Day: September 5, 2023

Following the issuance of the Revised Code of Ethics for Tax Agents by the Malaysian Inland Revenue Board (HASiL) on January 1, 2023, HASiL has introduced the ‘Akuan Bebas Rasuah dan Pematuhan Kod Etika Ejen Cukai dibawah Subseksyen 153(3), ACP 1967 (Declaration)‘.

We believe some of the tax agents who have just obtained or have just renewed their S.153(3) tax agent licenses just like us, have received a declaration form from HASiL to complete and sign.

It is noted that the declaration is in line with HASiL’s Code of Ethics for Tax Agents (Revised 1/2023) and is part of HASiL’s efforts to reduce the risk of bribery and abuse, as well as part of HASiL’s implementation of additional controls and commitments to prevent bribery and abuse in every workflow.

On June 9, 2023, the Chartered Tax Institute Of Malaysia submitted to HASiL feedback from the CTIM Public Practice Committee on the Return and the Code of Ethics mentioned above.

On June 13, 2023, HASiL provided a written response

Introduction of Anti-Corruption Measures for Tax Agents

For your information, the introduction of the Anti-Corruption Declaration and Compliance with the Tax Agent’s Code of Ethics under subsection 153(3) of the Income Tax Act 1967 is a follow-up to the implementation of the MS ISO 37001:2016 Anti-Bribery Management System (ABMS) at the Inland Revenue Board of Malaysia (IRBM).

Implementing the MS ISO 37001:2016 ABMS certification also necessitates amendments to the Tax Agent’s Code of Ethics, as previously communicated to the Chartered Tax Institute of Malaysia (CTIM) through a letter dated January 5, 2023.

To meet the certification requirements, IRBM must demonstrate improvement efforts to reduce the risk of corruption and abuse of position/authority while enhancing controls and commitments.

IRBM undertakes this effort and involves its affiliates to prevent corruption and abuse of position/authority in every work process. In the context of tax agent processing and management carried out by IRBM, affiliates refer to tax agents and members within their firms.

This aligns with introducing a new section under the Malaysian Anti-Corruption Commission (MACC) Act, Section 17A of the MACC Act (Amendment 2018), which came into effect on June 1, 2020.

Section 17A of the MACC Act 2009 establishes the principle of corporate liability, whereby a commercial organisation commits an offence if its employees and/or affiliates commit corruption for the organisation’s benefit.

However, commercial organisations can defend themselves by demonstrating that they have implemented ‘adequate procedures’ to prevent corruption in their operations or business activities.

The Government has also issued Guidelines on Adequate Procedures as required under Section 17A(5) of the MACC Act (Amendment 2018).

These guidelines serve as a reference for commercial organisations on efforts that can be implemented to prevent corruption crimes.

Link to the Guidelines on Adequate Procedures: https://giacc.jpm.gov.my/en/dasar/garis-panduan-tatacara-mencukupi/

Suppose tax agents do not have any anti-corruption procedures/MS ISO 37001:2016 ABMS certification in their organisations. In that case, tax agents must comply with the Tax Agent’s Code of Ethics of the Inland Revenue Board of Malaysia (Amendment 1/2023). This aligns with the adoption of MS ISO 37001:2016 ABMS by IRBM.

For any further inquiries regarding these new provisions, Tax Agents can visit the Official Portal or contact MACC at https://www.sprm.gov.my/

Restrictions on Firm Staff Interactions with IRBM Officers

Paragraph 5.2.2 stipulates that the staff or personnel of the firm are still not allowed to negotiate or deal with IRBM officers except in the taxpayer’s presence, where all negotiation or dealings occur between IRBM officers and the taxpayer directly and not with the staff or personnel of the firm.

References:-

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While we strive to ensure the information presented is current and accurate, we cannot promise the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.

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1. Verify that the information provided is current, accurate, and complete.
2. Seek additional professional opinions, as the scope and extent of each issue may be unique.

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2. 寻求额外的专业意见，因为每个问题的范围和程度，可能是独特的。

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The Inland Revenue Board of Malaysia (HASiL) issued Practise Note No. 1/2023 on 15 June 2023 to explain how foreign exchange (forex) gains and losses are taxed for a chargeable person under the Petroleum (Income Tax) Act 1967 (PITA) based on the rules set out in Public Ruling No. 12/2019 and MFRS 121 Guidelines.

