This document provides an overview of capital allowances under Malaysian tax law. It discusses that while accounting depreciation is not tax deductible, taxpayers are granted tax depreciation or "capital allowances" on qualifying capital expenditures to determine taxable income. Capital allowances are only given for business sources and only to the person who incurs the qualifying expenditure. The document outlines the types of capital allowances (initial allowance, annual allowance, notional allowance), eligibility requirements, qualifying expenditures, treatment of plant and machinery purchases and disposals, and other related topics.
The corporate landscape in Malaysia has been shaken up by the passing of the new Companies Act 2016. The Act came into force on 31 January, 2017, effectively repealing the Companies Act 1965. The series of slides provides you with the essential changes brought about by the new Act.
BY ZALEHA ZAIN AND PARTNER.
COMPANIES
CONTENTS
Types of Companies
Differences between Companies and Partnerships
Advantages of Companies over Partnerships
TYPES OF COMPANIES
Companies in Malaysia are classified according to:
(i) liability or
(ii) private or public status
BY LIABILITY
S.14 (2) Companies Act 1965 (CA) – a company may be:
A company limited by shares;
A company limited by guarantee;
A company limited by shares and guarantee;
An unlimited (liability) company.
FOREIGN COMPANY
S.4(1): ‘Where the company, or corporation, society, association or other body incorporated outside Malaysia, but which carries on business in Malaysia..‘
It is wholly or majority owned (measured in % of shares held) by non-Malaysians.
Such company has to lodge certain documents as laid down in S.332(1) CA 1965 and pay the appropriate fees before commencing the business in Malaysia.
A foreign company registered under the “Companies Act” 1965 has the power to hold immovable property in Malaysia.
The corporate landscape in Malaysia has been shaken up by the passing of the new Companies Act 2016. The Act came into force on 31 January, 2017, effectively repealing the Companies Act 1965. The series of slides provides you with the essential changes brought about by the new Act.
BY ZALEHA ZAIN AND PARTNER.
COMPANIES
CONTENTS
Types of Companies
Differences between Companies and Partnerships
Advantages of Companies over Partnerships
TYPES OF COMPANIES
Companies in Malaysia are classified according to:
(i) liability or
(ii) private or public status
BY LIABILITY
S.14 (2) Companies Act 1965 (CA) – a company may be:
A company limited by shares;
A company limited by guarantee;
A company limited by shares and guarantee;
An unlimited (liability) company.
FOREIGN COMPANY
S.4(1): ‘Where the company, or corporation, society, association or other body incorporated outside Malaysia, but which carries on business in Malaysia..‘
It is wholly or majority owned (measured in % of shares held) by non-Malaysians.
Such company has to lodge certain documents as laid down in S.332(1) CA 1965 and pay the appropriate fees before commencing the business in Malaysia.
A foreign company registered under the “Companies Act” 1965 has the power to hold immovable property in Malaysia.
This ppt is a comprehensive presentation on various aspects for the entities working in the construction domain. Starting from Tendering to Budgeting and going on to indirect tax aspects like VAT and service Tax.
TransPrice Times - 1st September - 15th October 2016Akshay KENKRE
Dear Readers,
We are pleased to present TransPrice Times from 1 September- 15 October 2016
In this bulletin, some key issues in Indian litigation have been discussed with regard to royalties, aggregation approach corporate guarantees etc. Further, find what's new in the revised Income Computation and Disclosure Standard, that were notified recently.
We hope you find this newsletter both timely and useful, and we look forward to your feedback and suggestions to improve it further. You can write to us at akshaykenkre@transprice.in
Happy Reading!!!
Taxmann's Daily Tax Digest | 24th July 2020Taxmann
Taxmann's Daily Tax Digest:
A Daily Section-wise digest of Judgments & Statutes on Income-Tax, GST, Company Laws, FEMA, Banking & Insurance Laws, Accounts & Audit, International Taxation, and Transfer Pricing.
Ease of Doing Business and Investment Facilities for Business Actor in Indone...AHRP Law Firm
The Indonesian Government is steadfast in its commitment to fast-track the development of Indonesia's New Capital City (Ibu Kota Nusantara), as exemplified in the infographic below.
The recently enacted Government Regulation Number 12 of 2023 which was issued on 6 March 2023, seeks to simplify business licensing, provides facilities on land rights procurement, foreign employment and housing, and investment.
This regulatory framework also serves as an open invitation to global investors to join hands with Indonesia in constructing a sustainable capital city that stands out as a symbol of progress and innovation for the world.
The twenty fourth issue of our monthly tax newsletter – Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.
Service tax on works contract (Pre-Negative List)sandesh mundra
This ppt gives a glimpse of service tax payment in india as applicable to works contractors before the negative list. This is very relevant to builders and developers. Service Tax posers and illustrations were also covered by the speaker during the presentation.
