/n Deloitte. Tax Espresso 2023 Return Form Filing Program, Gazette Order, Public Rulings, Tax Cases and more MAKING AN IMPACT THAT MATTERS Since 1845 January 2023 Greetings from Deloitte Malaysia Tax Services Quick links: Deloitte Malaysia Inland Revenue Board of Malaysia Takeaways: 1. Media Release – Use of “Bill Number” as mandatory reference for tax payments from 1 January 2023 2. Return Form (RF) Filing Program for the Year 2023 3. Labuan Companies (Amendment) Regulations 2022, Labuan Foundations (Amendment) Regulations 2022 and Labuan Islamic Financial Services and Securities (Amendment) Regulations 2022 [P.U.(A) 348/2022] 4. Public Ruling No. 5/2022: Taxation of a Resident Individual Part II – Computation of Total Income and Chargeable Income 5. Public Rulings No. 6/2022, 7/2022, 8/2022, 9/2022, 10/2022, 11/2022, 12/2022, and 13/2022 6. Petron Oil (M) Sdn Bhd & Anors v Ketua Pengarah Hasil Dalam Negeri (HC) 7. Ehsan Armada Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (HC) 8. Wiramuda (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (FC) 9. International Naturopathic Bio-Tech (M) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (HC) Important deadlines: 1. Task 2024 tax estimates for companies with February year-end 2. 6th month revision of tax estimates for companies with July year-end 3. 9th month revision of tax estimates for companies with April year-end 4. Statutory filing of 2022 tax returns for companies with June year-end 5. Maintenance of transfer pricing documentation for companies with June year-end 6. 2023 CbCR notification for applicable entities with January year-end Deadline 29 January 2023 31 January 2023 V V V V V V Tax Espresso - January 2023 1. Media Release - Use of "Bill Number" as mandatory reference for tax payments from 1 January 2023 The Inland Revenue Board of Malaysia (IRBM) issued a Media Release on 31 December 2022 to inform that "Bill Number" will be used as a mandatory reference for the payment of all types of direct taxes, except for payment of monthly tax deductions and stamp duty, beginning 1 January 2023. The IRBM has also issued FAQs and a user manual in relation to the implementation of the "Bill Number" and e-biling system. The FAQs and user manual is available on the MyTax Portal at https://mytax.hasil.gov.my/> click on User Manual > click on e-Biling System Usage Manual / e-Biling System FAQ. Information regarding the "Bill Number" can be obtained from 1 January 2023 via the following methods: i. ii. Visit the MyTax Portal at https://mytax.hasil.gov.my/ > click on ez Hasil Services > click on e-Billing. Stated in notices of assessment or estimates and letters of demand sent by the IRBM to taxpayers. Payments can be made online or at the counters of the IRBM payment centres and through agent banks. For payment at counters and agent banks, taxpayers need to print the payment slip or download the required "Bill Number" by scanning the QR code on the payment slip. During the transition period to the use of "Bill Number", taxpayers can still use their Tax Identification Number (TIN) or Tax Reference Number for payment of direct taxes (except monthly tax deductions and stamp duty), until 30 June 2023. Please visit the IRBM's official portal - https://www.hasil.gov.my/ for more information. Any questions and related feedback can be forwarded to the IRBM through the following channels: a) HASIL Care Line at 03-8911 1000 or 603-8911 1100 (Overseas); b) HASIL Live Chat; and c) Feedback Form on the HASIL official portal at https://maklumbalaspelanggan.hasil.gov.my/Maklumbalas/ms-my/ Back to top 2. Return Form (RF) Filing Program for the year 2023 The IRBM has issued a Media Release on 1 January 2023 to inform that the Return Form (RF) Filing Program for the Year 2023 (2023 Filing Program) has been uploaded on its website. The 2023 Filing Program is applicable until the following year's program is issued. Salient points 1) Taxpayers and employers are encouraged to submit their respective RFs via e-Filing provided through the e-Filing facility. Moving forward, e-Filing will be the primary method for the submission of RFs. Tax agents, however, are encouraged to use TAEF for submission of RFs. 2) Effective 18 May 2021, HASIL has implemented a new prefix for individual taxpayers, changing from SG (individuals with non-business income source) and OG (individuals with business income source) to IG. 3) Submission of RFs such as Forms e-C, PT/e-PT, TC/e-TC, C1/e-C1, TA/e-TA, TR, and TN for the year of assessment (YA) 2023 are among the RFs listed in the 2023 Filing Program. 