Petronas Chemicals IPO RM5.05 launched today

Following the first of two series IPO exercises, in which Malaysia Marine And Heavy Engineering Berhad get listed with an overwhelming premium of RM0.71 on the close of last Friday, the second IPO series that is, Petronas Chemicals Group launched its IPO today with an offer price of RM5.05 per share. This IPO will be closed at 5:00pm on 9 November 2010, Tuesday.

Extract from Bursa Malaysia website:

THE INITIAL PUBLIC OFFERING (“IPO” OR “OFFERING”) OF UP TO 2,480 MILLION ORDINARY SHARES OF RM0.10 EACH IN PETRONAS CHEMICALS GROUP BERHAD (“PCG”) (“SHARES”), IN CONJUNCTION WITH THE LISTING OF AND QUOTATION FOR 8,000 MILLION SHARES ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD COMPRISING:

(I) OFFER FOR SALE OF UP TO 1,780 MILLION EXISTING SHARES (“OFFER SHARES”) COMPRISING:

• INSTITUTIONAL OFFERING OF UP TO 1,486.98 MILLION OFFER SHARES TO MALAYSIAN AND FOREIGN INSTITUTIONAL AND SELECTED INVESTORS INCLUDING BUMIPUTERA INVESTORS APPROVED BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY AT THE INSTITUTIONAL PRICE (OTHER THAN CORNERSTONE INVESTORS) TO BE DETERMINED BY WAY OF BOOKBUILDING (“INSTITUTIONAL PRICE”);

• RETAIL OFFERING OF 293.02 MILLION OFFER SHARES TO THE MALAYSIAN PUBLIC, ELIGIBLE DIRECTORS OF PCG AND PETROLIAM NASIONAL BERHAD (“PETRONAS”), ELIGIBLE EMPLOYEES OF PCG AND ITS SUBSIDIARIES (“PCG GROUP”), PETRONAS AND SELECTED SUBSIDIARIES OF PETRONAS, ELIGIBLE CUSTOMERS AND OTHERS WHO HAVE CONTRIBUTED TO THE SUCCESS OF PCG GROUP AT THE RETAIL PRICE OF RM5.05 PER SHARE (“RETAIL PRICE”), PAYABLE IN FULL UPON APPLICATION AND SUBJECT TO REFUND OF THE DIFFERENCE, IN THE EVENT THAT THE FINAL RETAIL PRICE IS LESS THAN THE RETAIL PRICE; AND

(II) PUBLIC ISSUE OF 700 MILLION NEW SHARES TO MALAYSIAN AND FOREIGN INSTITUTIONAL AND SELECTED INVESTORS AT THE INSTITUTIONAL PRICE,

SUBJECT TO THE CLAWBACK AND REALLOCATION PROVISIONS AND OVER-ALLOTMENT OPTION (AS DEFINED HEREIN). THE FINAL RETAIL PRICE WILL BE EQUAL TO THE LOWER OF (I) THE RETAIL PRICE; AND (II) 97% OF THE INSTITUTIONAL PRICE, SUBJECT TO ROUNDING TO THE NEAREST SEN.

For full IPO prospectus, visit Bursa Malaysia website.

Budget 2011: Cheaper imported clothes, handbags, footwear, jewellery, perfumes, toys and 300 goods more

In order to boost the local tourism industry and to make Malaysia as a shopping haven for branded goods at competitive prices, the government proposes to abolish import duty range from 5% to 30% on about 300 goods favoured by tourists and locals, with immediate effect from Oct 15, 2010.

Visit luxury shops like Louis Vuitton (LV), PRADA or Gucci to check out their prices. However, the prices may not immediately effected for such import duty abolishment as there will need a lead time from import to selling on the shelves to you. It also depends how much the retailers want to keep the profits to themselves and reduce the prices to you as the buyers.

What are the 300 goods items list to which import duty will be abolished?

