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FAQs on revision of tax estimate and deferment of tax installments

IRB’s FAQs on revision of estimate of tax payable and deferment of tax instalment payments arising from COVID-19 measures

 

As highlighted in earlier alerts, a number of tax and non-tax measures have been announced as Malaysia’s response to the COVID-19 pandemic, including the following:

  • Businesses in the tourism sector and Small and Medium Enterprises (SMEs) (as defined) are allowed to defer their monthly income tax instalment payments
  • Businesses are allowed to revise their estimate of tax payable in the month of the third monthly tax instalments, where the third-month tax instalment falls in 2020

The Inland Revenue Board (IRB) has now issued a Frequently Asked Questions (FAQs) document, in Bahasa Malaysia, titled “Soalan Berkaitan Pindaan Anggaran Cukai (CP204) Pada Bulan Ketiga Ansuran Dalam Tahun 2020 Dan Penangguhan Bayaran Anggaran Cukai Bagi Syarikat Berkaitan Industri Pelancongan Dan Perusahaan Kecil Dan Sederhana (PKS) Di Bawah Pakej Rangsangan Ekonomi (PRE) 2020”, to provide clarification on the above proposals.

Some of the key points are outlined below.

FAQs on the revision of estimate of tax payable in the month of the third tax instalment, where the third-month tax instalment falls in 2020

(a) Q7: Does the taxpayer have to wait for approval from the IRB for this application?

    It is not necessary as long as the application is complete, in order and satisfies the qualifying criteria accordingly.

(b)  Q8: When is the due date for the submission of this revision?

    The due date depends on the basis period of the company.

Basis period Third month of tax instalments Due date for the submission of the revision Effective date of the revision
1 January 2020 –31 December 2020 April 2020 31 May 2020 (extension of time granted as per the IRB’s FAQs) Instalment originally due on 15 April 2020^ (extension of time granted)
1 August 2020 – 31 July 2021 November 2020 30 November 2020* Refer to Note below

*If the application form is submitted before 15 November 2020, the revision is effective for the instalment due on 15 November 2020. If the application form is submitted after 15 November 2020, the revision is effective for the instalment due on 15 December 2020.

It is not clear, however, what the effective date is for applications submitted on the 15th of the month.

^Based on the IRB’s latest FAQs dated 21 April 2020, an extension of time is granted until 31 May 2020 for tax instalment payments due on 15 April 2020 and 15 May 2020.

FAQs on the deferment of monthly income tax instalment payments for businesses in the tourism sector and SMEs

Q2: What are the Malaysian Standard Industrial Classification (MSIC) codes for businesses in the tourism sector that qualify for this deferment?

51101 - 51103, 55101 - 55109, 55200, 55900, 50111 - 50113, 79110, 79120 and 79900 (refer to the Appendix to the Alert for further details).

For further details, including examples on the mechanism of the above-mentioned proposals, please refer to the FAQs which are available via the following link:

http://lampiran1.hasil.gov.my/pdf/pdfam/Soalan_Lazim_FAQ_Berkaitan_Pelaksanaan_Pakej_Rangsangan_Ekonomi_2020.pdf

No. Business code Activity
1 51101 Transport of passengers by air over regular routes and on regular schedules
2 51102 Non-scheduled transport of passengers by air
3 51103 Renting of air-transport equipment with operator for the purpose of passenger transportation
4 55101 Hotels and resort hotels
5 55102 Motels
6 55103 Apartment hotels
7 55104 Chalets
8 55105 Rest houses / guest houses
9 55106 Bed and breakfast units
10 55107 Hostels
11 55108 Home stays
12 55109 Other short-term accommodation activities
13 55200 Camping grounds / sites and recreational vehicle parks
14 55900 Other accommodation
15 50111 Operation of excursion, cruise or sightseeing boats
16 50112 Operation of ferries, water taxis
17 50113 Rental of pleasure boats with crew for sea and coastal water transport
18 79110 Travel agency activities
19 79120 Tour operator activities
20 79900 Other reservation services and related activities