Friday, 3 April 2020

Tax Relief Proposals for SMEs

This article is written by S. Saravana Kumar and Yap wen Hui and was originally published in the Malay Mail. Reproduced with permission.

The movement control order (MCO) has affected all of us, from individual and businesses. However, as majority of the business establishments in Malaysia are small and medium enterprises (SMEs), they are the worst hit sector in Malaysia. Although the SMEs welcome the extension of time for tax filings and payments, they are seeking for more assistance from the Government such as some special tax relief. Some additional tax relief measures that the Government can consider are:-

  • A lower corporate tax rate or a tax rebate of RM 250,000 in the year of assessment (“YA”) 2020 for SMEs that do not retrench its employees. The tax rebate can be modified depending on the SMEs turnover size and number of employees.
  • Double deduction on all financing costs such as interest, guarantee fees, arranger fee etc on the financing obtained by SMEs in 2020 provided the financing is used wholly as working capital for the SMEs’ business and there is no retrenchment of employees.
  • Double deduction on expenses incurred to purchase equipment to facilitate the work from home concept during the MCO period. This can include the expenses to purchase laptops and subscribing to online communication applications.
  • Double deduction on office, factory, warehouse and workers’ hostel rental expenses for at least 6 months beginning March 2020 or alternatively, a special tax rebate for landlords who waive rental during the same period.
  • Accelerated capital allowance and industrial building allowance for SMEs that incur capital expenditure to acquire additional equipment and building in the YA 2020.
  • Ease the conditions for SMEs to claim the allowance for increased export. 
  • Tax credit arising from overpayment of taxes in the past can be used as a tax credit for future tax obligations including for the YA 2020.
  • Waiver or reduction in withholding tax and service tax on payments made to non-residents for online business promotion initiatives. This will help to reduce the cost of doing business as some SMEs are bearing the withholding tax and service tax on behalf of the non-residents.
  • (Waiver of sales tax for taxable products manufactured from March 2020 to year-end.
  • A longer and flexible instalment scheme for all kinds of tax payments, including income tax and customs duties.
  • Suspension of civil suit proceedings for non-payment of tax until 15 October 2020 to enable taxpayers to focus on rebuilding their business rather than litigating in court especially for the first 6 months.
  • Suspension of tax audits and tax investigations for 6 months until end September 2020 to enable SMEs to focus on their business. Criminal investigation for tax and custom offences can continue.
  • Stamp duty waiver for financing documents executed between 1 March to 31 December 2020.
  • Temporary waiver of service tax on SMEs involved in the service sector such as hospitality, food and beverage and consultancy with an annual income of RM 2.5 million or less in 2020.
  • Temporary suspension of sales tax on products manufactured in Malaysia in 2020.

These proposals may help SMEs to weather the present challenges and express the Government’s empathy on the challenges faced by the SMEs.

* S. Saravana Kumar is a tax lawyer and partner with Rosli Dahlan Saravana Partnership (RDS). He was recently named as one of the top 100 lawyers in Malaysia by the Asia Business Law Journal.
* Yap Wen Hui is a legal and tax trainee with RDS. A barrister by training, she read law at the University of Warwick.

Thursday, 12 March 2020

Malaysia Master Tax Guide 2020 launched!

Our latest Malaysia Master Tax Guide 2020 is up for sale! Thanks to our Consultant editor, Mr K. Sandra Segaran and our technical advisor, Dr Veerinderjeet Singh, our latest Master Tax Guide, updated for all law changes up till 1 February 2020 would be able to assist readers on the following:-

  • Preparation on income tax return 
  • Gives readers a clear understanding of their tax liabilities and entitlements 
  • Helps to understand and mitigate the risk of non-compliance and unnecessary penalty exposure
  • Helps to understand current tax laws and incorporates the latest tax changes made in the 2020 Budget
  • Gives readers an understanding on investment incentives in detail with specific examples. 

Buy your copy today!

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia 

Thursday, 5 March 2020

Australia: An HR guide to the 2020 annualised wage changes

Author: Aaron Goonrey (Partner, Lander & Rogers)

This article was originally published in Lexology.

Do you have annualised wages in your organisation? This guide will help you get prepared for the 1 March 2020 changes.

The concept of annualised wages under modern awards and their impact on existing employment arrangements has left many HR practitioners bewildered. There is one certainty – it is time to start assessing your employees’ existing annualised wage or salary arrangements with modern award obligations in mind. This will include reconciling the hours award covered employees work to ensure they are adequately remunerated for any award entitlements they should receive, even if they are paid a salary under a contract of employment.

The decision
In July 2019, the Fair Work Commission handed down a decision for annualised wages as part of its four yearly review of modern awards (the decision can be accessed here). The decision requires employers to comply with certain new modern award annualised wage clauses from 1 March 2020 — but only in relation to employees who are paid an annualised wage, as opposed to a salary under a contract of employment.