Although the Budget Appendix stated there is a detailed list of those products as in Appendix A, but it was not found in the Budget Appendix nor the Budget Speech itself. The detailed list is also not published in the government official websites, e.g. www.customs.gov.my or www.treasury.gov.my.

Update on detailed list of abolished products:

Royal Malaysian Customs feedback to us as follows:-

You may get a copy of the Embargo at the Percetakan Nasional Berhad at the address stated below:-

Percetakan Nasional Berhad

Jalan Chan Sow Lin

50554 Kuala Lumpur

Tel : 03-92366888

Visit our  Malaysia Budget 2011: Summary and Highlights – Tax Changes and Proposals

Company Registration in Malaysia

The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM) is a statutory body which regulates companies and businesses. SSM, which came into operation on 16 April 2002, is a statutory body formed as a result of a merger between the Registrar of Companies (ROC) and the Registrar of Businesses (ROB) in Malaysia.

The main activity of SSM is to serve as an agency to incorporate companies and register businesses as well as to provide company and business information to the public. As the leading authority for the improvement of corporate governance, SSM fulfils its function to ensure compliance with business registration and corporate legislation through comprehensive enforcement and monitoring activities to sustain positive developments in the corporate and business sectors of the Nation.

SSM Registration Services

The SSM Registration Services Division is responsible for establishing a structured and effective companies and businesses registration process in addition to handling registration matters in line with the provision of laws and guidelines that it administrates. Concurrently, this division also plays a role in ensuring that the updating of corporate information is done accurately and according to the prescribed Client Service Charter.

SSM Registration Services Division is further divided into sections:

A. Company Registration Section

1. Name Search Companies
2. Incorporation of Companies
3. General Documents
4. Registration and satisfaction of Charges

B. Business Registration Section

1. Name Search Business
2. Registration of business - Registering sole proprietorships and partnerships.
3. Renewal and Change of Business  - Renewal of business registration and Registering change in business details.
4. Termination of Business - Registering the termination of a business

C. Insolvency Section

1. Handles matters relating to the winding-up of companies and strike off of company names of the registrar and asset management of defunct companies.
2. To keep records of companies those are in the process of winding up, either by a court order or voluntary.
   
3. To regulate the compliance of Companies Act 1965 relating to winding up of companies and dissolution of companies.
4. Strike off company name pursuant to Section 308 Companies Act 1965.
   
   The Registrar has powers to strike off companies if he has reasonable cause to believe that a company is not carrying on business or is not in operation.
   
   To process applications to strike off company names off the register.
5. Asset Management.
   To register and record the list of assets vested in the Registrar of Companies under section 310 of the Companies Act 1965.

D. Registration under the Trust Companies Act 1949

1. To coordinate the registration of trust companies.
2. To process applications to register trust companies
3. To coordinate the registration of trust companies.
4. To coordinate interviews for the appointment of directors/Chief Executive Officers of trust companies.
5. To prepare interview reports for the approval of directors and Chief Executive Officers.

E. Corporate Administration Management Section

1. Coordinates and monitors applications for the incorporation of Companies Limited by Guarantee (CLBG) under the Companies Act 1965 by getting the approval of the Minister.
2. Coordination of corporate applications

For more info on Company Registration & Formation in Malaysia:

Click here www.nbc.com.my/company-formations-registration

Budget 2011: Cheaper imported clothes, handbags, footwear, jewellery, perfumes, toys and 300 goods more

In order to boost the local tourism industry and to make Malaysia as a shopping haven for branded goods at competitive prices, the government proposes to abolish import duty range from 5% to 20% on about 300 goods favoured by tourists and locals, with immediate effect from Oct 15, 2010.

Visit luxury shops like Louis Vuitton (LV), PRADA or Gucci to check out their prices. However, the prices may not immediately effected for such import duty abolishment as there will need a lead time from import to selling on the shelves to you.

