Tax Bulletin 22 Apr 2020 - Updates on Tax Matters

Kuala Lumpur, 22 April 2020 – We would like to share with you the following updates:-

(A) Frequently Asked Questions (FAQ) on Tax Matters
The Inland Revenue Board (IRB) has updated its Frequently Asked Questions (FAQ) on Tax Matters [click here] on 21 April 2020 on contributions or donations to the COVID-19 Fund. Please refer to Section G. Contribution / Donation for further details on contributions / donations under paragraph 34(6)(h) and subsection 44(6) of the Income Tax Act (ITA), 1967.

Section G sets out the eligibility criteria and the ceiling on tax deductions related to contribution in cash/in-kind/medical equipment made by taxpayers associated with COVID-19.

(B) Frequently Asked Questions (FAQ) on the revision of tax estimate in the third-month instalments in the year 2020 and deferment of instalment payment for companies in the tourism industry as well as Small and Medium Enterprises (SMEs)

Further to the earlier announcement under Economic Stimulus Package, the (FAQ) [click here - available in Bahasa Malaysia only] was issued to provide further clarifications and we would like to highlight the following pertinent points from the FAQ:- 
Revision of tax estimate in the third-month instalment in the year 2020

  • The above revision of the tax estimate shall not be subject to the 85%rule for the estimate of tax payable based on the immediate preceding year of assessment.

  • The 10% tax increase under subsection 107C(10) of ITA, 1967 will continue to apply where the tax payable exceeds the revised estimate of tax payable by an amount of more than 30% of the actual tax payable for the year.

  • The application for the above revision need not await IRB approval provided the information in the application submitted to the IRB is complete and meets the stipulated conditions.

  • Companies that are eligible for deferment of CP204 payment (i.e. companies in the tourism industry and SMEs) can also revise their tax estimates in the third-month instalment falling in the year 2020.

Deferment of instalment payments for companies under the tourism industry as well as SMEs

  • The deferment of CP204 payments applies to all companies in the tourism industry and SMEs with instalment payments due during the deferment period (i.e. 1 April 2020 to 30 June 2020 for SMEs / 1 April 2020 to 30 September 2020 for companies in the tourism industry).

  • The above FAQ also provides a list of Malaysian Standard Industrial Classification (MSIC) codes of the companies in the tourism industry which are eligible for the deferment of instalment payments. Please refer to the FAQ for the full list of the MSIC codes. 

Lastly, some examples are also given in the final section of the above FAQ. Please refer to the examples for further information.

For any enquiries or assistance, please contact any of the following in this office:

Mr Anand Chelliah
Managing Partner, Tax Services
Asia Pacific Tax Leader
DL: +6 (0)3 2297 1093

Mr Marcus Tan
Executive Director (Corporate Tax & Tax Incentive), Tax Services
DL: +6 (0)3 2297 1521

Mr Yohan Francis
Executive Director (Transfer Pricing), Tax Services
DL: +6 (0)3 2297 1096

Mr Murugan Anbanantham
Director (Technical), Tax Services
DL: +6 (0)3 2297 1004

Ms Tay Siew Chu
Associate Director (Corporate Tax & Personal Tax), Tax Services
DL: +6 (0)3 2297 1139

Ms Sandra Saw
Associate Director (Corporate Tax & Sales Tax and Service Tax), Tax Services
DL: +6 (0)3 2297 1146