There are three different types of annualised wage provisions. For the purposes of this article, we will refer to the Clerks Award to illustrate the changes brought about by this decision.

Are you required to do anything differently?

Tuesday, 25 February 2020

Covid-19 and Malaysia's Economic Stimulus Package

Malaysia has confirmed a total of 22 cases as of 25 February 2020 and so far 20 patients have recovered. In order to treat Covid-19 suspected and positive cases, The Ministry of Health had expedite Covid-19 screening at 48 hospitals and announced 26 referral hospitals. The Government started taking stricter control measures after discovering the 14th case which occurred through a human-to-human transmission. 

The most affected sectors in Malaysia are the Travel and Tourism and associated sectors such as accommodation (Hotels) as they have been getting a lot of cancellations from tourists ever since the outbreak. Bank Negara Malaysia announced that the Covid-19 outbreak will affect Malaysia's economic growth in Q1 2020. 

Analyst and industry players hopes that the Government will introduce a stimulus package to stimulate Malaysia's economy and lighten any adverse repercussions from the Covid-19 outbreak. A stimulus package is soon to be announced and the followings are some of the proposed measures by experts: 

 * EPF contribution rate reduction for affected sectors. 

 * Incentives and Tax rebates for affected sectors. 

 * Discounts for affected sectors. 

 * Stimulus package for the services and manufacturing sector to boost economic growth. 

 * Reduction in borrowing cost.

Let's hope for some exciting measures to be announced in the upcoming stimulus package. 

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia 

Friday, 14 February 2020

Singapore continues to clamp down on PDPA breaches

While the Personal Data Protection Act (PDPA) had come into effect in phases from 2013 to 2014, effectively at least 5 years ago, it is quite alarming to find that the number of breaches reached an all time high in 2019.

41 organisations were slapped with fines in 2019, while plenty more were given directions and warnings to put necessary policies and practices in place. The total penalties appear to have reached more than $1.6m for 2019. Arguably, this was skewed by the $1m penalty dished out in respect of the incredible medical record data breach that occurred last year.

Nevertheless, for the start of 2020, at the time of this article, a total of 14 organisations were found in breach of the PDPA, with a total of $150,000 penalties already dished out! Unless Singapore organisations take the regulations more seriously, we could see the amount of breaches for 2020 overtake 2019.

Monday, 10 February 2020

Employment guidelines for dealing with the coronavirus

Author: Donovan Cheah (Partner, Donovan & Ho)

The Ministry of Human Resources has announced guidelines to employers for dealing with employment issues arising from the 2019 novel coronavirus infections (2019-nCoV) (“Guidelines”).
We have summarised the Guidelines below:

Medical examination
Employees who have returned from countries with 2019-nCoV cases should be examined immediately (at the expense of the employer) by a registered medical practitioner or by a medical officer to ascertain entitlement for sick leave under s 60F of the Employment Act (EA).

Paid sick leave during quarantined period

Wednesday, 5 February 2020

Individual Tax Reliefs: Yay or Nay

The Tax season is just around the corner. Let's take a look at some of the claims that are eligible to be claimed for a Malaysian Tax Resident Individual for the Year of Assessment 2019.

a) Self and Dependent relatives - RM9,000

b) Spouse/payment of alimony to former wife - RM4,000

c) Each unmarried children below 18 years old - RM2,000

d) Each unmarried children above 18 years old & receiving further education - RM8,000

e) Disable child and disable individual - RM6,000

f) Disable spouse - RM3,500

g) EPF contributions - RM4,000

h) Breastfeeding equipment - RM1,000
     * Child 2 years and below and claimable only for women tax payers once every 2 years

i) Child care fees- RM1,000
    * must be a registered child care centre and claimable for child 6 years and below

 j) Sosco - RM250

k) Life Insurance - RM 7,000 (Pensionable Public servant category)
                             - RM3,000 (Other than Publis servant category)

l) Medical Expenses - RM6,000 (For serious disease)
                                  - RM500 (Full medical examination) 

      For Parents          - RM 5,000 (For parents undergoing treatments/special needs)
                                  - RM1,500 (For mother) 
                                  - RM1,500 (For father) 

m) Private Retirement Scheme - RM3,000

n) Education and medical insurance - RM3,000

o) Education fees - RM7,000 

p) Net deposit is SSPN - RM8,000

q) Lifestyle - RM2,500 (includes reading materials, Purchase of PC, Smartphone/Tablet, internet bill and sports equipment.) 

r) Supporting equipment - RM6,000 (For disable self, child, spouse or parent)

Happy BE filing everyone! :-)

Lochana Nanthacumar
Content Management Analyst
Wolters Kluwer Malaysia 

Tax Relief Proposals for SMEs

This article is written by S. Saravana Kumar and Yap wen Hui and was originally published in the Malay Mail.  Reproduced with permission....