Malaysia Budget 2011 Summary and Highlights

“ 1Malaysia, Generating Transformation ”

Summary & Highlights - Tax Changes & Proposals

Visit Updated and Original Source for Full Summary & Highlights - Tax Changes and Proposals (http://www.nbc.com.my/)

Existing EPF relief of maximum RM6,000 is extended to include employees’ contributions to Private Pension Fund (PPF) set up by the government. Employers are allowed for tax deductions for contributions made to the Private Pension Fund. In other word, apart from mandatory contribution to EPF, employees and employers (including self-employed) can now opt to make additional contributions to Private Pension Fund set up by the government.

This benefits the lower income group as most of the medium to high income group may already claiming up to the maximum relief of RM6,000 as the relief of RM6,000 is also include the life insurance premium, apart from employees’ own EFP contributions. For employers, this may open up an additional tax planning for tax deductions on such contributions to PPF while rewarding the employees or better structuring the staff remuneration package, as there is a cap allowed for tax deductions in respect of employers’ EPF contributions for staff.

Current individual tax relief of up to RM5,000 for parents’ medical expenses be extended to cover expenses to care for parents. These expenses are for parents who suffer from diseases or with physical or mental disabilities and who need regular treatment certified by a qualified medical practitioner. This include treatment and care at home, day care centres or home care centres. Currently the tax relief of up to RM5,000 medical expenses for parents are for treatment in clinics and hospitals, treatment in nursing homes and dental treatment (exclude cosmetic dental treatment).

First-time Malaysian citizen house buyers will be given stamp duty exemption of 50% on (1) instruments of transfer (i.e sale and purchase agreement) and (2) loan agreement on a residential house price not exceeding RM350,000 during 1 Jan 2011 to 31 Dec 2012. Residential property include a terrace house, condominium, apartment or flat. Question here is – would serviced apartments erected on commercial land be scope out?

Service tax rate will be increased from 5% to 6% with effect from 1 Jan 2011. This will impact quite a number of service industry as well as individual consumptions. This may be a temporary measure to increase government revenue while pending the implementation of Goods and Services Tax (GST).

ASTRO monthly subscription fee will be increased with a service tax of 6% with effect from 1 Jan 2011. Service tax of 6% will be imposed on paid satellite broadcasting services in which this service was not subject to service tax previously.

The Budget is more focusing on a macro economy and it appears not too many announcements or tax proposals that are affecting the individuals and companies directly.

No new taxes were introduced. No new policies announced on tackling the speculative buying of real properties, in particular the loan to value cap ratio at 70% or 80%.

No tax reductions for individuals and corporate. There was no announcement on withholding tax on dividend income from Real Estate Investment Trust (REIT).

Nothing was announced on bonus for civil servants.

This Budget is very plain and there was not many tax changes or proposals.

Download the Malaysia Budget 2011 Speech and Appendices :

• Budget 2011 Speech
• Budget 2011 Appendices
• Economic Report 2010/2011

Malaysia Budget 2011 Summary and Highlights

“ 1Malaysia, Generating Transformation ”


Summary & Highlights - Tax Changes & Proposals

Visit Updated and Original Source for Full Summary & Highlights - Tax Changes and Proposals (http://www.nbc.com.my/)

Existing EPF relief of maximum RM6,000 is extended to include employees’ contributions to Private Pension Fund (PPF) set up by the government. Employers are allowed for tax deductions for contributions made to the Private Pension Fund. In other word, apart from mandatory contribution to EPF, employees and employers (including self-employed) can now opt to make additional contributions to Private Pension Fund set up by the government.

This benefits the lower income group as most of the medium to high income group may already claiming up to the maximum relief of RM6,000 as the relief of RM6,000 is also include the life insurance premium, apart from employees’ own EFP contributions. For employers, this may open up an additional tax planning for tax deductions on such contributions to PPF while rewarding the employees or better structuring the staff remuneration package, as there is a cap allowed for tax deductions in respect of employers’ EPF contributions for staff.