Foreign exchange gains and losses occur when a transaction in a foreign currency is compared to Ringgit Malaysia (RM) on two different dates.

The tax treatment in relation to foreign exchange gains and losses is explained in this Practice Note. Therefore, the tax treatment for Chargeable Persons under the PITA is as follows:

1. For gains or losses from foreign exchange transactions in petroleum operations that are revenue in nature and are realised, such gains or losses shall be subject to tax or allowed as a deduction under subsection 15(1) of the PITA.
2. For gains or losses from foreign exchange transactions in petroleum operations that are revenue in nature and are unrealised, such gains or losses shall neither be subject to tax nor allowed as deduction under subsection 15(1) of the PITA until they are realised.
3. For gains or losses from foreign exchange transactions in petroleum operations that are capital in nature, whether realised or unrealised, such gains or losses shall neither be subject to tax nor allowed as a deduction under subsection 15(1) of the PITA.
4. Foreign exchange gains or losses arising from the translation of the functional currency to the presentation currency in the financial statements for accounting purposes, such gains or losses shall neither be subject to tax nor allowed as a deduction under subsection 15(1) of the PITA.

A transaction in petroleum operations is considered realised when the settlement payment is made.

Suppose the amount is settled in a foreign currency through a foreign currency account. In that case, the currency in question does not need to be physically converted for the transaction to be considered as realised. In other words, realisation does not necessarily occur in a situation of physical exchange.

References:-

Disclaimer:

The articles, templates, and other materials on our website are provided only for your reference.

While we strive to ensure the information presented is current and accurate, we cannot promise the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.

If you intend to use the content of our videos and publications as a reference, we recommend that you take the following steps:

1. Verify that the information provided is current, accurate, and complete.
2. Seek additional professional opinions, as the scope and extent of each issue may be unique.

免责声明：

我们网站上的文章、模板和其他材料只供参考。

虽然我们努力确保所提供的信息是最新和准确的，但我们不能保证网站或其内容，包括任何相关图形的完整性、可靠性、适用性或可用性。因此，您需要承担使用这些信息所带来的风险。

如果你打算使用我们的视频和出版物的内容作为参考，我们建议你采取以下步骤：

1. 核实所提供的信息是最新的、准确的和完整的。
2. 寻求额外的专业意见，因为每个问题的范围和程度，可能是独特的。

Keep in touch with us so that you can receive timely updates

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The Inland Revenue Board of Malaysia (HASiL) has issued Practice Note No. 2/2023 dated 27 June 2023.

This Practice Note explains the following:

• Definitions of political parties and politicians;
• Tax treatment of political parties and politicians

The definitions of political parties and politicians are not explicitly stated in the Income Tax Act 1967 (ITA 1967). However, Section 2 of the Societies Act 1966 defines ‘political party’ as follows:

1. an organisation which, for any purpose or by any means, whether that purpose or means is its primary purpose or otherwise, provides for the organisation to participate, through its candidates, in the elections to the House of Representatives or to the State Legislative Assembly, or the local authorities or provides for it to seek the appointment or election to the Senate of a person proposed or supported by it; or
2. an organisation which, notwithstanding anything contained in its purposes or rules, carries on any activities or pursues any objectives which involve its participation, through its candidates, in the elections to the House of Representatives, or to the State Legislative Assembly, or the local authorities or which involve it seeking the appointment or election to the Senate of a person proposed or supported by it;

The general interpretation of politicians is an individual, whether male or female, who participates in elections or holds positions, including congress members, chancellors, governors, mayors, members of parliament/representatives, ministers, presidents, prime ministers, or senators at the local, state, or federal government levels through involvement in a political party or political activities.

It can also refer to any officer seeking to retain their position through election campaigns.

Tax Treatment for Political Parties

Political parties, as organisations, are subject to taxation under subsection 53A of the Income Tax Act 1967 (ITA 1967). However, under paragraph 2(1) of the Income Tax (Exemption) Order (No. 22) 2002 [P.U.(A) 208/2002], the Minister exempts a political association from paying income tax on all income starting from the Assessment Year 2001.

