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EXTENSION OF SEPTEMBER – DECEMBER 2020 CONTRIBUTION PAYMENT DATE

The Employees Provident Fund (EPF) is extending the date for employers to remit their mandatory contribution for the months of September 2020 until December 2020, from the 15th to the 30th of each month respectively.

Source from: KWSP website
https://www.kwsp.gov.my/-/extension-of-september-december-2020-contribution-payment-date

Save this link for statutory updates for your reference.
https://mywave.biz/index.php/resources/sharing/39-statutory-malaysia-2

#sharingiscaring #EPF #KWSP

Semakan BPN 2.0 & Kadar Bantuan Prihatian Nasional Baru

Today the government announced additional funds under the Bantuan Prihatian Nasional or BPN 2.0. Now the BPN 2.0 can be made checked on the official portal of bpn.hasil.gov.my. This additional assistance will be channelled directly to previously eligible BPN recipients. The new application can be made starting October 14 2020, for those who are not eligible and want to apply.

Please refer to the official payment schedule below :

The cash can be claimed only after the serial number exists on the BPN 2.0 at https://bpn.hasil.gov.my/

For those who do not have a bank account or CREDIT FAIL status, you need to make a cash claim at the nearest BSN branch. And for rural recipients in Sabah and Sarawak, payment will be made in cash starting January 2021. The cash can be claimed after the serial number exists on the BPN 2.0 at https://bpn.hasil.gov.my/

The BPN 2.0 status can be checked on October 15. If you forget your password, you are asked to contact the LHDNM Revenue Care Line (HCL) at 03- 89111000 (for account reset action and security questions) or call the nearest LHDNM Branch / PKH / UTC.

Apart from BPN 2.0, the government also announced the extension of the Program Subsidi Upah and Geran Khas Prihatin to ease the burden of employees and employers that are affected by COVID-19.

 

Annual Statutory Compliance Documents for SSM Malaysia

When you start your own business, there are a lot of things that you need to make sure you have covered. Sometimes, one or two important things are missed out because you’re super busy getting everything working.

These things will include your business strategies, marketing plans, cash flows and budget projections. However, there are a few things that you might forget and that is your annual statutory compliance documents for SSM. Some of these documents are compulsory and it might not be your top priority at the moment but you will need to adhere to the rules as they are bound by legislation. Failure to comply will result in fines.

As a private limited company or more commonly known as a Sdn Bhd company, you are required by law to send in multiple documents to SSM at the end of your financial year.

So what are these documents?

Document 1 : Annual Returns

Every private limited company must submit their annual returns for each financial year to the SSM no later than 30 days from the yearly anniversary of the incorporation date. In this annual return document, you need to basically notify SSM of your yearly returns and also inform them if there has been any material changes. Usually a corporate secretary will be there to aid in submission of these documents.

Failure to comply will render you punishable by the law with a fine not exceeding RM 5000, and a further fine of not exceeding RM 1000 for each day when the offence continues.

Document 2 : Director’s Report

Your directors’ report will need to be prepared by the director’s in your company at the end of the financial year. You would also need to attach your financial statements.

The directors’ report includes :

  1. Names and details of all current and past directors of the company.
  2. The principal activities carried out by the company.
  3. The net amount of profit and loss, basically this is your profit and loss sheet.
  4. Shares or debentures
  5. Any other information that might be required under the Companies Act 2016.

If there is a failure on your part to prepare the directors’ report, you will be punishable with a fine not exceeding RM 500,000 or imprisonment for a term not exceeding 1 year or both. Failure to comply with this requirement also renders it an offence by the company and is punishable with a fine not exceeding RM 20,000.

Document 3 : Financial Statement (Audited)

You will need to hire an actual certified auditor to come in and prepare these documents for you. They will need to have a look at your management accounts and your bookkeeping records for that financial year.

You need to ensure that you keep a very close eye on all the receipts and transactions because they will be used to balance out your financial statements. An error there will cause your numbers to be unbalanced and may subject you to an inquiry by the government.

Your failure to comply with this requirement is an offence that is punishable with a fine not exceeding RM 5000 or an imprisonment for a term not exceeding one year or both.

These offences are really serious and we want to make sure that you never get caught in a situation like that ever. SSM has released a new tool called MBRS – which helps companies submit their annual reports online. MBRS will be mandatory for all companies to use when it comes to submitting these documents in the next year.

 

PRIHATIN Moratorium Programme – Tax Treatment for Interest

The Income Tax, also regarded as Special Treatment for Interest on Loan 2020, was gazetted on 25 Aug 2020. These special regulations will be in effect from year of assessment 2020 onwards.

The special treatment of interest is gazetted under the PRIHATIN Moratorium Programme to support various causes. It is basically to protect people, support businesses, and benefit small contractors with the needed economic stimulus.

The right to exercise regulations under the tax treatment is to be given to different authorities, which include the following:

  • Licensed investment banks and licensed banks that are under the Financial Service Act 2013
  • Licensed Islamic banks that are under the Islamic Financial Service Act 2013
  • Every prescribed development financial institution that is under the Development Financial Institutions Act 2002 (a ‘financial institution’)

They all are authorized for the tax treatment of the interest due and payable in respect of loans. The loans should be related to the moratorium program under the PRIHATIN Economic Stimulus Package (PRIHATIN).

Regulation 4(1) of the Regulations under the PRIHATIN Moratorium Programme provides that where a financial institution approves the moratorium in respect of interest due and payable from 1 April 2020 until 30 September 2020, the interest shall not constitute the gross income of that financial institution in the basis period for that year of assessment. If the moratorium from a borrower is under a loan granted by the financial institution in the base year of assessment, the interest is not calculated in the gross income of the financial institution.

However, where interest concerning regulation 4(1) is received from 1 April 2020 until 30 September 2020 or becomes receivable on or after 1 October 2020 shall be treated as total income in the basis period for an assessment year.

Here are the following conditions that apply to a loan and moratorium under these Regulations:

  • The loan has to be in Ringgit.
  • There should be no outstanding payment on the loan by the borrower for more than 90 days as of 1 April 2020.
  • The borrower company which could be other than small and medium enterprises must have applied for the moratorium in the relevant financial institution.
  • According to the Income Tax Act 1967, no deduction from the gross income of a financial institution is allowed based on any impairment of a loan involved in the period of the moratorium program referred to in regulation 4(1).
  • The financial institution has to maintain a separate account for the amount of interest treated under the PRIHATIN Moratorium Scheme and payment received concerning the interest referred to in regulation 4(1) of the scheme.

Do Away With Starting a New Business and Simply Buy Over Existing Ones

Advantages of Buying Over

You get to acquire existing goodwill such as customer base, marketing leverage, employees and infrastructures. Costs for operating an existing business is also much lower than a new one. Plus, a current company could also have patents, trademarks or copyrights, which are valuable to business expansion.