Current individual tax relief of up to RM5,000 for parents’ medical expenses be extended to cover expenses to care for parents. These expenses are for parents who suffer from diseases or with physical or mental disabilities and who need regular treatment certified by a qualified medical practitioner. This include treatment and care at home, day care centres or home care centres. Currently the tax relief of up to RM5,000 medical expenses for parents are for treatment in clinics and hospitals, treatment in nursing homes and dental treatment (exclude cosmetic dental treatment).

First-time Malaysian citizen house buyers will be given stamp duty exemption of 50% on (1) instruments of transfer (i.e sale and purchase agreement) and (2) loan agreement on a residential house price not exceeding RM350,000 during 1 Jan 2011 to 31 Dec 2012. Residential property include a terrace house, condominium, apartment or flat. Question here is – would serviced apartments erected on commercial land be scope out?

Service tax rate will be increased from 5% to 6% with effect from 1 Jan 2011. This will impact quite a number of service industry as well as individual consumptions. This may be a temporary measure to increase government revenue while pending the implementation of Goods and Services Tax (GST).
ASTRO monthly subscription fee will be increased with a service tax of 6% with effect from 1 Jan 2011. Service tax of 6% will be imposed on paid satellite broadcasting services in which this service was not subject to service tax previously.

The Budget is more focusing on a macro economy and it appears not too many announcements or tax proposals that are affecting the individuals and companies directly.

No new taxes were introduced. No new policies announced on tackling the speculative buying of real properties, in particular the loan to value cap ratio at 70% or 80%.

No tax reductions for individuals and corporate. There was no announcement on withholding tax on dividend income from Real Estate Investment Trust (REIT).

Nothing was announced on bonus for civil servants.

This Budget is very plain and there was not many tax changes or proposals.

Download the Malaysia Budget 2011 Speech and Appendices :
Budget 2011 Speech

• Budget 2011 Appendices
• Economic Report 2010/2011

Post Budget 2011: Government to take over PLUS Expressway business

Following the Malaysian government announced in Budget 2011 that the PLUS toll rate would not be increased for the next five years from today onwards.

Today, UEM Group Berhad and Employees Provident Fund Board have jointly offer to acquire and take over the entire business of PLUS Expressway Berhad for a total consideration of RM23 billion, representing an offer price of RM4.60 per share of PLUS.

Last trade price before suspended was RM4.46, a mere premium of RM0.14 or 3.1%. This little premium may not good enough to attract a good acceptance from the minority shareholders as the minority shareholders may prefer to keep PLUS in their hands and earning a reasonably good and stable return, given that PLUS is viewed as a mature, cashflow generating asset with an attractive risk-return profile.

Malaysia Budget 2011 Summary and Highlights

“ 1Malaysia, Generating Transformation ”


Summary & Highlights - Tax Changes & Proposals

Visit Updated and Original Source for Full Summary & Highlights - Tax Changes and Proposals (http://www.nbc.com.my/)

Existing EPF relief of maximum RM6,000 is extended to include employees’ contributions to Private Pension Fund (PPF) set up by the government. Employers are allowed for tax deductions for contributions made to the Private Pension Fund. In other word, apart from mandatory contribution to EPF, employees and employers (including self-employed) can now opt to make additional contributions to Private Pension Fund set up by the government.

This benefits the lower income group as most of the medium to high income group may already claiming up to the maximum relief of RM6,000 as the relief of RM6,000 is also include the life insurance premium, apart from employees’ own EFP contributions. For employers, this may open up an additional tax planning for tax deductions on such contributions to PPF while rewarding the employees or better structuring the staff remuneration package, as there is a cap allowed for tax deductions in respect of employers’ EPF contributions for staff.

Current individual tax relief of up to RM5,000 for parents’ medical expenses be extended to cover expenses to care for parents. These expenses are for parents who suffer from diseases or with physical or mental disabilities and who need regular treatment certified by a qualified medical practitioner. This include treatment and care at home, day care centres or home care centres. Currently the tax relief of up to RM5,000 medical expenses for parents are for treatment in clinics and hospitals, treatment in nursing homes and dental treatment (exclude cosmetic dental treatment).

