and machinery.
  2. Replace PR No.2/2001 which relates to Computation of Initial and Annual Allowance in respect of Plant and Machinery. With the publication of this PR, the Director General has rearranged the contents of the PR No.2/2001 as follows:
    • Qualifying Plant And Machinery For Claiming Capital Allowances (PR No.12/2014); and
    • Qualifying Expenditure And Computation Of Capital Allowances.

This PR relates only to Qualifying Expenditure and Computation of Capital Allowances.

YES

07-2015

22 Oct 2015

Appeal Against Assessment and Application for Relief

  1. Explain:
    • procedures with regard to appeal and application for relief in line with the provisions in the Income Tax Act 1967 (ITA) commencing 24 January 2014;
    • Form Q and Form N appeal procedures; and
    • procedure and application for relief in respect of error or mistake.
  2. Replaces the PR No. 3/2012 issued on 4 May 2012

NO

Please refer to IRB website

08-2015

30 Nov 2015

Loan or Advances to Director by a Company

Explain tax treatment of:

  1. company that provides loans or advances to director of the company without interest or with interest rate lower than the arm’s length rate; and
  2. interest income deemed to be received by the company from the loans or advances.

YES

09-2015

3 Dec 2015

Deduction of Interest Expense and recognition of Interest Income between Related Persons

Explain in relation to a loan transaction between related persons:

  1. when a deduction is allowed in respect of interest expense in computing the adjusted income from a source for the basis period for a year of assessment; and
  2. the recognition of interest income.

YES

10-2015

14 Dec 2015

Investment Holding Company

  1. Explain the tax treatment in respect of an investment holding company resident in Malaysia.
  2. Replaces the PR No. 3/2011 dated 10.03.2011.

YES

11-2015

16 Dec 2015

Tax incentive for Angel Investor

  1. Explain the tax incentive offered to an angel investor who has invested in an investee company.
  2. An angel investor is a high net-worth individual who provides funding needed to start a business in exchange for a share ownership in an investee company. Qualification for tax exemption subject to fulfill of certain criteria by the angel investor

NO

Please refer to IRB website

12-2015

17 Dec 2015

Recovery from Persons Leaving Malaysia

Explain the circumstances and procedures for recovering tax and debts due from taxpayers who will be leaving Malaysia.

NO

Please refer to IRB website

Please do not hesitate to contact our Tax Advisory Services Division if you have any queries on the above.

6 January 2016 

Public-Ruling-4-2015-Entertainment-Expense-29-July-2015Download
Public-Ruling-6-2015-Qualifying-Expd-and-Computation-of-Capital-Allowances-27-Aug-2015Download
Public-Ruling-8-2015-Loan-or-Advances-to-Director-by-a-Company-30-Nov-2015Download
Public-Ruling-9-2015-Deduction-of-Interest-Exp-and-Recognition-of-Interest-Income-between-Related-Persons-3-Dec-2015Download
Public-Ruling-10-2015-Investment-Holding-Company-14-Dec-2015Download