Pre-CNY Tax Wrap-up – Singapore & Malaysia

A summary of tax events since the hangover of the New Year

Yes, I’m not married yet. No plans yet.                          
No, we don’t have plans for a third child. Two girls are just fine.
Yes, I have put on weight. Work has been really stressful lately.

Does that sound familiar? Festival seasons may be all about the laughter, food, fireworks and togetherness but it also means chit-chat with distant relatives or even worse, being hounded by nosy relatives.

So, as we peel Mandarin oranges and pack our bags in anticipation of the Chinese New Year holidays, here’s a list of potential talking points (if you run out of inconsequential topics or desperately need to change the theme to anything but the state of your personal life):

1. The Finance Act 2015 has been gazetted on 30 December 2015. The Act amends the Income Tax Act 1967, the Petroleum (Income Tax) Act 1967, the Real Property Gains Tax Act 1976, the Labuan Business Activity Tax Act 1990, the Goods and Services Tax Act 2014 and the Promotion of Investments Act 1986.
   Find out more about the changes in the relevant Acts through CCH’s Malaysian Revenue Legislation.
   
   
2. On 28 January 2016, Prime Minister Datuk Seri Najib Razak announced a revised budget to take into account the weakening oil prices and to safeguard the economy and the well-being of the citizens. Measures include:
• Employees’ contribution to the Employees Provident Fund will be reduced by 3% beginning March 2016 to December 2017. However, the contribution by employers will remain.
• Individual taxpayers with a monthly income of RM8,000 or below will be granted a special tax relief of RM2,000 for YA 2015.
• Improving the efficiency and amount of tax collection by increasing its compliance and auditing efforts on tax evaders as well as a provision of special consideration to relax the penalty on taxpayers to encourage them to come forward and declare their past years’ income, provided the unpaid taxes are settled by 31 December 2016.
  
  
3. Singapore is gearing up for their 2016 Budget which is on 24 March 2016. The Ministry of Finance (MOF) is calling for public feedback, in preparation of the said Budget.
   Want the Government to hear your thoughts? Find out how through CCH's Singapore Tax Tracker, where we bring the latest tax news in Singapore to you.
   
   
4. The tax filing season is almost upon us. The tax filing programme for YA 2015 (Malaysia) and Notice of submission of YA 2016 tax returns (Singapore) have been released.
   
   
5. The Inland Revenue Board (IRB) lost appeal on a reinvestment allowance (RA) claim against Marigold Industries (M) Sdn Bhd (Marigold). Following a decision by the Special Commissioners of Income Tax (SCIT) that ruled in favour of Marigold, the IRB submitted an appeal, questioning whether Marigold is entitled to claim RA under Sch 7A of the Income Tax Act 1967 (ITA 1967), in respect of expenses for the Systems, Applications and Products in Data Processing Transaction System (SAP System) amounting to RM1,375,930 for YA 2006.
   The High Court found that based on the findings of fact by the SCIT, the capital expenditure incurred by Marigold for the SAP system had satisfied the necessary requirements under Sch 7A of the ITA 1967 and therefore, found the SCIT’s Decision is correct in law and dismissed the appeal with costs.
   To read the full case law, subscribe to CCH’s Malaysia and Singapore Tax Cases Online, where we provide you with the latest tax cases rulings and judgments in Malaysia and Singapore.
   
   
6. The Singaporean Parliament has introduced bills to amend the Income Tax Act and Goods and Services Tax (GST) Act. The GST amendment bill aims to improve to improve the administration and clarity of the legislation. The Income Tax amendment bill aims to internationalise businesses and make the personal income tax rate structure more progressive.
   
   
7. Both Singapore and Malaysia have taken steps committing to exchanging necessary financial and tax information.
   Singapore recently ratified the Convention on Mutual Administrative Assistance in Tax Matters which will take effect from 1 May 2016. Pursuant to that, the Income Tax (Exchange of Information Arrangement) Order 2016 was gazetted on 25 January 2016, being the supporting legislative framework for the said Convention. Malaysia, on the other hand, recently signed the Multilateral Competent Authority Agreement on automatic exchange of financial account information to commit to commence exchanges in 2018.
   
   
8. Veerinder on Taxation 4th Edition is now available. Too heavy for bedtime reading, but this comprehensive reference book covers the technical provisions, tax authorities' practices and guidelines, as well as administrative aspects. This book attempts to bring all the relevant information to you so you don't have to go looking for it.
   Read more about it here!

Fortified with this list and drinks, have a happy Chinese New Year, folks!