First-time Malaysian citizen house buyers will be given stamp duty exemption of 50% on (1) instruments of transfer (i.e sale and purchase agreement) and (2) loan agreement on a residential house price not exceeding RM350,000 during 1 Jan 2011 to 31 Dec 2012. Residential property include a terrace house, condominium, apartment or flat. Question here is – would serviced apartments erected on commercial land be scope out?

Service tax rate will be increased from 5% to 6% with effect from 1 Jan 2011. This will impact quite a number of service industry as well as individual consumptions. This may be a temporary measure to increase government revenue while pending the implementation of Goods and Services Tax (GST).
ASTRO monthly subscription fee will be increased with a service tax of 6% with effect from 1 Jan 2011. Service tax of 6% will be imposed on paid satellite broadcasting services in which this service was not subject to service tax previously.

The Budget is more focusing on a macro economy and it appears not too many announcements or tax proposals that are affecting the individuals and companies directly.

No new taxes were introduced. No new policies announced on tackling the speculative buying of real properties, in particular the loan to value cap ratio at 70% or 80%.

No tax reductions for individuals and corporate. There was no announcement on withholding tax on dividend income from Real Estate Investment Trust (REIT).

Nothing was announced on bonus for civil servants.

This Budget is very plain and there was not many tax changes or proposals.

Download the Malaysia Budget 2011 Speech and Appendices :
Budget 2011 Speech

• Budget 2011 Appendices
• Economic Report 2010/2011

Malaysia Budget 2011 Summary and Highlights

“ 1Malaysia, Generating Transformation ”


Summary & Highlights - Tax Changes & Proposals

Visit Updated and Original Source for Full Summary & Highlights - Tax Changes and Proposals (http://www.nbc.com.my/)

Existing EPF relief of maximum RM6,000 is extended to include employees’ contributions to Private Pension Fund (PPF) set up by the government. Employers are allowed for tax deductions for contributions made to the Private Pension Fund. In other word, apart from mandatory contribution to EPF, employees and employers (including self-employed) can now opt to make additional contributions to Private Pension Fund set up by the government.

This benefits the lower income group as most of the medium to high income group may already claiming up to the maximum relief of RM6,000 as the relief of RM6,000 is also include the life insurance premium, apart from employees’ own EFP contributions. For employers, this may open up an additional tax planning for tax deductions on such contributions to PPF while rewarding the employees or better structuring the staff remuneration package, as there is a cap allowed for tax deductions in respect of employers’ EPF contributions for staff.

Current individual tax relief of up to RM5,000 for parents’ medical expenses be extended to cover expenses to care for parents. These expenses are for parents who suffer from diseases or with physical or mental disabilities and who need regular treatment certified by a qualified medical practitioner. This include treatment and care at home, day care centres or home care centres. Currently the tax relief of up to RM5,000 medical expenses for parents are for treatment in clinics and hospitals, treatment in nursing homes and dental treatment (exclude cosmetic dental treatment).

First-time Malaysian citizen house buyers will be given stamp duty exemption of 50% on (1) instruments of transfer (i.e sale and purchase agreement) and (2) loan agreement on a residential house price not exceeding RM350,000 during 1 Jan 2011 to 31 Dec 2012. Residential property include a terrace house, condominium, apartment or flat. Question here is – would serviced apartments erected on commercial land be scope out?

Service tax rate will be increased from 5% to 6% with effect from 1 Jan 2011. This will impact quite a number of service industry as well as individual consumptions. This may be a temporary measure to increase government revenue while pending the implementation of Goods and Services Tax (GST).
ASTRO monthly subscription fee will be increased with a service tax of 6% with effect from 1 Jan 2011. Service tax of 6% will be imposed on paid satellite broadcasting services in which this service was not subject to service tax previously.

