TaXavvy Issue 30/2021

In this issue:

Revision of estimate of tax payable in the 11th month and deferment of tax instalments

Following the announcement under Budget 2022, the Inland Revenue Board (IRB) has issued: 

• FAQ on the revision of estimate of tax payable in the 11th month for the years of assessment 2021 and 2022 and the deferment of tax instalment payments for micro, small and medium enterprises (MSMEs) (“FAQ”). The FAQ was first issued on 25 November 2021. The latest version was updated on 3 December 2021. 

• Application form for the revision of the estimate of tax payable in the 11th month.

Special Income Remittance Programme (“PKPP”)

The IRB has issued a media release offering the PKPP to residents in Malaysia following the proposed removal of exemption on foreign-sourced income under Budget 2022.

Substantial activity requirements for Labuan entities

The Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2021 ("2021 Regulation") has been gazetted on 22 November 2021. The 2021 Regulation revokes and replaces the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018.

Exemption from restriction on deduction for payments made to a Labuan entity

The Income Tax (Exemption) (No. 11) Order 2021 (“Exemption Order”) has been gazetted on 23 November 2021. 

Guidelines on Tax Treatment for Financial Institutions Adopting MFRS 9

Following the issuance of the Income Tax (Special Treatment for Bank or Development Financial Institution which Adopt Malaysian Financial Reporting Standard 9: Financial Instruments) Regulations 2021, the IRB has issued Guidelines on the Income Tax Treatment for Bank or Development Financial Institution which adopt MFRS 9 - Financial Instrument.

Stamp duty remission in relation to service agreements

The Stamp Duty (Remission) Order 2021 in relation to instrument of service agreement has been gazetted. It is effective from 28 December 2018.