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 subsequent
YA.
E-filling
B. H. Loh & Associates

2) The employer is a company, the employer’s return
must 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 or
enjoyment of property to be used  Treated as gross
income for period the sum received,
 A refund of income received  deducted from the
gross 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 the
withholding tax and a penalty (in respect the service
perform in Malaysia). (Sec 109A)
1. The tax deduction is not allowed, (Sec 39(1)(q)).
2. The DG may imposed a penalty for an incorrect
return under Sec 113(2).
 Wef 1/1/2016
Single deduction

 Interest is due to be paid in any following YA, the
person must make a written claim for deduction of
interest not later than 12 months from end of basis
period the amount is due to be paid. (Sec 33(5)
 DG may reduce the assessment in respect of the
interest 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 & D
expenditures automatically, but not exceeding
RM50,000 for each YA. (PU (A) 167/2011)
 However companies are still required to submit to IRB
for 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 home
and nursing home
37B Building used for research
37C Building used for warehouse
37E Building used for approved service project
37F Building used for hotel

Industrial Building Allowance
Schedule 3,
ITA 1965
Description
37G Airport
37H Motor racing circuit
42A Building used for a manufacturing, hotel or
tourism business or an approved service project
42B Building used for a school or an educational
institution.
• The building used for his business

 If part of asset (with significant value) that is replaced
with a new part, the existing / old part is deemed a
disposal
 For the part of disposal :
1) QE – using discounted value basis / method (DV),
2) Residual expenditure – QE reduced by allowance
made prior to disposal,
 The allowance for new part will be calculated based
on 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 claim
Old 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 2016
from a new machinary cost by discounted value (DV)
40,000 = 33,000
1.05
4
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 with
paid-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 than
RM20,000,
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 than
RM20,000 or imprisonment not exceeding 6 months
or both, and
2. Special penalty treble (3 times) amount of tax
determined on best judgment by DGIR.
Penalties

 If a taxpayer who fail to furnish correct particulars
required by DG in a tax return form is convicted an
offence 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 than
RM20,000 or
2. to imprisonment for a term not exceeding 6 months
or 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 : bhlohass@gmail.com
Web-site / facebook : bhloh.com.my
Thank you

Budge 2016

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Budge 2016