Friday, 27 September 2019

Recent Updates On Service Tax


This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their SST e-Alert in September 2019. Reproduced with permission from LHAG.


 Three subsidiary legislation related to service tax came into effect on 1.9.2019 which are:-

a) Service Tax (Amendment) Regulations 2019.
b) Service Tax (Imposition of Tax for Taxable Service in respect of Designated    areas and Special Cases) (Amendment) Order 2019.
c) Service Tax (Compounding of offences) (Amendment) Regulation 2019.

The above regulations and order is aim to provide further explanation to the current law by pointing out some of the existing legal gaps.

Friday, 2 August 2019

Understand your company's values to ensure that its culture thrives


Authors: Aaron Goonrey and Jenni Mandel (Lander & Rogers)
This article was originally published in Lexology.

Introduction
Employees will not come forward and report troubling behaviour if they fear retaliation. This update outlines how employers can establish and maintain their organisation's values.
We all aspire to work in an environment where we feel valued, free to express our views and confident that we are all on the same page when it comes to ethical business practices and integrity.


Unfortunately, as the misconduct scandals and high-profile resignations brought about by the Banking Royal Commission have shown, the reality is that many organisations suffer lapses in ethics and compliance. This is common for businesses driven solely by profits – where it is easy for the pursuit of financial gain to trump all other considerations.
A culture of complicity can damage an organisation's reputation and financial standing. Having a company vision, which underpins a business's culture, is key.
This update explores the importance of values, which can help to foster a workplace environment in which employees feel empowered to report misconduct and undesirable behaviour.
Why are values important?

Tuesday, 23 July 2019

Case Spotlight: Tariff Classification for Sales Tax


This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their Trade & Customs e-Alert in July 2019. Reproduced with permission from LHAG.


 The reintroduction of sales tax highlights the need to be precise in the tariff classification of goods manufactured in or imported into Malaysia. Under the goods and services tax (GST) regime, a standard rate of 6% duty was imposed on all taxable goods (except for exempt and zero-rated supplies). However, under the sales tax regime, goods can be either exempted (0%) from sales tax or be subject to sales tax of 5%, 10% or 15%. This sales tax rate differentiation is entirely based on tariff classification. Tariff classification thus becomes a key aspect in determining the sales tax rate payable. 

The Australian High Court recently granted special leave to the appeal sought by Comptroller General of Customs (Australian Customs) against the Federal Court’s decision in ComptrollerGeneral of Customs v Pharm-A-Care Laboratories [2018] FCAFC 237. This case concerns the tariff classification of vitamin gummies (Vitamin Gummies) and weight loss gummies (Weight Loss Gummies) imported by the taxpayer.


Thursday, 11 July 2019

Case Spotlight: Arbitrary Transfer Pricing Assessments Successfully Set Aside


This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their Transfer Pricing e-Alert in July 2019. Reproduced with permission from LHAG.


OSB v Ketua Pengarah Hasil Dalam Negeri

In a landmark ruling, the Special Commissioners of Income Tax (SCIT) unanimously allowed a tax appeal against transfer pricing tax assessments raised by the Director General of Inland Revenue (DGIR). The assessments were raised consequent to a transfer pricing audit. Our Tax, SST & Customs lawyers, led by senior partner Datuk D P Naban together with partner S Saravana Kumar, and senior associate Jason Tan Jia Xin, successfully represented OSB.


Tuesday, 25 June 2019

Case Spotlight: Transfer Pricing - DGIR’s Power To Vary Transactions



This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their Transfer Pricing e-Alert in June 2019. Reproduced with permission from LHAG.


 In the recent Indian case of Pr Commissioner of Income Tax vs M/S Aegis Ltd (Case No 1248 of 2016), one of the issues was whether the Indian Revenue Service (IRS) can re-characterise a share subscription transaction as an advance of unsecured loans. The High Court held that the IRS is not entitled to do so and dismissed its appeal against the decision of the Income Tax Appellate Tribunal (Tribunal).

Brief Facts
The taxpayer, a company based in India, was subjected to a transfer pricing audit for the years of assessment 2009 and 2010. It was dissatisfied with the decision of the IRS to deem interest income and raise tax assessments.

During the said years of assessment, the taxpayer had subscribed to redeemable preferential shares of its associated enterprise and redeemed some of the shares at par on a later date. The IRS took the position that the preference shares were equivalent to an interest-free loan advanced by the taxpayer and accordingly, imputed deemed interest.

Two key issues that arose were whether:

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?

Recent Updates On Service Tax

This article is written by Lee Hishamuddin and Gledhill (LHAG) and was first published in their SST e-Alert in September 2019. Reproduced...