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Newsletter on daily professional updates- 23rd September 2019CA PRADEEP GOYAL
The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge
Have a look, here is your Daily dose of professional updates in newsletter form- 23st September, 2019
Similar to Chapter 7; capital allowances students (20)
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
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RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
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[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
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CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
3. Introduction
A person engaged in business activity would normally
use assets in the course of producing business income.
Therefore depreciation provision is made in the
accounts to reflect the true profits of the business.
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4. Continue
However, accounting depreciation is not recognized as
tax-deductible expenditure by the tax laws simply
because it really represents the writing off of a portion
of the capital cost of asset over time.
The taxpayer is granted a tax depreciation or “capital
allowances” on qualifying expenditure incurred on
assets for the purpose of determining the taxable
income of business.
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5. Continue
Capital allowances are given only in respect of a
business source and only for the person who incurs
the qualifying capital expenditure
Computed for a year of assessment and are deducted
from the adjusted income of the business in arriving
at statutory income.
It is provided for plant and machinery
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6. Definition of Plant and Machinery
ITA 1967 does not define the word ‘plant and machinery’.
Case of Yarmouth vs France – plant is whatever apparatus
used by businessman for carrying his business including all
goods and chattels, fixed or moveable, live or dead but
exclude his stock in trade which he buys or makes for sale
which he keeps for permanent employment in his
business.
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7. Continue
Jarrold v John Good & Sons
Moveable partition is a ‘plant’
Where the moveable partition is part of a setting, it is
not a ‘plant’
CIT v Taj Mahal Hotel
Sanitary and pipeline setting is part of ‘plant’
CIR v Barclay, Curle & Co. Ltd.
The functional test
Dry dock is a ‘plant’
Cooke v Beach Station Caravans Ltd (1974)
Swimming pool is a ‘plant’
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8. Continue
Ketua Pengarah hasil Dalam Negeri v MSDC (2003)
The taxpayers has satisfied the following conditions:
The premises test
The business test
The stock in trade test
Anchor International Ltd v CIR (2003)
Artificial football pitch is not a ‘plant’
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9. Eligibility of capital allowances
4 conditions to be eligible for capital allowances:
The person incurring capital expenditure must be
carrying on a business
The capital expenditure must have been incurred on the
provision of machinery or plant
The machinery or plant must be used for the purpose of
the claimant’s business
The person must be the owner of the asset at the end of
the basis period
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10. Persons Eligible for Capital Allowance
Capital allowances are granted only to a person
who incurs qualifying expenditure on the provision
of machinery or plant for the purpose of business.
The capital allowances on plant and machinery are
given against adjusted income from a business
source.
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11. Persons Eligible for Capital Allowance
A person deriving employment income will not be
able to claim capital allowances on plant and
machinery from that employment income.
The person must be the owner of the assets at the
end of the basis period.
Hire Purchase
Partnership
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12. Qualifying Expenditure on
Plant and Machinery
Any capital incurred on the provision of
machinery or plant for the purpose of business –
qualify for QE on plant and machinery.
This includes purchase price, incidental cost such
as freight charges, custom duty and installation
exp.
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13. Plant and Machinery
under 10% Rule
Para 2(b) exp. incurred in preparing, cutting,
tunneling or leveling land in order to prepare the
site for the installation of plant – qualify for QPE.
But such costs should not exceed 10% of the
aggregate cost of PM and cost preparing site.
If exceed than 10%, cost preparing site not
qualify as QPE but only the cost of plant. (See
Example 1)
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14. QE of Plant and Machinery under
Sch.3, Para 2A, 2B and 2C
• Para 2A – PM bought for non-business purposes,
then brought to business – QPE = market value of
PM at the time of transfer.
• Example:
Mr. James bought a refrigerator for private use in 2007. However, on 2
March 2009, the refrigerator was brought into his business use for
storage of raw material. The net book value of the refrigerator was
RM5,500. However, the market value was only RM4,600.
• Answer:
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15. QE of Plant and Machinery under
Sch.3, Para 2A, 2B and 2C
• Para 2B – PM was in use during tax exempt period and
continued to use after the tax exempt period – QPE =
the lower of the NBV or MV of PM.
• Example:
– Intan Bhd as given tax exemption from the basis year 2001 to
2009. The company purchased a plant and machinery in the
year 2008 for business use. The plant continued to be used
after the expiry of tax exemption period. The net book value is
RM55,000 and the market value at the time of expiry of tax
exemption period was RM60,000.
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17. QE of Plant and Machinery under Sch. 3,
Para 2A, 2B, and 2C
• Para 2C – PM in use in buss. o/side M’sia and
brought into use in buss. in M’sia - QPE = the lower
of the NBV or MV of PM.
