Friday, 24 May 2019

Case Spotlight: Quitting your Company’s WhatsApp Group

by Donovan Cheah (Partner) and Natalie Ng (Pupil in chambers) (Donovan & Ho)
www.dnh.com.my

This article was first published on Donovan & Ho's website on 6 May 2019.


Thinking of quitting your company’s WhatsApp group? Think twice as this may be legitimate grounds to fire you.

In this article, we examine the recent Industrial Court decision in Thilagavathy A/P Arunasalam v Maxis Mobile Sdn Bhd (Award No. 1050 of 2019, 27 March 2019), which involved an employee who was dismissed for quitting the company’s WhatsApp group without their superior’s permission.

Thursday, 16 May 2019

Case Spotlight: Conflict of Interest in Employment

by Donovan Cheah (Partner, Donovan & Ho)
www.dnh.com.my

This article was first published on Donovan & Ho's website on 8 April 2019.

Do you find anything wrong with this scenario?
“Employee X is working for a multinational corporation (“MNC”) as its purchasing officer. Her husband owns a company called Renovator ABC that specialises in office renovations. When the MNC announces its plans to open another branch office in Kuala Lumpur, Employee X recommends that Renovator ABC carry out the office renovations since they are experienced in the industry and can offer a good discount. As per company policy, 3 quotations are obtained from different renovation companies and Renovator ABC ends up being the cheapest priced. Employee X did not specifically tell anybody in MNC that her husband owns Renovator ABC. MNC appoints Renovator ABC to carry out the renovation work at a fee of RM1.2 million."

Situations like the above are referred to as potential “conflicts of interest”. This is because the employee’s personal interests are in conflict with the interests of her employer. In the scenario above, Employee X stands to benefit financially from Renovator ABC’s appointment, since it is her husband’s company. However, as a purchasing officer of MNC, she also has obligations to ensure that the best supplier is selected, and price may not be the sole criteria.

If challenged, it’s likely that Employee X would argue that MNC did not suffer any losses anyway, and in fact benefited from the arrangement since Renovator ABC was the cheapest priced. Does this make the entire situation acceptable from an employment law standpoint?

Friday, 10 May 2019

Is your disability impacting your work?

by Watkins Tapsell 

This article was first published on Mondaq on 6 April 2019.

The Australian Bureau of Statistics indicates that in 2012, 8.8% of the total Australian workforce population had a disability and were in paid employment.
Disability in the workplace is common, but what happens when you are told you can't perform your job because of your disability?
In Australia, discrimination in the workplace is regulated at both a state and national level.

What is a disability?
The law defines disability as:
  • • total or partial loss of the person's bodily or mental functions; or
  • • total or partial loss of a part of the body; or
  • • the presence in the body of organisms causing or capable of causing disease or illness; or
  • • the malfunction, malformation or disfigurement of a part of the person's body; or
  • • a disorder or malfunction that results in the person learning differently from a person without the disorder or malfunction; or
  • • a disorder, illness or disease that affects a person's thought processes, perception of reality, emotions or judgment or that results in disturbed behaviour;
  • • and includes a disability that:
    • ○ presently exists; or
    • ○ previously existed but no longer exists; or
    • ○ may exist in the future (including because of a genetic predisposition to that disability); or
    • ○ is imputed to a person.

Monday, 29 April 2019

India needs to rethink attitude towards corporate tax avoidance

by Shilpa Goel (Editor) (Tax Lawyer)

This article was first published on the Kluwer International Tax Blog on 8 April 2019.

According to an oft-cited research by the UN University World Institute for Development Economics Research, India loses over 40 billion US dollars in revenue, annually, to corporate tax avoidance. Obviously, for a country like India, the money could have been used to reduce poverty-related deaths and to provide basic social care to the poor and underprivileged. Despite its impact, corporate tax avoidance is one of the lesser debated issues in India.

Multinational tax avoidance has almost never made it to the front pages of popular Indian newspapers and has never been discussed on primetime TV news debates. That corporate tax avoidance is not ‘popular’ with the Indian voters today is also indicated by the fact that not a single question relating to “tax avoidance” or “corporate tax avoidance” was raised in the Sixteenth Lower House of Parliament (2014-2019).

This is not to suggest that nothing has been done so far. I have blogged about some of the changes recently carried out to the Income Tax Act to mirror the OECD’s BEPS recommendations. Also, in 2017, the government introduced a legislative general anti-avoidance rule (GAAR) to disregard aggressive tax planning arrangements and deny tax treaty benefits. Of course, the GAAR came too late in the day and came only after the Supreme Court, in the case of Vodafone, rather bluntly noted that tax benefits cannot be denied in the absence of any explicit anti-abuse rule in the tax law.