 

Checklist for Buying Over

Once you decide to buy over an existing business, you have to start with a due diligence checklist. An example could look something like this:

  1. Business Reputation: You can find out more about the business reputation by talking to its competitors. You could also weed out potential problems if any of them mentions it.
  2. Financial Disclosure: You may need to hire a lawyer and an accountant for this process. With a complete financial document, you get to understand the company cash flow and make a better evaluation.
  3. Assets and liabilities: Most companies would have tangible and intangible assets as well as obligations. It is essential to understand what you are about to face when you take over. For instance, intangible assets are intellectual property that the company owns. The target company could also have innovations not yet patented.
  4. Essential contracts: The target company could have sustained due to multiple reasons. One of them is having useful agreements with suppliers, vendors, landlord, and key employees.
  5. Licensing and permits: If the target company operates within an industry, surely it has to comply with industry regulations. Hence, the company should have proper permissions and licensing to operate.
READ ALSO:  What You Need to Know About Registering a Sdn Bhd Company in Malaysia

 

Process of Buying Over

Now that you are more determined to buy over that business, follow the process to get things going.

Step 1: Negotiate

Start negotiating with the seller or business owner. Negotiations go beyond the price, and it should comprise of whether the takeover is an asset takeover or equity acquisition. As a buyer, you should also take note of employee condition and any particular condition that must occur before the complete sale. Asset acquisition is buying over selected company assets to ensure continuous operation. Equity acquisition is buying over the significant shareholding in the company. During this stage, you, through your lawyer, can prepare the “Letter of Intent” stating all material aspects agreed upon. This is only as a basis before drafting an agreement. In the letter, you should also include a statement that negotiations are exclusive to both parties. This means that either party cannot go into negotiations with others simultaneously.

Step 2: Drafting the Agreement

Your lawyer should now draft the sales and purchase agreement (SPA) detailing all issues. Most of the time, more negotiations follow throughout this process. As a buyer, this is where you require warranties for all matters. For instance, the seller should assure that all financial records are complete and accurate. Other matters may warrant for work in progress, vendor contracts and current employees.

Step 3: Notify SSM

When you have completed the business sale, you would have to notify the SSM in Malaysia. This process must complete within 14 days to inform them of any changes to the business’ name, the appointment of office director, change of shareholding and registered address if any.

How Digital Tax affects Malaysians

The scope of digital tax is broad as it covers almost all online services provided digitally such as online software licensing, video and music streaming, digital advertising, video games, mobile applications, etc. Any service that is delivered or subscribed over the internet or electronic network would fall within the scope of digital tax.

Consumers who acquire or subscribe to these services would find themselves having to bear an additional 6% service tax imposed by their suppliers who are required to register with the Royal Malaysian Customs Department. However, not all suppliers are required to register. Those with annual sales of RM 500,000 or more would have to, but suppliers with fewer sales would not have to register. The question is whether the latter suppliers would cash in by raising their prices.

A common misconception by the general public is such that digital tax would be imposed on the purchase of tangible goods via online platforms such as online purchases. This is not true as the purchase of tangible goods or products (ie non-digital products) would fall outside the ambit of digital tax notwithstanding that the purchases are transacted online.

For example, the purchase of a computer via online platforms would not be subject to digital tax on the premise that the computer is not a digital product/service. However, this does not mean that the purchases made online on tangible goods are tax-free as most goods would be subject to sales tax, including imported goods.

By and large, the average Malaysian household should not be significantly impacted given that the adoption rate of e-commerce among Malaysians is only 51.2% – based on the survey conducted by Malaysian Communications and Multimedia Commission in 2018. Moreover, a typical consumer tends to spend more on tangible goods rather than on digital services.

The impact on the tax on someone who subscribes to all the above services would be RM61.12 a year. This might not seem large by itself, but as a tax, it becomes a burden.

Almost all online services would be subject to digital tax but in an effort to reduce the burden of the Rakyat and to cultivate learning, the authorities have granted exemption on online education services such as distance learning conducted by qualified institutions. An exemption has also been granted on e-newspapers, online journal and periodicals.

To sum up, Malaysia joined the bandwagon to be one of the early adopters of digital tax alongside with, among others, countries such as Australia, Japan, South Korea, New Zealand and Singapore, with the objectives of creating a level playing field, as well as to increase revenue from the untapped digital economy. It is reported that the global digital economy is currently worth a whopping US$3 trillion. This is another avenue for the Government to raise revenue. Whilst this may not be significant now, it could increase as we find that digitization would grow exponentially over time.

How to Register Sdn Bhd Company in Malaysia?

What is Sdn Bhd Company?

Sdn Bhd, is an abbreviation of a Malaysian term Sendirian Berhad, which means a Private Limited company. This type of company is quite popular among businessmen in Malaysia.

According to the Companies Act 2016, Sdn Bhd Company can only be registered unless it has appointed 1 director and 1 shareholder. Meaning thereby, you can easily register a Sdn Bhd company in Malaysia without engaging a business partner.

Below are the noteworthy features of Sdn Bhd Company.

  • This type of company is limited by share. Meaning thereby, if an Sdn Bhd company declares a total loss, the shareholders and company secretary of such a company won’t be liable to the company shares.
  • Sdn Bhd Company holds the right to conduct its perpetual succession until shareholders, directors, or company secretary dissolves the company.
  • All such companies can sue any other individual or company. Similarly, any other individual or company can also sue an Sdn Bhd company.
  • Sdn Bhd Company is free to enter into contracts with other companies and perform legitimate business activities.

What is the Difference between Berhad and Sdn Bhd?

If you don’t have any idea as to what are the major differences between a Berhad (Bhd) and a Sendirian Berhad (Sdn Bhd) company, just take a look at the information provided below.

To start with, let’s discuss the names of these companies and their meaning. The term Sendirian Berhad (Sdn Bhd) means a Private Limited Company.

On the contrary, a Berhad (Bhd) company is a Public Company. Normally, public companies are listed on a stock exchange, rendering them as the public listed companies.

Given below are the most prominent differences between Sdn Bhd and Bhd companies.

1. Availability of the shares to the public

A public company (bhd) allows the public to own its shares without any prior permission. On the other hand, people can only own the shares of a private limited company (Sdn Bhd) after the approval or agreement of its existing shareholders.

2. Number of shareholders

A public company (bhd) is permitted to have an unlimited number of shareholders. Whereas, a private limited company (sdn bhd) cannot have more than 50 shareholders.

3. Publication of financial information

The financial information of a public company (Bhd) is accessible to the public. Moreover, public listed companies are also bound to hold quarterly earnings calls.

Such a company needs to answer the queries of its public shareholders. On the contrary, a private limited company (Sdn Bhd) isn’t required to the public its financial information.

4. Standards for financial reporting

The most notable difference between a private limited company (Sdn Bhd) and a Public company (Bhd) is related to their financial reporting standards.  Public companies have to follow a higher financial reporting standard as compared to the private limited company.

How to Register a Sdn Bhd Company in Malaysia

Here is a step-by-step instruction about registering an Sdn Bhd company in Malaysia.

Step-1: Go to the online portal of MyCoID and register an account.

Step-2: After activating the account, you will receive an email, which provides essential information for validating the account at the nearest SSM counter.

Step-3: Once SSM validates your account, the next step is to login to the MyCoID portal and start the process of registering your Sdn Bhd company.

Step-4: Next, go to the Direct Incorporation Application to perform the Name Search procedure. To initiate this procedure, you need to provide the three proposed names for the company.

If another company has already taken the proposed name, it won’t be possible to proceed further with the registration process.