4) RF furnished via e-Filing / postal delivery after the due date for submission of the relevant RF shall be deemed to be received within the stipulated period if it is received within the grace period after the due date for submission of the mentioned RF. This grace period also applies to the payment of the balance of tax under Section 103(1) of the Income Tax Act 1967 (ITA) / Section 48(1) of the Petroleum (Income Tax) Act 1967 (PITA) for all RF (except Form E, Form P, and Form CPE) furnished via e-Filing / postal delivery. 2 Tax Espresso - January 2023 5) Submission of Form E shall only be considered complete if it is furnished together with Form C.P.8D on or before the due date for submission of Form E by employers. Sole proprietorship, partnership, Hindu joint family, and deceased person's estate who do not have employees are exempted from submitting Form C.P.8D. 6) It is compulsory for dormant companies, limited liability partnerships, trust bodies, and co-operative societies to furnish the RF (including Form E and Form C.P.8D). [Please refer to item 3 of the Guide Notes on Submission of RF attached to the 2023 Filing Program for details on dormant companies, limited liability partnerships, trust bodies, and co-operative societies.] 7) Employers are encouraged to furnish information on employees' remuneration for the year 2022 using e-Data Praisi/e-CP8D. The information received will be prefilled into the employees' respective RFs (i.e., Forms e-BE, e-B, e- BT, e-M, and e-MT for the YA 2022) to save time and facilitate e-Filing submission by the employees. Employee's remuneration information can be furnished by the employers via the Mytax Portal from 1 January 2023 to 25 February 2023 (both dates inclusive). 8) Employers should refer to the C.P.8D Information Layout – Pin. 2022 format attached to the 2023 Filing Program as reference to furnish the information on employees' remuneration for the year 2022. Amendments to the employees' remuneration information after the submission can be made by the employers through the Mytax Portal or by sending an e-mail to pindaanE&CP8D@hasil.gov.my. 9) Form E and Form C.P.8D must be submitted to the Tax Information and Record Management Division, Tax Operations Department in accordance with the format and method of submission stipulated in item 2(i)(c) of the Guide Notes on Submission of RF attached to the 2023 Filing Program. Form E and Form C.P.8D which does not comply with the format and method of submission stipulated by HASIL will NOT be accepted. 10) Form E and Form C.P.8D must contain all particulars of employees (including full time / part time / contract employees and interns) and individuals who are responsible or engaged in the management of the organisation (including company directors, co-operative society's board members, association's controlling members, and partners of limited liability partnership). 11) Appendices / working sheets regarding the claim for a tax deduction under Section 110 of the ITA and tax relief under Sections 132 and 133 of the ITA shall be furnished and submitted together with the RF. [Please refer to item 4(i) of the Guide Notes on Submission of RF attached to the 2023 Filing Program.] 12) For assessments raised under Sections 91, 92, 96A, 90(3) and 101(2) of ITA, the tax / balance of tax must be paid within 30 days from the date of assessment. Nevertheless, a grace period of 7 days is given. 13) Where the method for the submission of Form C.P.8D is by uploading the Form C.P.8D in the form of txt via e-Data Praisi/e-CP8D, or through the e-Filing of Form E, employers are only required to upload the employees' particulars. [Please refer to item 2 on page 1 of Part A - Guide on Submission of C.P.8D Particulars in TXT File attached to the 2023 Filing Program.] 14) "SOCSO contribution" has been included under the Employees' Particulars. [Please refer to page 3 of Part A - Guide on Submission of C.P.8D Particulars in TXT File attached to the 2023 Filing Program.] 