TaXavvy Issue 21/2022

In this issue:

Tax Exemption on Shipping Profits

The Income Tax (Exemption) (No. 7) Order 2022 providing tax exemption on shipping profits has been gazetted.

Updated FAQ in relation to Withholding Tax on Payments Made to Agents, Dealers and Distributors

The Inland Revenue Board (IRB) has issued the FAQ on the deduction of tax at 2% on payments made to agents, dealers and distributors by a company under Budget 2022, updated on 21 October 2022.

Special Withholding Tax Forms for Payment of Small-Value Withholding Tax

The IRB has issued a media release dated 27 October 2022 to inform that special withholding tax forms have been issued for the purposes of small-value withholding tax.

Approved Food Production Incentives

The following gazette orders on Approved Food Production incentives have been issued:

• Income Tax (Exemption) (No.6) 2020 (Amendment) Order 2022
• Income Tax (Deduction for Investment in Approved New Food Production Project) Rules 2022

Guidelines on Tax Treatment for Labuan Entities with Dormant Status

The IRB has issued the Guidelines on Tax Treatment for Labuan Entities with Dormant Status (“the Guidelines”) which is effective from YA 2020. The Guidelines is issued following the Labuan Investment Committee Pronouncements 1-2019 and 2-2019 in relation to compliance with substantial activities requirements and audited accounts by dormant companies for the purposes of Labuan Business Activity Tax Act 1990. 

FAQ on Tax Deduction of Renovation and Refurbishment Costs

The IRB has updated the FAQ on tax deduction of renovation and refurbishment costs (“the FAQ”). The FAQ was previously covered in TaXavvy 9/2021.