The Inland Revenue Board of Malaysia (IRBM) has issued their responses dated 16 February 2023 to CTIM members’ issues dated 18 January 2023 on the following: -
Deduction for Expenses in relation to the Cost of Detection Test of Covid-19 for Employees [P.U. (A) 404/2021 as amended by P.U. (A) 291/2022]
Qualifying Plant Allowances for Computers and Information Technology Equipment, and Cost of Provision of Computer Software [P.U. (A) 187/1998 and P.U. (A) 272/1999]
Income Tax (Deduction For Incorporation Expenses) Rules 2003 [P.U. (A) 475/2003] as amended by P.U. (A) 472/2005
Amended Guidelines On Tax Deduction Of Secretarial Fees And Tax Filing Fees From YA 2022 Onwards dated 17 August 2022
This article will see IRBM's response regarding item 4 on the Amended Guidelines On Tax Deduction Of Secretarial Fees And Tax Filing Fees From YA 2022 Onwards, dated 17 August 2022.
Background
The IRB has released revised guidelines on tax deductions for secretarial and tax filing fees, which can be found on its website and are dated 17 August 2022.
The new guidelines, titled "Pindaan Garis Panduan Potongan Bagi Perbelanjaan Berhubung Dengan Yuran Kesetiausahaan Dan Yuran Pemfailan Cukai Mulai Tahun Taksiran 2022," is written in Bahasa Malaysia and consist of 11 pages.
They replace the previous guidelines published on 11 May 2021.
If you would like more information on this topic, please refer to the article "Tax Deduction of Secretarial Fees and Tax Filing Fees" at https://www.ccs-co.com/post/tax-deduction-of-secretarial-fees-and-tax-filing-fees.
Para 4.4 of the Amended Guidelines
CTIM Comments:
a. According to Para 4.3 of the Amended Guidelines, the expenditure relating to secretarial fees and tax filing fees incurred in the basis period for YA 2020 and 2021 but not yet claimed are only allowed to be claimed as a deduction when the said expenditure has been paid in YA 2022 or the following YA.
To be consistent with Para 4.3, Para 4.4 should be as follows:
“Perbelanjaan yang dilakukan sebelum tempoh asas bagi TT 2020 dan 2021 [delete "dan 2021"] yang masih belum dituntut lagi adalah tidak dibenarkan dituntut mulai 1 Januari 2022”.
b. According to para 4.4, the expenditure incurred before the basis period for YA 2020 and 2021 that are still unclaimed are not allowed to be claimed from 1 January 2022.
Does it mean that a company with a financial year ended 28 February 2022 can claim a deduction of such expenditure incurred in YA 2018 or 2019 as long as the payment is made before 1 January 2022?
Feedback from IRBM:
a. IRBM acknowledges, and appropriate amendments will be made accordingly.
b. Based on the explanation provided in paragraph 4.4, expenses incurred by companies during the basis period for the year of assessment 2018 or 2019 and with the accounting period ending on 28 February 2022 can be allowed as a deduction if payment was made before 1 January 2022.
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