15) "Medical insurance" and "SOCSO contribution" have been included under the Guide on errors and error messages when using the provided Microsoft Excel format. [Please refer to page 6 of Part B - Guide on Submission of C.P.8D Particulars in Microsoft Excel attached to the 2023 Filing Program.] Please refer to the Media Release and 2023 Filing Program for more details. Back to top 3 Tax Espresso - January 2023 3. Labuan Companies (Amendment) Regulations 2022, Labuan Foundations (Amendment) Regulations 2022 and Labuan Islamic Financial Services and Securities (Amendment) Regulations 2022 [P.U.(A) 348/2022] The Labuan Companies (Amendment) Regulations 2022 [P.U.(A) 346/2022], Labuan Foundations (Amendment) Regulations 2022 [P.U.(A) 347/2022] and Labuan Islamic Financial Services and Securities (Amendment) Regulations 2022 [P.U.(A) 348/2022] were gazetted on 28 October 2022 to amend the following Regulations: Labuan Companies Regulations 2010 [P.U.(A) 414/2010]; Labuan Foundations Regulations 2010 [P.U.(A) 418/2010]; and Labuan Islamic Financial Services and Securities Regulations 2010 [P.U. (A) 417/2010] The respective Regulations above specify the general requirements for documents to be filed with the Labuan Financial Services Authority (the Authority), as well as the prescribed fees to be paid to the Authority as required under the Labuan Companies Act 1990, Labuan Foundations Act 2010, and Labuan Islamic Financial Services and Securities Act 2010 respectively. With effect from 1 January 2023, the prescribed fees to be paid to the Authority as stipulated in the Third Schedule of the respective Regulations have been revised accordingly in the respective Amendment Regulations. Back to top 4. Public Ruling No. 5/2022: Taxation of a Resident Individual Part II - Computation of Total Income and Chargeable Income The IRBM recently issued Public Ruling (PR) No. 5/2022 (dated 9 December 2022) to replace PR No. 5/2018 (dated 13 September 2018). The objective of this PR is to explain the computation of total income and chargeable income of a resident individual who derives income from business, employment, and other sources. The updates and amendments to PR No. 5/2018 are listed in Paragraph 14 of the PR No. 5/2022. Salient points 1) Paragraph 8.3.1 which illustrates the computation of adjusted income/loss from a business source in a table, and Paragraph 8.3.4(a) of PR No. 5/2018 have been updated to reflect the amendments made to Section 34A(1) of the ITA via the Finance Act 2018 and Finance Act 2020 respectively. With effect from 1 January 2021, double deduction on research and development (R&D) expenditure under Section 34A of the ITA shall only be applicable to a person who is a resident in Malaysia in ascertaining his adjusted business income, provided the R&D expenditure has been approved by the Minister of Finance and that the R&D expenditure incurred for the basis period for a YA outside Malaysia does not exceed 30% of the total R&D expenditure incurred. 2) Paragraph 8.3.3(f) of PR No. 5/2018 has been updated to reflect amendment made to Section 34(6)(h) of the ITA via the Finance Act 2019. With effect from YA 2020, the scope of deduction under Section 34(6)(h) of the ITA is expanded to include expenditure incurred for the maintenance of a building designated as a national heritage site by the Commissioner of Heritage under the National Heritage Act 2005 [Act 645]. 3) Paragraph 8.3.3(i) of PR No. 5/2018 has been updated to reflect amendment made to Section 34(6)(k) of the ITA via the Finance Act 2019. With effect from YA 2020, the total amount of deduction allowed for the expenditure incurred for sponsoring any arts, cultural or heritage activity approved by the Minister charged with the responsibility for arts, culture or heritage has been increased to RM1,000,000, of which the total amount of deduction allowed for the expenditure incurred in sponsoring foreign arts, cultural or heritage activity shall not exceed RM300,000. 4) Paragraph 8.3.3(k) of PR No. 5/2018 has been updated to reflect amendment made to Section 34(7) of the ITA via the Finance Act 2018. With effect from 28 December 2018, Section 34(7) of the ITA allows a person to claim deduction on expenses incurred in respect of R&D related to the business directly undertaken by him or on his behalf. [Note: With 4