• Example:
• In the basis year 2007, Meranti Bhd purchased a machine for the
use of its business in Thailand. The machine cost RM70,000 and its
is being depreciated by 20% using straight line basis. In the basis
year 2009, Meranti decided to bring the machine back for the use
of its business operation in Malaysia. The market value at the time
of transfer is RM43,000.
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19. QE of Motor Vehicle Not Licensed for
Commercial Transportation
Licensed for commercial use – QE no limit
Not licensed for commercial use – QE = RM100,000
(w.e.f 20.10.2000), provided:
Total cost of MV must be more than RM100K and
does not exceed RM150,000.
The MV must be new
If MV worth than RM150,000, QE limited to
RM50,000
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20. Other Qualifying Capital Expenditure
Fish pond, animal pens etc. [Para. 2(1)( c )]
Machinery or plant used for research (approved by
the minister)
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21. Date of Qualifying
Expenditure Incurred
The basis period for the purpose of capital allowance is a
basis period for YOA that particular business sources.
Cap. exp incurred before the commencement of business =
QE deemed incurred when the business commenced – so
basis period for YOA is when the business commenced.
Cap. exp incurred after the commencement of business =
date of purchase is treated as date of QE incurred.
Refer to example 2 (pg.448)
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22. Types of Capital Allowances:
Initial Allowance
Sch. 3, Para 10 – the rate of IA 20% on QPE.
Only claim in the first year (year of cap. exp is incurred).
Certain buss. can claim higher IA such as mining 60%
and construction 30%.
Conditions (all must be satisfied) – incurred, in use for
the business and PM must still use at the end of
accounting period.
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23. Types of Capital Allowances:
Annual Allowance
• Claimed annually on straight line basis
• The annual allowances commence in the basis year
for the year of assessment in which the qualifying
capital expenditure is incurred.
• It will continue to be given in the following and
subsequent years of assessment until the qualifying
expenditure is fully written off OR when the plant
and machinery is sold.
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24. Types of Capital Allowances:
Annual Allowance
Rate depend on the type of asset:
Types of asset
Rate
Plant & Machinery
14%
Heavy machinery/ Motor vehicles
20%
Computer hardware and software*
40%
Others (i.e. office equipment, furniture & fittings)
10%
To claim AA, the same conditions are applied
*accelerated CA
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25. Notional Allowance
Cannot claim AA when PM is not in use for the
business.
But if the asset is temporarily disuse and deemed to
be in use for buss. purpose, then annual allowance
must be computed.
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26. Residual Expenditure
The written down value of a QE
Arrived at after reducing the following:
Initial allowance that is given
Annual allowance that is given
Notional allowance (if any)
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27. Dual Usage
When incurred QE for the purpose of business and
partly for non-business purposes.
Cap. Allowance claimed shall be apportioned for
the purpose of business only.
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28. Disposal of Plant and Machinery
Dispose the PM – balancing allowances (BA) and
balancing charges (BC) may arise (see example 3 & 4,
pg 491).
A disposal can come about under the following
circumstances
When a PM is disposed of;
The business permanently ceases but the PM continue belong
to the business
PM permanently ceases to be use in the business
BA arises when RE > disposal value.
BC arises when RE < disposal value (restricted)
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29. Assets Disposed within
Two Years (Para 71)
Claimed for CA and subsequently disposes of PM
within 2 years of acquisition – all CA shall be
withdrawn and treated as BC.
See Example 7
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30. Unabsorbed CA
When the amount of CA claimed exceeds the
adjusted income from the same source, the excess is
to be carried forward and allowed against the
adjusted income from the same business source for
the following year of assessment
When a business ceases permanently, unabsorbed
CA is permanent loss
Wef YA2006: unabsorbed CA cannot be carried
forward if there is a change of more than 50% in its
shareholding (continuity of ownership); pg 456
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31. Plant and Machinery Purchased under
Hire Purchase
If the person incurred cap. Exp on PM under hire
purchase agreement for the buss. purpose – QE
shall be taken from capital portion of any
installment made.
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32. Continue
Example:
Tegar Sdn. Bhd purchased a tractor under a hire purchase
agreement on 10 July 2008. The information regarding the
hire purchase is as follows:
Cash price
RM70,000
Hire purchase price
RM120,000
The payment is made by monthly installment of RM2,000
for a period of Five (5) years (payable at the end of month).
A deposit of RM10,000 was paid on the day the tractor was
purchased and the first installment was due on 31 July 2008.
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33. Continue
Discussion:
Calculate the capital allowances entitled to Tegar Sdn. Bd.
For the year of assessment 2008 and 2009.
Answer:
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34. Treatment of Small Value Assets
From year of assessment 2006, capital allowance on small
assets would be given a one-off 100% allowance for each
asset of value not exceeding RM1,000 each.
The total value of such assets not exceed RM10,000 in the
relevant year.
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