TAXATION
OBJECTIVE
To equip candidates with the knowledge and understanding of the
basic concepts, principles and current tax practices in Malaysia as well
as the ability to solve practical problems and to be familiar with aspects
of other relevant legislation.
INTRODUCTION
This paper is designed to develop an understanding among candidates of the
concepts and principles of personal, business and corporate income
taxation, taxation of specialised entities, withholding taxes, etc.
Besides these, legislation relating to real property gains tax and
investment incentives will also be covered.
Candidates are expected to display an in-depth understanding of the impact
of all major taxes on the transactions of individuals, companies and
special undertakings and be able to identify, discuss and advice on the
tax issues in a particular situation as well as planning opportunities to
minimise potential tax liabilities.
LEARNING OUTCOMES
Upon successfully completing the examination, candidates at the minimum
should be able to:
|
● |
Explain how the
Malaysian Tax System operates. |
|
● |
Determine the
taxability of receipts and deductibility of expenses in accordance with the
tax legislation. |
|
● |
Prepare the
computation of tax liability for individuals, companies, trusts,
partnerships, estates, clubs, co-operative societies and other specialised
businesses. |
|
● |
Explain the
major tax incentives available to investors. |
|
● |
Prepare
computations of and advice individuals and companies on issues relating to
real property gains tax as a result of the disposal of chargeable assets. |
|
● |
Explain the
application of exemptions and reliefs and provide advice on minimising or
deferring tax liabilities. |
SYLLABUS WEIGHTAGE
|
Syllabus Content Area |
Weighting |
General
Introduction
Principles of Taxation |
15% |
Personal
Taxation
Deceased persons, Estate and Trust Bodies
Partnerships |
20% |
Business /
Corporate Taxation
Relief on capital expenditure |
25% |
Investment
Incentives
Withholding Taxes
Indirect Taxes (Sales Tax and Service Tax)
Cross Border Activities |
15% |
Specialised
Industries
Real Property Gains Tax
Tax Planning & Avoidance |
25% |
|
Total |
100% |
EXAMINATION FORMAT
A 3-hour written paper comprising 5 to 6 compulsory questions.
SYLLABUS CONTENT
|
NO |
CONTENT |
LEVEL OF KNOWLEDGE |
|
A |
GENERAL INTRODUCTION |
|
|
1 |
|
An Introduction to the Malaysian Tax System |
|
- |
Objectives of
taxation |
|
- |
Direct and
Indirect taxes |
|
- |
Basis of charge/
what is taxable/ who is taxable |
|
- |
Basis period/
Basis year/ Year of assessment |
|
- |
Tax rates |
|
A |
|
2 |
|
Tax Administration – Assessment and Collection |
|
- |
Organisational
structure |
|
- |
Power and
authority of the Director General of the Inland Revenue Board |
|
- |
Filing of tax
returns and collection of taxes |
|
- |
Self- assessment
system |
|
- |
Appeals |
|
- |
Responsibility
of taxpayers and employers |
|
- |
Tax audits and
tax investigations |
|
A |
|
3 |
|
Basis of Assessment – Commencement, Cessation and Change of Accounting Dates |
|
- |
Basis periods |
|
- |
Commencement and
cessation of operations |
|
- |
Change of
accounting dates |
|
A |
|
B |
|
PRINCIPLES OF TAXATION |
|
- |
Distinction
between trade and non-trade activities |
|
- |
Distinction
between revenue and capital receipts and its assessability. |
|
- |
Distinction
between revenue and capital expenditure and its deductibility. |