The Budget is more focusing on a macro economy and it appears not too many announcements or tax proposals that are affecting the individuals and companies directly.

No new taxes were introduced. No new policies announced on tackling the speculative buying of real properties, in particular the loan to value cap ratio at 70% or 80%.

No tax reductions for individuals and corporate. There was no announcement on withholding tax on dividend income from Real Estate Investment Trust (REIT).

Nothing was announced on bonus for civil servants.

This Budget is very plain and there was not many tax changes or proposals.

Download the Malaysia Budget 2011 Speech and Appendices :
Budget 2011 Speech

• Budget 2011 Appendices
• Economic Report 2010/2011

GST Bill seeks parliament second hearing on 11 Oct 2010

Despite receiving heavy oppositions from the public against the proposed Goods and Services Tax (GST), the Government is still decided to table the GST Bill 2009 to seek second hearing in the parliament meeting on 11 Oct 2010, in which the second hearing was postponed from its original schedule in March 2010.

The implementation of GST, a consumption tax based on the value-added concept, is set to go ahead and inevitable, as many other countries in the world have already been implemented GST or VAT equivalents. It is believed that GST would increase Government revenue and help narrow the budget deficit as well as to reduce the reliance on direct income tax revenue.

There will be no amendments to GST Bill 2009, which is to be tabled for debate by the members of parliament in the next few months to pass the law.

The Government will continue to educate the public and business sector before the implementation of GST. The Government promised that they will allow sufficient time to the public and business sector to understand GST. The timeframe could be around 18 months from the enactment of GST Act. Based on this timeframe, GST is set to affect the public community of Malaysia in 2012.

source: nanyang.com.my

Company Name Search with SSM

The first procedure in the registration process of a new limited company (Sdn Bhd or Bhd) in Malaysia is ---> Company Name Search with Suruhanjaya Syarikat Malaysia (SSM). If you intend to change the existing company name, you also need to do the same name search procedure for the proposed new name.

On practical term, you need to submit Form 13A (Request for Availability of Name) to SSM, to determine if the proposed name is available for registration. The result (SSM approval or rejection) of the proposed name will be obtained within one (1) working day. Upon name approval by SSM, the approved name will be reserved for three (3) months, for subsequent submission of incorporation documents. Should SSM reject the proposed name, you may appeal by stating your grounds and reasons why it should not be rejected.

SSM has issued some guidelines for naming a company. Among others the guidelines and requirements are:-

1. Gazetted words or prohibited names by Ministry or SSM. Approvals from the Ministry and SSM are required.
2. Proposed name is similar to government link companies, government slogan and established names or trademarks (eg. Petronas, Vision 2020, Malaysia Boleh, ASTRO) and may cause confusion to public.
3. Undesired or too general names, eg. Ekor Ayam Sdn Bhd, Beautiful Sdn Bhd.
4. At least two (2) proposed company directors’ names and their identity card (IC) or passport numbers are required.

There are more than 880,000 registered local companies in Malaysia. It is saying that, to register a good name is not easy, as most of the good names have been taken up. Just like internet domain names in the world or local front, a good one surely has been registered.

So, before you are submitting the Form 13A and paying for the name search fee to SSM, why not just do a quick name check on the registry of companies of SSM?

Just give us your preferred company name(s) by filling up our simple online name search form above, we can check immediately at the registry of companies online of SSM, to see if there are similar names being registered with SSM, before making formal name application to SSM.

With a quick brief view of registered company names at SSM registry of companies, you are now in clearer view to submit and apply your preferred company name to SSM, in order to avoid using identical existing registered names and minimise the possibility of being rejected. The most important thing is, save your name search fee charged by SSM.

Franchising with OldTown White Coffee

Came to this OldTown White Office advertising lately on franchising with them. Started from the first outlet in 2005, grown up to over 160 outlets in Malaysia and overseas, in mere time span of 5 years.

Many of us may be asking, how to apply for their franchise licence, what are funding requirements, etc.