Step-5: After that, a Super Form will open on your computer screen. This form allows you to clarify the meaning of the proposed company name.

It is mandatory to fill this form if the proposed name contains the controlled words, names of states, or trademark. In this case, you are also bound to provide an authorization letter from the relevant authority or owner.

Step-6: Now it’s time to choose a business code. This is a code that provides both the business address and registered address of your company.

Step-7: Till this stage, the system will list you as a shareholder or director of the company. However, if you want to add these details manually, you can do it in the next step.

Step-8: Apply after carefully reviewing the information provided by you. From here, you will be directed to the ‘Transaction page’.

Step-9: For completing the registration procedure, you have to pay RM1,000 as a registration. Don’t forget to collect the transaction receipt.

Step-10: Once done, the ‘Notice of Registration’ will be sent to you via email. It would serve as proof of registration. In addition, you can also obtain a Company Certificate by paying the required fee at the SSM counter.

Note: After registering a company with SSM, you are bound to appoint a company secretary within 30 days. You can do it through MyCoID portal. Although it isn’t binding or mandatory to lodge a constitution of your Sdn Bhd company, you can do it via MyCoID portal if you want to.

What are the Requirements to Register a Sdn Bhd Company in Malaysia?

The most essential aspects to consider when registering an Sdn Bhd company in Malaysia are mentioned below:

  • Name of the Company
  • What type of business activities it would perform
  • Must have a registered office in Malaysia
  • The company should have one director and one shareholder.
  • Need to hire a corporate secretary, who is either licensed by SSM or a member of a prescribed professional body.
  • The lowest amount of paid-up capital is RM2
  • You have to provide a copy of every essential document. For instance, copies of identification cards or passport of the director and shareholder must be attached to the file.

Eligibility Requirement for a Sdn Bhd Company

In order to run the company, it requires the appointment of at least 1 shareholder and 1 director who lives in Malaysia. Both the director and shareholder could be the same person.

  • The age of both the shareholder and the director should not be less than 18 years old.
  • Moreover, the person has not been convicted within the last five years.
  • Bankrupt or a person not the resident of Malaysia isn’t eligible for such designations.

How long does it take to Register Sdn Bhd Company?

Generally, it takes 1 to 2 weeks for getting your Sdn Bhd Company registered. Below is the estimated time that each process might take for its completion.

  • It takes 1 working day for competing for account registration & activation, as well as the “Company Name Search” procedure.
  • You require 2-3 days for preparing the registration documents
  • The signing of all the relevant documents by shareholders and directors can take 1 working day
  •  You need 3-5 days for submission of documents to SSM
  •  Obtaining the Digital incorporation certificate by SSM takes only 1 day

The time mentioned above is an estimated one, which means you may have to face delays if the SSM requires some kind of additional information. For instance, SSM might require additional time to verify the registration documents.

It is binding on the owner of a prospective company to carefully provide the information. This is so, as even the slightest mistake could result in an unexpected delay.

How much it takes to Register Sdn Bhd Company?

Here are the two major expenses of registering a Sdn Bhd company in Malaysia.

  • The cost of registering Sdn Bhd RM1499
  • The company secretary fee is RM200 per month

Company Secretarial Services

With a view to registering a Sdn Bhd company in Malaysia, you need to appoint a company secretary. A company secretary is responsible for performing a variety of essential tasks.

For instance, a secretary needs to:

  • Deal with regulations
  • Create company policies
  • Handle the aspect related to the following industrial standards
  • Follow up of the company’s guidelines and code of ethics
  • Take into account any other regulations mentioned in the Malaysia Companies Act 2016

This is all about register a Sdn Bhd company in Malaysia. We hope you enjoyed the read. If you need

How COVID-19 May Permanently Affect HR

More Employees Working Remotely

The beginning of COVID-19 brought about more organizations than any time in recent memory offering far off work as well as requiring it. While a few organizations accomplished offer distant work as an advantage, many didn’t, wanting to keep representatives in the workplace. Notwithstanding, presently that any organization that can has executed the innovation and framework to deal with representatives working distantly, more individuals will keep on working distantly even after the pandemic is finished.

This is uplifting news for some workers. There are numerous who can profit by working distantly, including the individuals who have an incapacity, the individuals who need adaptable planning, those with long drive times, and that’s just the beginning. It’s additionally uplifting news for organizations. The more staff can work distantly, the lower the workplace overhead expenses might be.

I’m not catching This’ meaning for HR?

While for some HR experts, overseeing telecommuters is the same old thing, a few organizations should actualize new guidelines and cycles. It’s imperative to create rules for far off work as quickly as time permits. Formal cycles for taking care of distant work will help guarantee that the organization keeps on running easily while the pandemic is as yet going on.

These guidelines for far off work will have been tried and balanced as vital during the pandemic. Once the Covid pandemic is finished, they can stay set up for any individual who keeps on telecommuting.

Difficulties Keeping Employees Engaged

The COVID-19 pandemic is trying a ton of organizations’ capacity to react to crises. Organizations that didn’t already have any framework set up for distant work needed to execute the innovation in a rush. In a pandemic that undermines the lives and soundness of representatives just as their occupations, it’s significant for organizations to show that they care about their workers.

Workers are more connected with when they feel that their organization thinks about their prosperity. On the off chance that an organization’s reaction to the pandemic caused workers to feel disposable or that they didn’t make a difference to the organization, they’ll feel less connected with and, accordingly, be less gainful. The pandemic is a troublesome time for everybody and a few organizations were needed to make staffing cuts due to lost income.

It might be troublesome, yet it’s critical to show your workers that the organization cares. Keeping up a notoriety for thinking about your staff will help keep current representatives connected with, yet in addition help for future enrolling and for maintenance.

Enlisting Will Also Be Remote

As opposed to directing face to face meets, the whole enrollment cycle will probably keep on being far off. Occupation looking and applying are now done on the web. Advanced innovation empowers video conferencing for interviews from anyplace. With far off work conjecture to proceed after the finish of the pandemic, it benefits organizations to keep selecting distantly too.

Particularly if the position you’re hoping to fill should be possible distantly, far off meetings will permit organizations to enlist from anyplace instead of just locally.

Re-Thinking Sales Strategies to Boost Client Base

  1. Find Your Niche

Before you start creating your advertising pipes and building deals methodologies, it’s essential that you distinguish who your optimal client is and what you’re generally enthusiastic about. By distinguishing the business wherein your optimal customer is working, you’re ready to straightforwardly focus on that particular customer, yet additionally learn more data about their field. The more information you get, the more prominent your odds of pulling in more organizations inside a similar industry as you leverage your expertise and understanding to convey important administrations.

  1. Educate Your Target Client

As your insight into your objective customer and their industry develops, progress in the direction of situating yourself as an idea chief. You can accomplish this by displaying your bits of knowledge with educational and informative substance.

While this may appear to be a brisk method to lose expected customers, given the supposition that on the off chance that you give somebody the data they have to achieve an assignment themselves they will do as such, this isn’t the situation. In all actuality, your intended interest group as of now approaches the data you’re giving them. What they’re hoping to is somebody who has a demonstrated history of taking this data and utilizing it to effectively actualize arrangements.