Nevertheless, political associations must comply with any requirements to submit any statements or accounts or provide any other information under the provisions of the ITA 1967.

Tax Treatment on Funds/Donations Received by Political Parties

Funds/donations received by political parties from within Malaysia or abroad are exempt from taxation based on paragraph 2(1) of the Income Tax (Exemption) Order (No. 22) 2002 [P.U.(A) 208/2002].

Tax Treatment on Funds/Donations Received by Politicians

Tax treatment for politicians is the same as for any other individuals, and taxation is imposed on any income received that is eligible for taxation in a given assessment year based on existing tax laws.

Tax Treatment on Funds/Donations Received from Within Malaysia by Politicians

Based on paragraph 2(1) of the Income Tax (Exemption) Order 2002 [P.U.(A) 208/2002], the exemption is only granted to political parties.

Therefore, this exemption does not cover funds/donations received by politicians and are subject to taxation under paragraph 4(f) of the Income Tax Act 1967 (ITA 1967).

Tax Treatment on Funds/Donations Received from Outside Malaysia by Politicians

Generally, the scope of Malaysian income taxation is based on any income accruing in or derived from Malaysia, including income received in Malaysia from outside Malaysia.

Therefore, funds/donations received by politicians fall within the scope of income taxation in Malaysia and are subject to taxation under paragraph 4(f) of the Income Tax Act 1967 (ITA 1967).

Tax Treatment on Rewards Received by Politicians

Rewards received by politicians from their salaries paid by the Government are exempt from taxation if they hold positions as stated in Schedule 6 of the Income Tax Act 1967 (ITA 1967).

According to Paragraph 30A of Schedule 6 of the ITA 1967, rewards issued by Malaysia and paid to the President or Deputy President of the Senate, Speaker or Deputy Speaker of the House of Representatives, Speaker of the State Legislative Assembly, Senators, Members of the House of Representatives, or Members of the State Legislative Assembly are exempt from tax.

Tax Treatment on Pensions Received by Politicians

Based on Paragraph 30A of Schedule 6 of the Income Tax Act 1967 (ITA 1967), pensions issued by Malaysia and paid to the President or Deputy President of the Senate, Speaker or Deputy Speaker of the House of Representatives, Speaker of the State Legislative Assembly, Senators, Members of the House of Representatives, or Members of the State Legislative Assembly are exempt from tax if they meet the specified conditions, which include reaching the age of 55 or being certified as incapacitated due to illness.

If a politician has been elected as both a Member of Parliament (MP) and a Member of the State Legislative Assembly (ADUN), the exemption applies to only one pension, the highest one received.

Reference:-

Disclaimer:

The articles, templates, and other materials on our website are provided only for your reference.

While we strive to ensure the information presented is current and accurate, we cannot promise the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.

If you intend to use the content of our videos and publications as a reference, we recommend that you take the following steps:

1. Verify that the information provided is current, accurate, and complete.
2. Seek additional professional opinions, as the scope and extent of each issue may be unique.

免责声明：

我们网站上的文章、模板和其他材料只供参考。

虽然我们努力确保所提供的信息是最新和准确的，但我们不能保证网站或其内容，包括任何相关图形的完整性、可靠性、适用性或可用性。因此，您需要承担使用这些信息所带来的风险。

如果你打算使用我们的视频和出版物的内容作为参考，我们建议你采取以下步骤：

1. 核实所提供的信息是最新的、准确的和完整的。
2. 寻求额外的专业意见，因为每个问题的范围和程度，可能是独特的。

Keep in touch with us so that you can receive timely updates

请与我们保持联系，以获得即时更新。

1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

• https://www.facebook.com/YourHRAdvisory/?ref=pages_you_manage
• https://www.facebook.com/YourAuditor/?ref=pages_you_manage

4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

6. LinkedIn ✍ https://www.linkedin.com/company/74734209/admin/

7. Threads ✍ https://www.threads.net/@ccs_your_auditor

8. 小红书 ID ✍ 2855859831