These changes, though necessary, are not sufficient to win India’s fight against corporate tax avoidance. A lot needs to change, both at domestic and international levels.

Monday, 22 April 2019

Reforms relating to tax compliance and tax incentives


There are two aspects to consider in improving the Malaysian tax system – tax compliance and tax incentives.

Tax compliance

Tax compliance needs to be made a way of life. However, media advertisements can only do so much to educate. There should be a focus on the educational role so as to be able to disseminate tax information. The website could be used more effectively, for example, listing all tax case law decisions, etc. as the public needs to know it all in the self-assessment world. The need for information also extends to officers of tax authorities, where they should be trained via contributions from the private sector to develop staff with a broader mind-set and enhanced business knowledge.

Tax compliance is a multi-faceted issue, hence there are many facets to consider. Examples include improvement of the tax consultation process, utilisation of technology in holistic manner, improvement of the tax authorities’ technical capabilities.

Tax incentives

The roll-back of certain tax incentives that commenced in 2012 has stalled. It is important to carry out a review and decide which tax incentives are important and cease pandering to vested interests. The tax incentives legislation needs to be revamped to remove certain incentives while simplifying others.

The development of tax incentives in Malaysia has not really gone through a focused review. Instead, an approach of “add-ons and tinkering” was adopted rather than taking a step back and reviewing the rationale for the need for tax incentives and having a clear measurement tool to evaluate the effectiveness of tax incentives.

The Tax Reform Committee set up in September 2018 aims to address some of the issues mentioned above. It is not undertaking a public review of the tax system which will require a significant amount of time and resources. Rather, it acts as an advisory committee to the MoF by engaging with various stakeholders for suggestions on improvements, and provide recommendations to the MoF.

Dr Veerinderjeet Singh, Chairman of Axcelasia Taxand Sdn Bhd discusses examples of tax reforms to better the Malaysian tax system.



Friday, 12 April 2019

The accounting profession: On the cusp of a technological revolution


Accounting professionals need lifelong learning to keep pace with evolving business needs. Data and analytics will be the critical skills for practitioners to stay ahead of the curve.

RICHARD CROWLEY AND JIWEI WANG

This article was first published in The Business Times, 11 April 2019. Reproduced with permission from the authors.

ACCOUNTING is experiencing more disruption than ever before. Manual or repetitive tasks will be replaced by automation, robotics and machine learning in the near future. However, this does not mean that the accounting profession is a sunset industry. In fact, with the rise of the technological applications in the workplace, there is an increase in demand for talent who are adept at bridging data technology and the accounting function.



Tuesday, 19 March 2019

Sugar tax in Malaysia: Sweet idea or bitter pill?




by Dave Ananth

Dave Ananth, Senior Tax Counsel with Stace Hammond Lawyers, is based in Auckland, New Zealand. He is a senior lawyer, a former Magistrate and advocate in Malaysia before taking up a position with the Inland Revenue Department in New Zealand as a Prosecutor. He is an expert in taxation and tax policy. He also writes extensively on direct and indirect tax issues in Malaysia and New Zealand. He is a consultant for Wolters Kluwer Malaysia. He can be reached at davea@shg.co.nz.



The usage of tax to change “unhealthy behaviour” is not uncommon. Examples include “sin taxes” on cigarettes and alcohol, tax on high fat food (Denmark) and a “metabo” law (Japan) which was introduced to overcome obesity through annual measurement of waist circumference, provision of weight loss classes and the imposition of fines[1].

Malaysia’s sweet tooth

In August 2018, Damanasara MP Tony Pua floated the idea of a “soda tax” to kill two birds with one stone – to increase government revenue and encourage healthy living. A few weeks later, Prime Minister Dr Mahathir Mohamad says the government is considering implementing a soda tax to encourage healthy living and reduce sugar consumption as the diabetes rate in Malaysia is very high.

It cannot be denied that Malaysians are eating and drinking too much sugar. Not just from soft drinks, but from other sweetened drinks (teh tarik), local kuih (cakes) and biscuits. Per the chart below, the estimated daily consumption of sugar is the highest among Malaysians[2] in Southeast Asia (SEA).

It was reported that in 2017, about 16.74% of adults in Malaysia have diabetes. While it is not the highest in the world (Malaysia ranks 12), Malaysia still has the highest number of diabetes sufferers in SEA[3]. It is also worth noting that Malaysia has the highest levels of obesity sufferers in SEA, at 15.6%. Again, while Malaysia is not the highest in the world[4], it is still a cause for concern. Total (direct and indirect) costs of obesity are highest in Malaysia, amid SEA, where it is estimated to be between 10% and 19% of national healthcare spending[5].