  1. Be Transparent

Straightforwardness is a key segment to both drawing in and holding customers. At our firm, the business meeting we have with a potential customer is regularly an exploratory call where we become acquainted with additional about the customer’s business, their requirements, and why they came to us.

We have likewise settled a cycle that permits us to recognize administrations we accept the customer would most profit by, just as their expense, continuously. The customer is vigorously engaged with deciding their custom cost dependent on the administrations they select. Like purchasing a vehicle, they can choose the base alternative, on that is completely stacked or something in the middle. It’s a similar vehicle, it simply has various alternatives.

The customer picks the alternative that best meets their requirements. This degree of straightforwardness precisely speaks to our qualities and promptly sets up a specific measure of trust among us and the possible customer, which ordinarily prompts us bringing the deal to a close.

  1. Keep Your Process Simple

The business instrument we’ve made at our firm is sufficiently basic to where different colleagues effectively pitch administrations and articulate their separate expenses to clients and think of a similar dollar sum. This instrument is especially valuable since it permits us the adaptability to certainly remember important staff individuals for deals calls regardless of whether they don’t have broad deals understanding.

The effortlessness is additionally significant in light of the fact that the individual we’re talking with commonly doesn’t have a clue about the responses to itemized addresses, for example, what number Quick-books exchanges do you have in a month?

The kinds of inquiries we pose are ones that a proprietor would realize directly all things being equal or can make a sensible speculation. Keeping up this degree of access and adaptability has been one more factor that has helped us land new customers and urged current customers to build the quantity of administrations we’re giving them.

Making an effective deals technique comes down to making sense of what addresses your objective customer and how to best speak to your organization. From that point, utilizing the tips here can make you another stride nearer to making sure about more qualified leads and expanding customer maintenance.

6 important company taxes in Malaysia

  1. Corporate tax

Corporate tax is governed under the Income Tax Act 1967, which applies to all companies registered in Malaysia for chargeable income derived from Malaysia including business profits, dividends, interests, rents, royalties, premiums and other income. Income obtained from other countries are exempted from corporate tax except for businesses related to banking, insurance, and sea and air transport. Similar to personal income tax, there are tax exemptions available such as tax incentive and foreign tax credit.

Tax rates of corporate tax (as of Year of Assessment 2020)

Paid-up capital of RM2.5 million or lessRate
On the first RM 600,000 chargeable income17%
On subsequent chargeable income24%
Paid-up capital of more than RM2.5 millionRate
Flat rate24%

When to pay corporate tax?

Newly registered companies should file the estimation of tax payable within 3 months of operation and make monthly instalments starting from the 6th month of the assessment year by the 15th of each month. If this estimated tax submission falls within the Movement Control Order period, an extension of time is given until 31st May 2020. After the assessment year has ended, a company is required to file its tax to the LHDN through the e-filling portal within 9 months instead of 7 months due to the disruption caused by the COVID-19 pandemic. If the actual tax liability is greater than the taxes paid based on estimation, the balance of tax payable has to be paid. On the other hand, you can apply for a refund if the actual tax liability is lower than the taxes paid.

However, for Sdn Bhd companies with a paid-up capital of 2.5 million or less, you don’t have to submit the estimation of tax payable for the first 2 assessment years.

 

  1. Withholding tax

Withholding tax is applicable only if your company is paying a non-resident individual or company (known as the payee) for their services where a certain percentage of the payment is deducted and paid as their income taxes to the LHDN. Each payment type has a different tax rate according to Section 107A and Section 109 of the Income Tax Act 1967. Under the Double Taxation Agreements (DTA), you may apply for a refund of overpaid withholding tax.

Tax rates of withholding tax

Payment TypeRate
Contract payment for services done in Malaysia10% , 3%
Interest15%
Interest paid by approved financial institutions5%
Royalty10%
Special classes of income: Technical fees, payment for services, or payment for use of moveable property10%
Income of non-resident public entertainers15%
Real Estate Investment Trust10% , 25%
Family Fund / Takaful Family Fund / Dana Am8% , 25%
Others10%

When should the tax be paid?

The withholding tax should be paid within 1 month from the date of payment to the non-resident payee. However, any payment falling within the Movement Control Order period can be made from 29th April to 31st May 2020 without penalties being imposed.

 

  1. Payroll tax

As part of the employer’s responsibility, a company with employees will need to retain a percentage of the employees’ remuneration including salary, commission, bonus, incentives, etc. and pay as Monthly Tax Deduction (MTD) to LHDN on behalf of employees who are taxable. This deduction, along with EPF, SOCSO, and EIS, will be stated in the employees’ payslip as PCB (potongan cukai bulanan). The payroll tax can be deducted if the employee is paying Zakat, a payment made under the Islamic law for charitable and religious purposes.

Tax rate of payroll tax

The calculation of PCB can be done based on the MTD schedule or through the Computerised Calculation Method on the e-CP39 portal. The amount of PCB required from each employee varies according to the category they fall in and also the amount of remuneration they receive each month.

When to pay payroll tax?

PCB should be paid to LHDN by the 15th of each month, for the remuneration issued for the previous month. Due to the COVID-19 pandemic, the remittance of MTD for the salaries of March and April will be extended to 31st May 2020.

 

  1. Stamp duty

Your company is required to pay for Stamp Duty when instruments are involved, which are written legal, commercial, and financial documents. Examples of taxable instruments are partnership agreement and mortgage agreement. There are two types of Stamp Duty, one with a fixed rate regardless of the amount stated in the instrument, the other which varies according to the nature of the instrument and the value stipulated. Besides some situations where the Stamp Duty is exempted, you may apply for Stamp Duty relief under certain cases.

For loan restructuring and rescheduling agreements, a 100% stamp duty exemption will be given from 1st March 2020 to 31st December 2020.

Tax rate of stamp duty

All information regarding taxable instruments and exemptions are stated in the Stamp Act 1949. Instruments that are chargeable for Stamp Duty are listed in the First Schedule together with the rates while the persons liable to pay the Stamp Duty are listed in the Third Schedule.

When to pay stamp duty?

The instrument should be stamped within 30 days of the execution of the instrument. The following are ways to pay stamp duty:

  • Digital Franking System
  • Stamp certificate
  • Compound duty
  • Revenue stamp (can be obtained from post offices)
  • Direct payment to the stamp duty counter

For stamp duty payments due during the Movement Control Order, the due date has been extended to 31st May 2020.

 

  1. Sales & Service Tax (SST)

Sales tax is a single-stage tax charged on taxable goods manufactured in or imported into Malaysia by a taxable person and is due when the goods are sold, disposed of, or first used with a total sale value of more than RM500,000 in 12 months. There are exemptions for certain goods manufactured or imported. Effective from 23rd March 2020, the following items will be exempted from import duty and sales tax until a later date to be announced.

  • Face masks
  • Medical equipment such as infrared thermometers and thermal scanners
  • Laboratory equipment such as Inverted Microscope Automated Extractor Machine
  • Personal Protective Equipment (PPE) such as face and eye protection, gloves and protective garments for surgical/medical use
  • Disposal items such as paper bed sheets, respiratory tubing and plastic test tubes

Not to be confused with service chargeservice tax is charged on taxable services in Malaysia such as accommodation, gaming, telecommunication services, etc. provided by a taxable person with a total value of more than RM500,000 in 12 months. For the F&B industry, however, the threshold is a total value of more than RM1,500,000 in 12 months. Credit card services have no threshold and a different rate.