As stated in their advertising, the minimum financial requirements and application procedures are as follow:-

1. Minimum net worth of assets of RM1 million.
2. Minimum liquidity of RM600,000 (in cash or cash equivalents)
3. Accept individual applications from qualified prospective Franchisees.
4. Individual applications must be submitted for each person who will have an ownership interest in the franchise.
5. Individual applications are also required of corporate applications for each owner with an interest of 10% or more. Additional supporting for creditworthiness, annual reports, etc are required.
6. Franchisees may be invited to attend a Franchise Seminar for a more detailed understanding of the OldTown White Coffee Business Model.

Source: Malaysian Franchise Association

Update: Further google search and found out more information on the franchise requirements (unofficial information) :

Franchise Fees : RM80,000.00
Franchise Term (years) : 5
Royalty : 5%
Marketing / A & P Fund : 3%
Estimated Initial Capital : RM600,000 - RM800,000 

Source: http://www.ifranchisemalaysia.com/

Pendaftaran Syarikat dengan Suruhanjaya Syarikat Malaysia (SSM). Promosi harga paling murah! Hanya RM1,460 sahaja!!!

Mula perniagaan anda dengan sekarang juga. Dan itu hanya begitu MUDAH sekali!

Syarikat and pasukan kami yang berpengalaman pasti dapat membantu anda and keperluan perniagaan anda.

Kami juga menpunyai pengalaman prefesional untuk mendaftar and menubuh syarikat baru anda dengan nama syarikat anda yang diingini.

Kunjungi http://www.nbc.com.my/ssm-pendaftaran-syarikat.html

Follow the Malaysia Budget 2011 on 15 Oct 2010

The 2011 Budget is due to be delivered on 15 October 2010 (Friday, as usual) by Prime Minister Datuk Seri Najib Tun Razak, who is also the Finance Minister.

What we can expect from the Government that may be benefit the private sector and individuals like us, while the Government is in need of finding new sources of tax revenue in cutting the budget deficit and tackle the soaring operating expenditure. The prospect of announcement on the implementation of Goods and Services Tax (GST) is not totally eliminated, given which GST was widely anticipated to be a source of revenue boost for the government.

Let’s recall what were the good news announced in last year’s 2010 Budget. Among others, the maximum tax rate for individuals reduced to 26%, personal relief increased from RM8,000 to RM9,000 from 2010 onwards, tax relief on broadband subscription fees up to RM500 per year from 2010 to 2012 and reinstatement of Real Property Gain Tax (RPGT) at a fixed rate of 5% in respect of disposal of real property within 5 years from the date of acquisition (previously was exempted from 1 April 2007 until 31 December 2009).

More to come on 2011 Budget…

Will GST implementation be announced in Budget 2011?

Many have concerned whether the Malaysia Government will announce the implementation of the Goods and Services Tax (GST) in Budget 2011, which has drawn mixed views.

KPMG tax partner Tan Eng Yew said the platform for GST implementation had been set; people are just waiting for the implementation date, which could be announced any time, not necessarily in the budget.

Affin Investment Bank chief economist Alan Tan said: “While we do not expect a specific date to be mentioned for GST implementation in this budget, we do expect some focus on the rationale for the country’s tax reform.”

An economist said it was hard to predict if the Government would announce the GST implementation in the coming budget but noted it was definitely another area that could boost revenue and help reduce the budget deficit.

The Government gave the assurance that GST is expected to have little impact on inflation. In a study by the Government, prices of certain goods such as shoes and clothing could be actually drop by about 2.7 per cent as the rate under the GST is only 4 percent compared to the 5 per cent and 10 per cent under the goods and sales taxes, respectively. However, services such as recreation, private health care and education would increase by about 2 percent.

To ensure the traders do not profit from the reduction in the costs of goods due to lower GST rates, Domestic Trade and Consumer Affairs Ministry is the midst of drafting the Anti Profiteering Law in counter for this.

