budge 2016

Loh Boon How, Chartered Accountant

1) Company, LLP, trust body or co-operative society file(Sec 107C(7A)).

a) Estimate or

b) Revised estimate

For each YA by e-filling, wef YA2016 and subsequentYA.

E-filling

B. H. Loh & Associates

2) The employer is a company, the employer’s returnmust be submitted by way of e-filling (Sec 83(1B)).

W.e.f YA 2016

E-filling


A received from services to be rendered / use orenjoyment of property to be used Treated as grossincome for period the sum received,

A refund of income received deducted from thegross income.

Tax in gross income Deductible of expenses

Advance receipt Refund the payment


Basis period for business income

If a tax payer (public entertainer) fails to remit thewithholding tax and a penalty (in respect the serviceperform in Malaysia). (Sec 109A)

1. The tax deduction is not allowed, (Sec 39(1)(q)).

2. The DG may imposed a penalty for an incorrectreturn under Sec 113(2).

Wef 1/1/2016

Single deduction


Interest is due to be paid in any following YA, theperson must make a written claim for deduction ofinterest not later than 12 months from end of basisperiod the amount is due to be paid. (Sec 33(5)

DG may reduce the assessment in respect of theinterest deduction.

Wef YA 2016


Single deduction

Accrued of interest

12 months

due to be paid after 31.12.2017

2014 2015 2016 31.12.2017 1.1.2019


Single deduction

The companies with paid-up capital < or = RM2.5 M,are allowed to claim double deduction for R & Dexpenditures automatically, but not exceedingRM50,000 for each YA. (PU (A) 167/2011)

However companies are still required to submit to IRBfor approval

From YA 2016 – YA 2018.

Double deduction


IBA allowed to a tax payer who owns the building

Industrial Building Allowance

Schedule 3, ITA 1965

Description

37A Licensed private hospital, maternity homeand nursing home

37B Building used for research

37C Building used for warehouse

37E Building used for approved service project

37F Building used for hotelB. H. Loh & Associates

Industrial Building Allowance

Schedule 3, ITA 1965

Description

37G Airport

37H Motor racing circuit

42A Building used for a manufacturing, hotel ortourism business or an approved service project

42B Building used for a school or an educationalinstitution.

• The building used for his business


If part of asset (with significant value) that is replacedwith a new part, the existing / old part is deemed adisposal

For the part of disposal :

1) QE – using discounted value basis / method (DV),

2) Residual expenditure – QE reduced by allowancemade prior to disposal,

The allowance for new part will be calculated basedon normal treatment.

Disposal of part of asset


Old engine dispose Entire New

RM5,000 asset machine

New machine cost CA fully CA fully

QE : RM120,000 RM40,000 claim claimOld new

entire

1.1.2016 1.6.2019 31.12.2020 31.12.2022



YA Description RM

2016 Qualifying Expenditure 120,000

Less : IA (120,000 x 20%) (24,000)

AA (120,000 x 20%) (24,000)

Residual Expenditure 72,000

2017 Less : AA (120,000 x 20%) (24,000)



A) Capital allowance for an entire assets



YA Description RM

2017 Residual Expenditure 48,000

2018 Less : AA (120,000 x 20%) (24,000)


2019 *Less : AA (87,000 x 20%) (17,400)

6,600

2020 Less : AA (the balance of RE) (6,600)

Residual Expenditure Nil


Computation QE after deduction cost of old engine

Cost of old engine reverted at the time of YA 2016from a new machinary cost by discounted value (DV)

40,000 = 33,000

1.054

QE reduced by allowance made prior to disposal,



QE of entire asset at the time 1/1/2016 120,000

#Cost of old engine at the time 1/1/2016 (33,000)

*QE of asset after the disposal of old engine 87,000


YA Description RM

2016 # Qualifying Expenditure (DV) 33,000

Less : IA (33,000 x 20%) (6,600)

AA (33,000 x 20%) (6,600)


2017 Less : AA (33,000 x 20%) (6,600)


B) Capital allowance for a old engine



YA Description RM

2017 Residual Expenditure 13,200

2018 Less : AA (33,000 x 20%) (6,600)


2019 *Old engine disposal value (5,000)

Balancing allowance 1,600



YA Description RM

2019 QE 40,000

Less : IA (40,000 x 20%) (8,000)

AA (40,000 x 20%) (8,000)

Residual expenditure 24,000

2020 Less : AA (40,000 x 20%) (8,000)


C) Capital allowance for the new machine



YA Description RM

2020 Residual expenditure 16,000

2021 Less : AA (40,000 x 20%) (8,000)


2022 Less : AA (40,000 x 20%) (8,000)

Residual expenditure NIL


A resident company incorporate in Malaysia withpaid-up capital not more than RM2.5 M. (Para 19A,Sch 3)

100% CA on small value asset (SVA) :

1. Cost not more than RM1,300,

2. Maximun of RM13,000.

Wef YA 2016


Small value asset

If the taxpayer fails to furnish a tax return (Sec 112) :

(i) Single offence :

1. Fine not less than RM200.00 and not more thanRM20,000,

2. Imprisonment not exceeding 6 months, or both.

Penalties


(ii) Two YAs or more offences :

1. A fine not less than RM1,000 and not more thanRM20,000 or imprisonment not exceeding 6 monthsor both, and

2. Special penalty treble (3 times) amount of taxdetermined on best judgment by DGIR.

Penalties


If a taxpayer who fail to furnish correct particularsrequired by DG in a tax return form is convicted anoffence under Sec 120

Example :

1. Business code

2. ROC number

3. Business address.

Penalties


If the taxpayer failure to furnish correct particulars(Sec 120(1)(h))

An offence

1. Fine not less than RM200 and not more thanRM20,000 or

2. to imprisonment for a term not exceeding 6 monthsor to both.

@ Applicable to LLP, company, trust body and co-operative society

Penalties



Address :

No. 1-3-15, Goldhill Complex,

Tingkat Paya Terubong 1,

11060 Penang.

H/P No. : 016-4893382

Email : [email protected]

Web-site / facebook : bhloh.com.my

Thank you