There are several laws that govern SST. You are required to register your company for SST if the requirements are met.

Tax rates of SST

 Rate
Sales Tax5% or 10% or on specific rate
Service Tax6%

* SST does not apply to Special Area.

When should the tax be paid?

SST should be paid bi-monthly, except for the 1st tax period after your registration with RMCD. For hotel and other accommodation operators, service tax exemption is given from 1st March to 31st August 2020.

 

  1. Real property gains tax (RPGT)

Real property gains tax is applicable only if your company disposes of chargeable assets such as houses, commercial buildings, farms, and vacant lands, and also shares in real property companies, gaining profit from the disposal. The calculation of chargeable gain is the disposal price minus by acquisition price. Governed under the Real Property Gains Tax 1976, the tax rates differ according to the holding period of the chargeable assets.

Tax Rates of RPGT

Disposal Period (after the year of acquisition)Rate
Within 3 years30%
The 4th year20%
The 5th year15%
The 6th year and above10%

 

When to pay RPGT?

You and the acquirer of the chargeable assets are required to file the tax within 60 days from the date of disposal. The acquirer will pay part of the purchase consideration which will be deducted from the RPGT payable. After filling the tax, an assessment notice will be issued for taxable cases; for non-taxable cases, a certificate of non-chargeability will be issued instead. You are then required to pay the RPGT payable within 30 days from the date the assessment notice is issued. For submission and payment of RPGT that fall within 18th March to 31st May 2020, the due date is extended to 31st May 2020.

Besides the taxes stated above, there are customs dutyexcise duty, property taxes (cukai tanah and cukai pintu) and other taxes which might be applicable to your company according to industry and nature of business. Besides, please bear in mind that Labuan has a different tax regulation than other States in Malaysia. Fulfilling this obligation as a company should not be an obstacle that hinders your business growth or operations. Hence, understanding the taxes at the early stage of your business ensures full compliance with the tax law and regulations.

All You Need to Know about SST Malaysia

What is SST Rate in Malaysia?

Following are the SST Malaysia rates applicable to different goods and services

Rate Type Which goods or services
10% Standard The goods are charged with SST throughout the process or chain of B2B. This kind of tax isn’t deductible by the taxpayer.
6% Standard The sales and service tax is also applicable on the services. It is only due when the services are offered to the non-tax registered final consumer. These services include hotels and accommodation, restaurants, car repair & rental services, insurance, domestic flights, credit cards, business consulting, legal/accounting services, telecoms, electricity.
5% Reduced SST Malaysia rates are less for goods like petroleum oils, construction materials, telecommunications, foodstuffs, IT, and printing materials and hardware.

Who Pays SST in Malaysia?

The local or international businesses performing their activities in Malaysia are bound to pay SST if they exceed a specific annual income threshold. At present, this threshold is set at a figure of RM500,000.

Businesses already registered with the GST don’t need to register again for the sales and services tax. This is so, as their data will be transferred to create the SST Malaysia registration. The overall process of registration is simple as it is an online procedure.

If you are confused about how and where these tax rules will be applied, don’t worry! We, as a top accounting firm, can provide you best taxation advisory services for GST and SST in Malaysia.

What does SST stand for?

SST is an abbreviated term for “Sales and Services Tax”, which is a new tax collection system introduced in Malaysia. It’s a single-stage tax that is levied on all types of taxable goods being manufactured and sold within the country.

If the products or goods are taxable, SST is levied on them irrespective of the fact that whether Malaysian registered manufacturer has manufactured these goods or they have been imported.

However, there are various products or goods, exempted from sales, and service tax. These goods are listed in the “Sales Tax Exemption Order”.

Non-mandatory Statutory Compliance Guide for Malaysian Start-ups

The Companies Act 1965

The Companies Act 1965 was the pioneer law ascertained to govern starting and running a company in Malaysia. Although the law has been replaced with Companies Act 2016 yet there are various key updates that streamline the statutory compliance a company is required to follow. These regulations are only restricted to companies that are registered after the Companies Act 2016 came into force. These are some examples of compliance a company is no longer obliged to follow:

Common seal

A common seal is a melted wax impression or an indentation on any official document that holds the document officially executed. According to the Companies Act 2016, 2 signatures authorized persons are required out of which one should be the director for the execution of documents.

If in case, the company has only one director, signatures of the director and one witness are permissible. Henceforth, newly registered companies no longer need a common seal.

Memorandum and Articles of Association (M&A)

In the former years, M&A was established in the constitution to govern a company including responsibilities of directors, allotment of shares, etc. Today, The Companies Act 2016 can be utilized as a constitution per se without any need to ascertain a separate M&A unless the company requires more rules and regulations for smooth functioning.

AGMs are organised every year between the directors and shareholders of a company to evaluate the company’s performance as well as plan business strategies for the coming year. However, holding an AGM every year is no longer mandatory for private limited companies in Malaysia. The directors and shareholders of the company are given rights to sign a circular resolution without organising an in-person meeting.

Annual General Meeting (AGM)

Submission of Tax Payable Estimations

Corporate tax is one of the company tax payable estimations in Malaysia that is needed to be submitted within 3 months of operation for a new company. For companies with capital of less than 2,000,000 Malaysian Ringgit, the estimation of tax payable is not required to be submitted for the first 2 assessment years. In such a case, the company is only required to file the corporate tax within 7 months after the end of the assessment year.

 

Sales and Service Taxes (SST)

If your company offers taxable goods or services to customers, you might want to know when you can start collecting Sales and Service Taxes (SST) from the customers. Your business needs to register for SST if your annual sale value exceeds 500,000 Malaysian Ringgit in twelve months.

If you are confused about how SST will be applied, don’t worry! We, as the best audit firm in Malaysia, can provide you the most comprehensive taxation advisory services for SST in Malaysia.

 

Audited Financial Statement

Every year, the company secretary files the annual returns and financial statements of your company to the SSM. However, you are free to put forward an unaudited financial statement if your company belongs to one of these three categories:

Dormant companies

It includes the companies that have had no transaction since their inception.

Companies with zero revenue

It incorporates companies with zero revenue for the current as well as past two financial years adding up to a total asset of less than 300,000 Malaysian Ringgit.

Threshold-qualified companies

It includes companies with less than 100,000 Malaysian Ringgit revenue with total assets adding up to less than 300,000 Malaysian Ringgit along with less than 5 employees for the current and past 2 financial years.

 

company secretary Malaysia is best suited for the job. They can offer advice in regard to laws and regulations of running a company. These experts can also get you in touch with a pertinent professional for other required services. For further readings, check out this guide on all you need to know about company secretary Malaysia

That said, do not let statutory compliance of your company come in the way of growing your business operations. It is best to appoint an experienced company secretary to assist you readily in making well-informed decisions with statutory compliance.

 

Benefits of Outsource Accounting Services in Malaysia

Efficient

By looking for redistribute bookkeeping administrations, you can spare a ton of time. Which means consequently, you can use such time in other beneficial exercises to help your business. For example, you can zero in on center business exercises, which would assist you with producing more income.