|
- |
Format of
arriving at chargeable income |
|
A |
|
C |
PERSONAL TAXATION |
|
|
1 |
|
Scope of charge and residence status |
|
- |
Scope of charge |
|
- |
Importance and
determination of residence status |
|
A |
|
2 |
|
Employment Income |
|
- |
Definition of
employment / Derivation |
|
- |
Distinction
between employment and profession |
|
- |
Gross employment
income |
|
- |
Treatment of
benefits |
|
- |
Adjusted income |
|
- |
Basis Period |
|
- |
Exemptions |
|
A |
|
3 |
Non-Business Sources of Income
Dividend, interest, discounts, rent, premiums, royalty and other income
sources |
|
- |
Derivation |
|
- |
Basis periods |
|
- |
Exemptions |
|
- |
Adjusted income |
|
- |
Statutory income |
|
A |
|
4 |
|
Computation of tax liability |
|
- |
Determination of
aggregate income |
|
- |
Determination of
total income |
|
- |
Personal reliefs |
|
- |
Determination of
chargeable income |
|
- |
Tax rates |
|
- |
Rebates |
|
- |
Determination of
income tax payable/repayable |
|
A |
|
D |
|
BUSINESS/ CORPORATE TAXATION |
|
- |
Business source |
|
- |
Adjusted income |
|
- |
Statutory income |
|
- |
Calculation of
chargeable income |
|
- |
Tax rates |
|
- |
Imputation
system for corporations |
|
A |
|
E |
RELIEF ON CAPITAL EXPENDITURE |
|
|
1 |
|
Capital Allowance on Plant, Machinery and Industrial Buildings |
|
- |
Definition of
Plant, Machinery and Industrial buildings |
|
- |
Qualifying
expenditure |
|
- |
Eligibility for
capital allowances |
|
- |
Date when the
expenditure is incurred |
|
- |
Types of
allowances |
|
- |
Residual
expenditure |
|
- |
Plant and
machinery bought on hire purchase |
|
- |
Disposals |
|
- |
Controlled
transfers |
|
B |
|
2 |
|
Agriculture/ Forest Allowances |
|
- |
Qualifying
agricultural expenditure |
|
- |
Qualifying
forest expenditure |
|
- |
Computation of
allowances |
|
- |
Disposals |
|
B |
|
3 |
|
Mining/ Prospecting Expenditures |
|
- |
Qualifying
expenditure |
|
- |
Determination of
allowances |
|
- |
Disposals/
recoveries |
|
B |
|
F |
INVESTMENT INCENTIVES
Incentives under Promotion of Investments Act 1986 |
|
- |
Pioneer status |
|
- |
Investment Tax
Allowance |
|
- |
Export
incentives |
|
- |
Infrastructure
Allowance |
|
- |
Double
Deductions |
|
- |
Other incentives |
|
B |
|
|
|
Incentives under Income Tax Act 1967 |
|
- |
Reinvestment
Allowance |
|
- |
Double
Deductions |
|
- |
Approved Service
Projects |
|
- |
Other special
deductions including acquisition of proprietary rights and acquisition of a
foreign company |
|
- |
Other incentives
/ exemptions (including operational headquarters, regional distribution
centres and regional procurement centres) |
|
|
|
|
|
Labuan Offshore International Financial Centre |
|
- |
Trading and
non-trading activities |
|
- |
Tax rates |
|
- |
Exemptions |
|
|
|
G |
|
WITHHOLDING TAXES |
|
- |
Types of income |
|
- |
Derivation |
|
- |
Exemptions |
|
- |
Rate of tax |
|
- |
Penalties for
non-compliance |
|
B |
|
H |
|
INDIRECT TAXES (SALES TAX AND SERVICE TAX) |
|
- |
Scope of charge |
|
- |
Licensing
requirements |
|
- |
Rate of tax |
|
- |
Filing of
returns |
|
- |
Penalties |
|
B |
|
I |
|
CROSS BORDER ACTIVITIES |
|
- |
Double taxation
agreements i.e. main articles in such agreements |
|
- |
Meaning of
Permanent Establishment |
|
- |
Taxation of
employees and exemptions |
|
- |
Withholding
taxes |
|
- |
Trading in/ with
Malaysia |
|
- |
Double tax
relief |
|
B |
|
