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© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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Tax WhizTax highlights from your advisers
KPMG in Malaysia
12 May 2020
Guidelines on the Application for Approval of a Covid-19 Relief Fund Under Subsection 44(11C) of the Income Tax Act, 1967 (“ITA”)
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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Tax Whiz 2020 | 12 May 2020
Guidelines on the Application for Approval of a Covid-19 Relief Fund Under Subsection 44(11C) of the ITAThe Malaysian Inland Revenue Board (“MIRB”) has, on 5 May 2020, issued the “Guidelines on the Application for Approval of a Covid-19 Relief Fund under Subsection 44(11C) of the ITA.” Under Section 44(11C) of the ITA, a tax deduction against the aggregate income of a person (subject to restriction) is allowed for cash donations or contributions in-kind, made by the person for any project of national interest approved by the MOF. The issuance of the Guidelines demonstrates that the Ministry of Finance (“MOF”) recognises the initiatives to fight against the Covid-19 outbreak as a project of national interest.
The above Guidelines explain the conditions and procedures in applying for the approval of a Covid-19 Relief Fund (“Relief Fund”), including:• eligibility criteria for the applicants; • qualifying recipients of the Relief Fund; and• qualifying donations.
The salient points of the Guidelines have been set out below.
Qualifying DonationsThe following donations can be set off against the aggregate income of a qualifying person.
Aggregate Income
Cash
EquipmentSuch as ventilators, patient beds, air conditioners
Disposable itemsSuch as masks, hand sanitiser, gloves, test kits and Personal Protection Equipment
Total Income
Less: Qualifying Donations **
ServicesSuch as:
− disinfection & sanitisation costs (roads, buildings, markets, places of worship, etc.);
− cost of provision of mobile toilets;
− cost of shipping supplies.
Financing the provision of permanent or temporary infrastructureExamples: tent / marquee tent for additional beds
** The amount to be deducted shall not exceed the difference between 10% of the aggregate income and the total amounts deducted under Sections 44(6) [cash donations to approved institutions/organization], 44(11B) [cash donations for approved sports activity] and 44(11D) [wakaf or endowment made] of the ITA.
Raw / readily edible food itemsExamples: rice, oil, soy sauce, sugar, canned food and readily edible food items
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
22© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Tax Whiz 2020 | 12 May 2020
• A non-profit oriented entity established and registered in Malaysia as:(a) A company incorporated and limited by guarantee under the Companies Act 2016 –
Companies Commission of Malaysia;(b) A society registered under the Societies Act 1966 – The Registry of Societies Malaysia;(c) Trustees of bodies or association of persons incorporated under the Trustees (Incorporation)
Act 1952 – Legal Affairs Division of the Prime Minister’s Department; or• An institution/organisation approved under subsection 44(6) of the ITA (subject to certain
conditions)
• Government departments / agencies • Non-governmental agencies which are registered with relevant authorities (as specified)• Government / private hospitals• Public universities• Orphanages / nursing homes for the elderly / homes of people with disabilities • The homeless, hardcore poor and refugees **• Animal shelters / zoos
The donations must not be made for profit or political motives. Recipients should also have their income tax file numbers (if available), except for the recipients indicated with ** above.
Conditions and Procedures
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1 Qualifying Applicants of the Relief Fund
Qualifying Recipients of the Relief Fund
3 • Start and end date of the collection of funds for the Relief Fund• List of identified donors (if available)• Targeted donation amount (if available)• List of identified donees and forms of donations
Please refer to Appendix B of the Guidelines for the application form.
Information Required
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
33© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Tax Whiz 2020 | 12 May 2020
The founder / applicant of the Relief Fund is required to appoint board members / committee members / members of the board of trustees to manage the fund. More than 50% of the members should have no relationship with the founder of the Relief Fund. ‘Relationship’ is defined as:-• Family relationships such as parents, children and siblings including close family relationships;• Employer and employee relationships; or• Directors / employees from the same company or group of companies
The founder and members of the Relief Fund, including the employees of the entity that has established the Relief Fund, are not allowed to enjoy benefits from the Relief Fund.