Moreover, deciding on extraordinary compared to other re-appropriate bookkeeping administrations likewise mitigates yourself from the problem of keeping up back-end bookkeeping. It would help you to bring down the pressure related with keeping up your business accounts. Then again, you can improve the effectiveness and profitability of your business by using redistribute bookkeeping administrations Malaysia.

Equipped and Reliable Services

At the point when you re-appropriate representing private company or an enormous substance, you can make certain of the best record or examining administrations. The profoundly talented and experienced staff would take great consideration of bookkeeping errands. Regardless of whether you have to record the assessment forms or need somebody to deal with your accounting errands, you can take the help of the re-appropriating bookkeeping administrations in Malaysia.

Moderate and Cost-powerful

There is a wide exhibit of organizations, which battle to keep up their free records office. This is along these lines, as it requires the business to hold up under weighty costs regarding compensations of expert bookkeepers.

In actuality, in the event that you have decided to pick re-appropriate bookkeeping administrations, you can set aside a great deal of cash. For example, you are not needed to employ the bookkeeping staff for your organization. In this manner, you don’t have to stress over the costs connected with staff pay, execution rewards, health advantages, or protection costs.

Greatest Convenience

By and large, redistribute bookkeeping administrations Malaysia fill in as an all in one resource. This recommends you can benefit of a wide range of administrations related with the bookkeeping and inspecting needs of your organization. For example, these re-appropriated bookkeeping arrangements can deal with an assortment of issues like duty, bookkeeping, inspecting, warning, and comparative other fund related administrations.

Guarantees the Best Possible Outcomes

By using the administrations offered by an outsourced accounting firm, you can make certain of the most ideal results. The certified and experienced bookkeepers/evaluators expertly play out their administrations. Thus, every one of your announcements and bookkeeping records will remain fit as a fiddle. Additionally, the nature of work done by these specialists likewise satisfies the budgetary revealing principles of Malaysia.

Assists with developing your Business

These arrangements likewise offer money related guidance to the business. It causes such organizations to develop by considering the guidance of master experts. By understanding the diverse budgetary regions, you can extend your business inside the less foreseen time.

Everything You Need to Know About the Vacancy Tax in Malaysia

Opening expense has been in the news for some time because of the oversupply of properties, which are profoundly evaluated and left unsold because of unacceptability. Manufacturers who needed higher overall revenues assembled these properties, and now the Malaysian government is to force opening assessment on such developers for unsold properties. An opportunity charge is forced as the punishment dependent on the level of gross selling on the properties that are left empty and are unsold for a particular measure of time.

 

Dr. Carmelo Ferlito, CEO at Center for Market Education, and a senior at Institute for Democracy and Economic Affairs, accepts that the up and coming activities may get disheartened on the burden of an opening duty on engineers. He expressed that the burden of opportunity expense would be an infringement of property rights. The designers and individual proprietors ought to be given the freedom to discard their properties.

 

Ferlito further noticed that an opportunity expense would set a dangerous model of managerial deduction. It pictures the administration’s entitlement to intrude with the removal of a property when the cycle of removal isn’t going toward a path that is “socially” attractive. He included that the oversupply of unsold properties is a dynamic of the market cycle that returns through business variances.

 

He further included, such a move will debilitate future activities as one would fear wrong ventures and dissuade pioneering activities that could be generally effective.

 

Appointee Federal Territories Minister Datuk Seri Edmund Santhara Kumar expressed, the administration will examine the suggestion of forcing opening duty on designers to address the issue of unsold extravagance apartment suite units in the Klang Valley.

 

There were 2,260 unsold apartment suite units inside the Klang Valley as per The National Property Information Center, out of these unsold townhouses 498 extravagance units were worth in any event RM1m as of the second quarter of 2018.

 

CBRE Group Inc and CH Williams Talhar and Wong Sdn Bhd MD Foo Gee Jen expressed an opening duty which is normally joined by a theory charge is to control the exorbitant costs and is restricted to private property. He further included an opening duty is typically focused in “nonattendance proprietorship.” This nonappearance possession generally applies to unfamiliar purchasers in a particular nearby market.

 

He stated, in Malaysia, under the Local Government Act, the empty property appreciates a discount for evaluation; rather, covering charges. Notwithstanding, Foo noticed that an opening expense would hamper future activities in Malaysia. It is a counterproductive move in when the nation needs more unfamiliar speculation.

 

Knight Frank Malaysia Sdn Bhd MD Sarkunan Subramaniam said that the motivation behind monumental opportunity assessment is guarantee that proprietors don’t keep their properties empty for high-overall revenues. Rather, they lease it out on lower rents.

 

He said the recommendation of an opportunity assessment would be deadly to the property markets as the proprietors should decrease the lease in a market where properties are now oversupplied. He further included, it is difficult to screen empty properties for the burden right now.

What is Company Secretary Malaysia?

Talking about the secretary of a Malaysian company, this particular role holds a key position in creating as well as operating a company in Malaysia. According to the Companies Act 1965 (section 139A of), it’s obligatory for a company to hire a qualified company secretary.

 

 

What is the Qualification of Company Secretary?

 

 

 

What are the Roles and Responsibilities of a Company Secretary?

 

  • A company operating in Malaysia employs the company secretary (Co-Sec). Such a role involves a variety of responsibilities. 
  • Some of these roles include:
  • A company secretary needs to comply with advisory and statutory requirements 
  • Attend meetings and prepare resolutions of both board and members
  • Keep the company’s statutory books and records in an up-to-date condition
  • Maintaining regular communication with the shareholders

 

  1. Compliance with statutory requirements and advisory

 

The corporate secretary must ensure that all the operations of a company are within the ambit of the Companies Act 1965. He/she should update the SSM with any change in the statutory information of the company.  

For this purpose, the secretary must submit the completely filled forms that are prescribed by the law. These forms should reach the company’s registrar within a given period. Moreover, the secretary must advise the director/s regarding annual meeting of the company.

 

 

  1. Attend meetings and prepare resolutions of both the board and members

The secretary must take part in almost every board meeting.  Furthermore, corporate secretarial services malaysia also include advising the director/s on secretarial matters. 

In addition, the secretary is also required to send notices and circulars and stay in contact with shareholders when taking care of the company’s matters. 

One of the most essential company secretarial services is the filing of annual returns. This task needs to be completed within a given deadline.

Some of the most prominent responsibilities of a company secretary associated with board meetings are listed below:

  • Booking a meeting room and making some other preparations 
  • Liaising with the managing director or chairman regarding agenda papers 
  • Take down the minutes of the meeting and enter them into minute books
  • Clearly inform the company executives regarding the decisions made in a board meeting
  • To make sure that the meeting is carried out in accordance with a prescribed method

 

 

  1. Keep the company’s statutory books and records in an up-to-date condition 

If any change happens within the structure of a company, the secretary is responsible for updating the statutory registers of such a company. For instance, the secretary is bound to maintain the Register of Members and Register of Directors. 

Such a person is also responsible for keeping the important company documents at a safe and secure place. These documents include “Certificate of Incorporation”, “Share Certificates”, “Memorandum and Article of Associations” and “Minutes of the meeting”.

 

  1. Maintaining regular communication with the shareholders

The corporate secretary must maintain consistent communication with the director/s. The secretary also issues notifications and documents associated with the monitoring of a company’s operations.  

