Review by TAN KIM SENG
Title: Malaysian Master Tax Guide 2003
Authors: CCH Tax Editors
Publisher: Commerce Clearing House
CONCISE, with clear interpretation of the Malaysian tax environment – this is the aim of the 2003 Malaysian Master Tax Guide, now in its 20th edition.
The 20th edition has been drafted with the aim of providing up-to-date information with the current developments and changes announced in the 2003 Budget and effected via the Finance (No 2) Act 2002 and exemption orders.
The prelude section highlights significant tax changes witnessed in the 2003 Budget.
The Income Tax Act, 1967, ancillary Acts and decisions upheld by the courts form the backbone of the guide. The law is stated as at Dec 31, 2002.
The objective of the 20th edition remains essentially the same as its previous editions: to provide a comprehensive guide to the Malaysian tax regime as it applies not only to individuals and companies, but also to partnerships, estates, trusts and mutual concerns like clubs and trade associations.
The tax laws applicable to these taxable entities are expounded with illustrations to explain the relevant concepts and principles on how the law is applied in practice.
Judicial decisions of the courts, where relevant, are also mentioned.
The guide next covers more technical issues that underline the basis of taxation.
In-depth attention is given to the basis of assessment, how assessable income is derived, business and non-business deductions, and capital allowances.
Also addressed are exemption and exclusions from assessable income which details the “what and who” are taxable/not taxable.
Of interest to foreign business professionals who are keen to do business in Malaysia are the topics on non-residents and investment incentives.
It is imperative to know the various investment incentives and special concessions available to create an efficient tax structure.
Appreciating the existence of international tax agreements, which serve to avoid double taxation problems, certainly simplify matters toward creating that efficient tax structure. The guide obliges with a topic dedicated to tax treaties and double taxation relief.
This section includes a very useful summary of double taxation agreements between Malaysia and other contracting countries.
The guide also provides useful information on real property gains tax as well as tax implications for special cases like leasing, builders and land developers.
The terms tax avoidance and tax evasion take on a whole new meaning with the self assessment system which is already in place for companies and to be implemented for individuals in year of assessment (Y/A) 2004.
The system shifts the responsibility of determining and computing tax from the Inland Revenue Board (IRB) to the taxpayer and any non-compliance or under-declaration of income will be penalised heavily.
The guide provides an insight into tax avoidance and tax evasion covering topics like what constitutes an arm’s length transaction, powers of the director general of the IRB, and investigation and detection procedures, among others.
The guide has a section dedicated to the preparation of tax computations of individuals as well as companies.
Particularly useful is its mention of pertinent points to bear in mind when preparing such computations.
A tax calendar and a summary of offences and penalties can be found in the guide.
A quick checklist, detailing items that are taxable and non-taxable, is also laid out with relevant references to other sections of the guide if further reading is intended.
The guide is certainly a must-have with its coverage of all key aspects of the Malaysian tax regime.
It is a helpful guide to students, practitioners and foreign business professionals by giving them a firm grasp of tax matters and bringing their knowledge up to date with the current developments in this field, all done up in an easily comprehensible manner.
With the self assessment system fully operational by Y/A 2004, it pays to know your tax well.
l The Malaysian Master Tax Guide 2002 is available at MPH Bookstores. For further enquiries, please call CCH at (03) 2026 2003