Source: The Star Business News, Royal Malaysian Customs

Looking for Malaysia Company Law for details?

Are you looking for official Malaysia Company Law online?

Yes, you may access to Malaysia Companies Act, 1965 which is available online on the website of Companies Commission of Malaysia.

Visit Malaysia Companies Act, 1965.

The FACTS : set up and form a company in Malaysia

How to set up and form a limited company in Malaysia?
What are the requirements?
What are documents needed?
We provide some of the basic facts and information for setting up and forming a limited company in Malaysia.

Visit the FACTS for setting up and forming a company in Malaysia.

Are you ready for GST in Malaysia?

The Government of Malaysia proposed the Goods and Services Tax (GST) in November 2009 and tabled the Goods and Services Tax Bill 2009 for first reading in Parliament in December 2009. Second reading was scheduled in March 2010 but it was postponed as the Government needed more time to gather feedback from the Rakyat and enable the Government to educate the public on the proposed GST as well as to allow businesses more time to prepare themselves for GST implementation.

The impact of GST implementation can be extensive to a business. Additional book-keeping requirements and changes to the treatment of business’s products and services.

To better understand the proposed GST, visit FAQ - Goods and Services Tax in Malaysia.

Real Estate Investment Trust (REIT) in Malaysia

REIT may consider as good as EPF on its tax exemption status, as all the rental, interest and other investment income earned by REIT are exempted from tax, provided that the REIT distributes at least 90% of its total taxable income to its unitholders in a particular year (note that property revaluation gain is not considered as realised income even though it is reported in the income statement, thus it is not taxable and not distributable).

Tax treatment of Unitholders:-

Where 90% or more of the REIT’s total taxable income is distributed, dividends paid by REIT to its Unitholders will be subject to a withholding tax as follows:-

1. 10% withholding tax – all individuals and non-corporate investors such as institutional investors (regardless of whether they are tax resident or not)
2. 25% withholding tax – non-resident company (incorporated body)

The withholding tax will be withheld by REIT before paying out the dividends to unitholders. In other words, unitholders will be receiving dividends, net of withholding tax.

The withholding tax is a final tax. Individuals and non-corporate investors are not required to declare REIT dividend income in their tax filing/returns. As such, you are not allowed to claim tax refund or tax offset in your tax returns, as opposed to other dividend income (provided you are receiving taxable dividend or non single tier dividend from your share investments).

      3.  No withholding tax – tax-resident company investors. REIT dividend will be taxed in their tax computation.

The reduced withholding tax of 10% on individual and non-corporate investors is only available up to 31 Dec 2011. REIT dividends received after 31 Dec 2011 will be taxed at original 15%. It is hope that the reduced withholding tax of 10% will be extended, if not further reduced (as in NIL withholding tax in Singapore) in coming Budget 2011.

Real Property Gain Tax (RPGT) in Malaysia

With effect from 1 January 2010, RPGT of 5% flat will be applicable on gains on disposal of real properties in Malaysia or disposal of shares in real property companies within 5 years from the date of purchase. The scale rates from 5% to 30% depending on year of possession is no longer applicable.
However, RPGT is exempted or no RPGT is levied for disposal of real property or shares in real property companies held for more than 5 years. You are tax free to sell in 6th year onwards.
Some tax exemptions are available for individuals, even though they are disposed of within the first 5 years from the date of purchase:-

1. Disposal of a residential property once in a lifetime by an individual.
   
2. Transfer as gifts between parent and child, husband and wife, grandparent and grandchild (transfer between sibling/brothers or sisters is not applicable); and
   
3. Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater, for each disposal of a property by an individual. Chargeable gain is generally meaning sale proceeds less purchase cost.

	Example:
	Sale proceeds	500,000
	Less: original purchase cost	(300,000)
	Chargeable gain	200,000
	Less: exemption of RM10,000 or 10%	(20,000)
	Taxable amount	180,000
	RPGT tax at 5%	9,000