The company secretary serves as a bridge between the company and shareholder/s. Therefore, all the key announcements should be communicated to the executives via secretary. 

Penalty late submission on tax payment LHDN

PURPOSE

 

These guidelines explain the imposition of penalties on

taxpayers who are late or fail to submit a return form in

the period prescribed under the Income Tax Act 1967 (ACP 1967),

Petroleum (Income Tax) Act 1967 (APCP 1967) and Tax Act

Real Estate Gains 1976 (ACKHT 1976).

 

BORANG NYATA DI BAWAH ACP 1967

Seksyen 77A ACP 1967

 

BORANG NYATA DI BAWAH APCP 1967

 

BORANG NYATA DI BAWAH ACKHT 1976

 

KADAR PENALTI LEWAT MENGEMUKAKAN BORANG NYATA

 

PENALTI DI BAWAH SUBSEKSYEN 51(3) APCP 1967

 

PENALTI DI BAWAH SUBSEKSYEN 29(3) ACKHT 1976

 

KADAR PENALTI BAGI KEGAGALAN MENGEMUKAKAN BORANG NYATA

 

 

Malaysia Issues Stimulus Package to Combat COVID-19 Impact

In February 2020, the Malaysian government issued an emergency stimulus package worth US$4.8 billion to counter the economic impact of the corona virus (COVID-19) outbreak.

The package implements strategies that include spurring economic growth, promoting investments, and encouraging businesses to adopt automation and digitization in their processes.

Mitigating the immediate impact of COVID-19

The government has devised a number of measures to mitigate the short-term impact of the COVID-19 outbreak, aimed primarily at the tourism industry. Below are some of the key features.

Restructuring and rescheduling of loans

The government has asked financial institutions to provide financial relief to borrowers by rescheduling or restructuring loans, as well as offering payment moratoriums. There will be a 100 percent stamp duty exemption arising from these rescheduling, restructuring, or moratoriums. The exemption is given from March 1, 2020, until December 31, 2020.

Assisting the cash flow of small and medium-sized enterprises

Bank Negara Malaysia (BNM), the country’s central bank, will provide 2 billion-ringgit (US$453 million) worth in loans for small and medium-sized enterprises (SMEs). The funds will be distributed through commercial banks at an interest rate capped at 3.75 percent per annum.

Each SME will be eligible to receive up to 1 million ringgit (US$226,000) with a tenure of 5.5 years – this includes a 6-months payment moratorium. The government will provide banks with an 80 percent guarantee on the loans.

Moreover, the government has prepared a 200 million ringgit 500 million ringgit (US$43 million) micro-credit scheme for small businesses in the tourism industry.

Tax exemptions and deferments

Travel agencies, hotels, airlines, as well as businesses in the tourism industry, will be given a deferment of their monthly tax installments for six months starting April 1, 2020. Hotels will also be exempt from service tax from March 1, 2020, until August 31, 2020.

Discount vouchers for tourism

To support the tourism industry, the government has allocated US$113 million in the form of:

  • Travel discount vouchers – the government, in collaboration with airlines, resorts, and hotels, will offer discount vouchers of to 100 ringgit (US$22) per person, starting March 2020; and
  • Increased tourism promotion – 30 million ringgit (US$6 million) will be provided to Tourism Malaysia, the country’s tourism board, to increase promotion on Malaysian tourism in the Middle East, Europe, ASEAN, and South Asia.

Tax relief for domestic tourists

A special income tax relief worth 1,000 ringgit (US$226) is available to individuals for expenses on domestic tourism from March 1, 2020, to August 31, 2020.

This is limited to entrance fees for tourist attractions and expenses on accommodations at premises registered with the Ministry of Tourism, Arts, and Culture.

Extra funding for skills training

The government will provide 100 million ringgit (US$45 million) to help businesses affected by COVID-19 to upgrade the skills of its workers. This includes for sectors, such as retail, hospitality, and tourism in addition to electrical, electronic, and automotive manufacturing.

Another 50 million ringgit (US$11 million) will be provided to finance short courses, in particular, to improve the digital skills of employees, and 20 million ringgit (US$4.5 million) will be allocated to fund short courses for employees in the manufacturing sector.

Spurring economic growth

The package aims to spur economic growth by boosting household income and implementing ‘people-centric projects’.

Reducing the employee contribution towards the Employee Provident Fund (EPF)

The Employee Provident Fund (EPF) is a compulsory saving and retirement plan for private-sector workers in Malaysia. Employees usually contribute between 11 percent to seven percent from their monthly salary. This has now been reduced to four percent, potentially increasing cash in the hands of households by some 10 billion ringgit (US$2.2 billion).

Financial assistance to low-income households

Low-income households will begin receiving a monthly payment of 200 ringgit (US$45) scheduled for May to be paid in March. Families will also receive an additional one-off payment of 100 ringgit (US$22).

Implementing small scale infrastructure projects

The government has allocated 2 billion ringgit (US$450 million) for infrastructure projects, such as maintaining roads, bridges, streetlights, drainage systems, and water supplies, among others, at the federal, state, and local government level. This is aimed at assisting small-scale contractors and encouraging economic activities.

From this budget, 200 million ringgit (US$45 million) is assigned to the repair and maintenance of housing and public amenities whereas 150 million ringgit (US$33 million) will go towards the maintenance of alternative electricity and water supply in rural areas.

Agrofood

BNM has allocated a loan scheme for SMEs involved in the food production industry totaling 1 billion ringgit (US$226 million).

The loan scheme is available for a period of eight years at 3.75 percent interest; an eligible SME will able to receive 5 million ringgit (US$1.1 million).

In addition, the government will allocate 40 million ringgit (US$9 million) to help SMEs in the agriculture sector. This fund will be used to enable SMEs to sell their products on e-commerce platforms and therefore to a larger pool of consumers.

Funding for startups

Some 500 million ringgit (US$113 million) will be available for early stage and growth stage Malaysian companies. This fund will be co-funded by the government and the private sector.

SME digitization and automation

A total of 300 million ringgit (US$68 million) in loans has been prepared for SMEs looking to digitalize or automate their business. The financing can be used to help purchase hardware, software, and other IT solutions and services, in addition to equipment and machinery.

Eligible SMEs can receive up to 3 million ringgit (US$679,000) with the tenure offered up until 10 years.

Sales tax and import duty exemption on equipment and machinery

This incentive is exclusive for port operators who need to import machinery or equipment, used in port operations. The incentive is valid from April 1, 2020, to March 31, 2023.

Waiver of listing fees

The Securities Commission and Bursa Malaysia will waiver listing fees for companies seeking to list on the LEAP or ACE market. This waiver is valid for a 12-month period. The incentive is also open to companies with a market capitalization of less than 500 million ringgit (US$113 million) seeking to list on the Main Market.

Special Tax Deduction on Rental Reduction

  1. Who is eligible? 

All taxpayers (individual/ cooperative/ other business/ non business entities) who rent out business premises to qualified SMEs tenants;

The rented premises must be used by the SME tenant for business purpose;

Landlord must be taxpayer who is receiving rental income under Subsection 4 (a) and 4 (d) of Income Tax Act 1967.

  1. When is the eligible period? 

From April 2020 until 30 September 2020.