• For cash donations, an official receipt containing the relevant details must be issued to donors [Item 3.6(a) of the Guidelines]
• For donations in-kind, the Relief Fund (as approved by the MOF) will need to issue an acknowledgement of the receipt of donations from the donor with its official stamp as per the format in Appendix D of the Guidelines
• The donor is required to keep the official receipt / acknowledgement of receipt as well as the approval letter from the MOF (whichever relevant) for the purposes of claiming a tax deduction, which can be made from Year of Assessment 2020
Conditions and Procedures (Cont’d)
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Appointment of Members
Documents to be Kept for Income Tax Purposes
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• The application for the establishment of the Relief Fund can be submitted to the MOF from 30 April 2020 to 31 August 2020
• An Activity Implementation Performance Report must be submitted to the MOF and MIRB every 3 months
• The MOF reserves the right to withdraw its approval if it is found that the Relief Fund is not adhering to the stipulated conditions
• A separate bank account has to be opened for the establishment of the Relief Fund
• The appropriate actions must be taken to dissolve the Relief Fund upon the expiry of the approval period granted by the MOF as stipulated under Item 6.1 of the Guidelines
6 Others
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
4© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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Tai Lai KokExecutive Director –Head of Tax and Head of Corporate [email protected]+603 7721 7020
Long Yen PingExecutive Director –Head of Global Mobility [email protected]+603 7721 7018
Ng Sue LynnExecutive Director – Head of Indirect [email protected]+603 7721 7271
Soh Lian SengExecutive Director –Head of Tax Risk [email protected]+603 7721 7019
Bob KeeExecutive Director – Head of Transfer [email protected]+603 7721 7029
Kuching & Miri OfficesRegina LauExecutive Director – Kuching [email protected]+6082 268 308 (ext. 2188)
Penang OfficeEvelyn Lee Executive Director – Penang [email protected]+604 238 2288 (ext. 312)
Kota Kinabalu OfficeTitus TseuExecutive Director – Kota Kinabalu [email protected]+6088 363 020 (ext. 2822)
Johor Bahru OfficeNg Fie LihExecutive Director – Johor Bahru [email protected]+607 266 2213 (ext. 2514)
Petaling Jaya Office
Outstation Offices
Nicholas CristExecutive Director – Corporate [email protected]+ 603 7721 7022
Dato’ Leanne KohExecutive Director – Corporate [email protected]+603 7721 7026
Neoh Beng GuanExecutive Director – Corporate [email protected]+ 603 7721 7025
Ong Guan HengExecutive Director – Corporate Tax [email protected]+ 603 7721 7027
Chang Mei SeenExecutive Director – Transfer [email protected]+ 603 7721 7028
Ivan Goh Executive Director – Transfer [email protected]+ 603 7721 7012
Contact us
Ipoh OfficeCrystal Chuah Yoke ChinTax Manager – Ipoh [email protected]+605 253 1188 (ext. 320)
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
5© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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Tax Whiz 2020 | 12 May 2020
© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Petaling Jaya
Level 10, KPMG Tower, 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, SelangorTel: +603 7721 3388Fax: +603 7721 3399Email: [email protected]
Penang
Level 18, Hunza Tower, 163E, Jalan Kelawei, 10250 PenangTel: +604 238 2288Fax: +604 238 2222Email: [email protected]
Kuching
Level 2, Lee Onn Building, Jalan Lapangan Terbang, 93250 Kuching, SarawakTel: +6082 268 308Fax: +6082 530 669 Email: [email protected]
Kota Kinabalu
Lot 3A.01 Level 3A, Plaza Shell, 29, Jalan Tunku Abdul Rahman, 88000 Kota Kinabalu, SabahTel: +6088 363 020Fax: +6088 363 022Email: [email protected]
Johor Bahru
Level 3, CIMB Leadership Academy, No. 3, Jalan Medini Utara 1, Medini Iskandar, 79200 Iskandar Puteri, JohorTel: +607 266 2213Fax: +607 266 2214Email: [email protected]
Ipoh
Level 17, Ipoh Tower, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, PerakTel: +605 253 1188Fax: +605 255 8818Email: [email protected]
Miri
1st Floor, Lot 2045, Jalan MS 1/2,Marina Square, Marina Parkcity,98000 Miri, SarawakTel: +6085 321 912Fax: +6085 321 962 Email: [email protected]
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