J |
|
PARTNERSHIPS |
|
- |
Existence of a
partnership |
|
- |
Calculation of
provisional adjusted income |
|
- |
Divisible income
and adjusted income of partners |
|
- |
Changes in
partnership accounting dates |
|
B |
|
K |
|
DECEASED PERSONS, ESTATE AND TRUST BODIES |
|
- |
Basis periods |
|
- |
Computation of
chargeable income of a deceased person ( or an estate under administration) |
|
- |
Types of trusts |
|
- |
Taxation of
trust bodies |
|
- |
Computation of
chargeable income |
|
- |
Tax rates |
|
B |
|
L |
|
SPECIALISED INDUSTRIES |
|
- |
Basis periods |
|
- |
Calculation of
chargeable income |
|
- |
Calculation of
income tax payable |
|
- |
Exemptions |
[This
includes clubs, trade associations, co-operative societies, insurance, sea
and air transport, banking, leasing, unit trusts and investment holding
activities] |
B |
|
M |
|
REAL PROPERTY GAINS TAX |
|
- |
Basic principles |
|
- |
Definition of
real property |
|
- |
Determination of
acquisition and disposal price and date of disposal |
|
- |
Chargeable gain |
|
- |
Allowable loss |
|
- |
Circumstances
where disposal price equals acquisition price |
|
- |
Exemptions
including inter-company transfers |
|
- |
Shares in a real
property company (RPC) |
|
- |
Acquisition
price of shares in a RPC |
|
- |
Returns and
Assessment |
|
B |
|
N |
|
TAX PLANNING & AVOIDANCE |
|
- |
Employment
versus Self- employment |
|
- |
Remuneration
packages |
|
- |
Corporate
structure and dividend flows |
|
- |
Disposal of
business operations and restructuring of activities |
|
- |
Transfer of real
properties |
|
- |
Transfer pricing
issues |
|
- |
Tax avoidance |
|
- |
Anti-avoidance
provisions |
|
B |
TEXTS AND REFERENCES
Recommended Text(s)
1. Veerinderjeet Singh, Malaysian Taxation: Administrative and
Technical Aspects, Malaysia: Pearson
2. Malaysian Master Tax Guide, CCH
3. Choong Kwai Fatt, Malaysian Taxation, Principles and Practice,
Malaysia: Infoworld
4. Choong Kwai Fatt, Advanced Malaysian Taxation: Principles and
Practice, Malaysia: Infoworld
Legislation, Regulations and Rulings
1. Income Tax Act 1967
2. Real Property Gains Tax Act 1976
3. Promotion of Investments Act 1986
4. Labuan Offshore Business Activities Tax Act 1990
5. Sales Tax Act 1972
6. Service Tax Act 1975
7. Income Tax (Capital Allowance and Charges) Rules 1969
8. Income Tax Leasing Regulations 1986
9. Various orders/rules made under the Income Tax Act 1967
10. Double Taxation Agreements
11. Public Rulings and Guidelines issued by the Inland Revenue Board
Additional References
|
1. |
Faridah Ahmad,
Malaysian Tax Workbook, CCH. |
|
2. |
Veerinderjeet
Singh & Chow CheeYen, Malaysian Taxation Revision & Practice Guide, Pearson
Prentice Hall |
|
3. |
Alan Yeo Miow
Cheng, Malaysian Taxation, PAAC |
|
4. |
AlanYeo Miow
Cheng, Examination Kit, Malaysian Taxation, YSB Management Sdn Bhd |
|
5. |
All relevant
journals published by the Malaysian professional bodies. |
* Candidates are
to refer to the latest edition of texts and materials.
|
Note :
Legislation
Questions involving knowledge of legislation will be based on Malaysian
legislation and candidates are expected to have knowledge of any current
changes in legislation. However, no questions on new legislation will be
set until at least six (6) months have elapsed since the last day of the
month in which Royal Assent was given to the new legislation or from the
time the particular order is gazetted. |
|