  1. What is the minimum rental reduction for landlord to enjoy this special deduction?

The rental reduction must be at least 30% from the current monthly rental rate.

  1. Is the landlord eligible if he reduces the rent at different rate each month but all rate exceeds 30%?

Yes, as long as the reduction rates are not less than 30% in each of the eligible months.
If in any of these eligible months, the rental reduction is less than 30%, then the company is not eligible to claim the special deduction for that particular month/months.

  1. What is the special deduction amount? 

The amount of special deduction is equivalent to the amount of monthly rental reduction offered by landlord to eligible SMEs tenants.

  1. Definition of SMEs

The definition of SME for this purpose follows the National SME definition.
For more information, please click here to refer to the SME Definition Guideline

SMEs that are eligible for this special tax deduction are registered SMEs and have obtained SME Status Certificate from SME Corp. Malaysia

Any queries regarding eligibility or registration as an SME can be directed to SME Corp at SME Corp Malaysia at 1300-30-6000 or email to info@smecorp.gov.my

  1. Who is not considered as SMEs?

Public listed entities on the main board

Subsidiaries of:
✔ Publicly listed companies on the main board
✔ Multinational corporations (MNCs)
✔ Government linked companies (GLCs)
✔ Syarikat Menteri Kewangan Diperbadankan (MKDs)
✔ State owned enterprises

  1. Is a company qualified for this deduction if rents out premise to related company? 

The company (landlord) is eligible for this special deduction if the related company (tenant) qualifies as SME.

  1. What is meant by business premises for this special deduction?

All premises used for business purpose (i.e office/workshop/ childcare/ warehouse/ rented lot/ bazaar/ booth /stall).

Residential house used for both residential and business is NOT qualified for this special deduction.

  1. Is this special deduction applicable for rental of machines/ parking spaces/ telecommunication towers? 

No. This special deduction is only applicable to rental of business premises used for business purpose only.

  1. The landlord has received rental payment for April until June 2020 earlier this year.
    Can the landlord offers rental reduction and claim special deduction?

Yes. Landlord who has received rental payment in advance is still allow to offer rental reduction as long as all conditions are fulfilled.

  1. What are the required supporting documents?

Taxpayer (landlord) who claims this special deduction is required to keep the following documents:

i. Stamped tenancy agreement;

ii. Rental income statement;

iii. SME Status Certificate issued by SME Corp.*;
*Information regarding registration of SME can be referred at https://smereg.smecorp.gov.my

iv. Tenant’s information, rental information and rental reduction methods**
**To be provided in working sheet (HK) of Company Return Form, please refer to the example attached as below:

 

  1. Illustration:

A Sdn Bhd rents a shop lot to B which is an eligible SME for RM5,000 a month (RM60,000 yearly).
A Sdn Bhd has agreed to offer rental reduction to B for the month of April 2020 to September 2020, of RM2,500 a month.

Everything You Need to Know About Invoice Financing in Malaysia

What is Invoice Financing?

Invoice financing is a way for companies to borrow money, with respect to the money due to its customers. It allows businesses to use unpaid invoices as a collateral to get short-term loans.

For a better understanding, say that you sell a product to your customer. Now, the customer tells you that they will only be able to pay you after some months.

Invoice financing is when you take the funds that the customer owes you from a third party, and pay the third party back when the customer gives you the money. In some cases, you can connect the debtor (customer) to the loaner.

 

Who Offers Invoice Financing?

Registered third parties, including banks, financial houses, and Malaysia accounting services may offer invoice financing.

 

Why is Invoice Financing in Malaysia Growing?

Well, there are many benefits of invoice financing. We list some of them:

Better Cash Flow

Companies need money to operate. They need to invest in capital, pay their employees, do promotion, and run other processes that require finances. With invoice financing, firms can easily cover the expenses and make use of new opportunities as soon as they are available. They no longer need to wait for customers to pay them.

A Better Customer Service

Customer service is another important aspect where invoice financing helps. In some cases, there may also be ‘trends’ or ‘standards’ in an industry, where customers are used to being given specific terms to pay their amounts.

Waiting for a lot of time to receive payments may affect a small business’ growth. This basically means without invoice financing, you may have to compel your customers to pay fast, which may give a negative message to them.

On the other hand, if you go for financing, you will not have to call your customers frequently. As long as you are sure they will pay, you can mind your own business, which is going to make everyone happy.

It is Easy to Set Up the Financing

Invoice financing isn’t connected to a lot of risks, so fund providers aren’t that picky about their clients. Most likely, there wouldn’t be a lot of requirements. If you are a genuine business and don’t have any ill-intents, you should get the financing without any troubles. Having good records in the past is going to help, of course.

Furthermore, setting up financing doesn’t take a lot of time. After setting up the financing, and getting an invoice, most of the money is released within 24 hours. In other words, invoice financing brings you short-term, low risk, and very fast funds.

No Hassle

Like what’s said above, you can start receiving funds as soon as you set up your accounting. Adding on to that, there isn’t a complicated process for securing the funds.

You don’t need a lot of assets. In most cases, the only collateral you’ll need is the invoice itself. This makes invoice financing in Malaysia an excellent choice for growing SMEs that don’t own a lot of things but still are finding a good number of customers.

What Business Owner Should Know About Starting a Small Business in Malaysia?

Decide the Business Type

If you are a local entrepreneur, the registration of business Malaysia can be done as a Sole Proprietor, Limited Liability Partnership (LLP), or General Partnership. These are the common business entities available for registration of business Malaysia.

 

Choose a Business Name

Choosing a business name is crucial to have in mind when learning how to register new company Malaysia. In fact, one of the toughest steps in how to register new company Malaysia is choosing the perfect business name.  You can check with Suruhanjaya Syarikat Malaysia (SSM), the commission for registration of business Malaysia on their website. You can also get a local agency to make inquiries about how to register new company Malaysia.

Run a name check after you have handpicked the business name. You can complete the Request for Availability of Name (Form 13A of the CA) and submit to SSM. You need to pay a fee at RM30.00 for each name applied. After the name check, you can register the name with commission for registration of business Malaysia, SSM, to get approval. If your name is approved by Commission for registration of business Malaysia, SSM, it will be reserved for three months.

 

Scout for a Business Premise

A good business location is part of your marketing strategy. Therefore, it’s paramount to make adequate research, in order to pick the best location for your business. Not only is the country where your business located important, the actual town, area, street, and office number are important.

In Malaysia, every business must have a legally registered local office address. Some of the important points to consider when scouting for a location are:

  • Convenience
  • Ease of finding
  • Traffic flow
  • Logistics
  • Transportation
  • Parking
  • Proximity to various other facilities and available amenities

 

Prepare the Incorporation Documents for Registration of Business Malaysia

You need to submit the Incorporation Documents to the commission for the registration of business Malaysia, SSM, within 3 months from the approval date of the company’s name. Failure to lodge your incorporation documents, you will need to apply for a new name search. Documents required by the agency for registration of business Malaysia include:

  • Memorandum and Article of Association/Constitution
  • Statutory Declaration by a Director or Promoter before Appointment
  • Declaration of Compliance
  • Company Name’s approval letter from SSM (one copy)
  • Identity Card of every director and company secretary (one copy each)