August 26, 2014

IRB : Tax Evaders

Tax evaders – would have difficult time leaving Malaysia until they have paid their dues at the airport. Enforcement from Immigration Department to assist the IRB (Income Tax Department) for tax collection has put the Income Tax 1967 (Act 53) into an active mode.

Those blacklisted either for the purpose leaving Malaysia for leisure, business or migration, the no exit order will apply to all tax offenders. If this is a proven effective way, no doubt they might consider coming GST defaulters or GST evaders as well.
The Travel Status could be found under the following website.
Income Tax website also referring immigration website.

August 22, 2014

GST : Process after Registration

GST once register, you would access the GST portal with your new login password. You may find the following letter in your inbox.

You may also take note that there would be no "kesilapan" and "kehilangan" tax invoice from the same letter.

Therefore everything is rules and law. You may apply GST-eVoucher worth RM1000 after getting GST ID. 

You may click for their website under SME.

The process flow would be like this,

a) Register GST, obtain GST ID.
b) Go to the SME website to search for details.
c) Go to GST software vendor, fill up some form, pay on the spot the original price.
d) Get the receipt, proof of payment or supporting documents.
e) Claim GST E-Voucher, which would bank RM1000 into the company bank accounts once approved.

There are terms and conditions after GST e-voucher has been received. There would be no further double tax deduction over GST expenses. I could not remember which documents state that. Maybe later I check it again.

July 18, 2014

GST : Getting a GST Consultant?

Time is running short. GST, Income Tax, Government Bodies, BNM, Immigration all are teaming up together to get the things done which is to improve tax collection.

All information are captured during BR1M, register cars number plate through JPJ, announcing your own overseas holiday through facebook, spying on your business operation, newspaper on company announcement, selling your properties, homestay advertisement, detecting your profit Gross Margin, checking through your bank statement, are stated quite clearly how they are operates and their power through the Income Tax updates seminar which I have attended this month. No more civil investigation but crime investigation being implemented.

Income tax and Custom would share among their expertise, training up more people, and recruit outsource contractor that come with targeted tax collection. If a contractor is able to achieve that, another year of contract is succeeded awarded.

Anyhow, how about your GST in progress? Nowadays GST and Income Tax both sections are computerized, once reach the deadline, the computer would generate late penalty letter. It is quite troublesome for a taxpayer to come up with a letter for appeal. Of course for being late, if you want to appeal, the question of "pay first then appeal" would and could be used against you.

Since Government needs funds quite and perhaps very urgently, we all would expect GST implementation is going to be strict. The question of getting a GST consultant, is a matter how a consultant understand your business environment.

For example, if we employ a Computer Consultant, they will know about the computer technology rather than GST. If we employ GST consultant, they know about the GST, rather than the GST software, how is your book keeping, accounting flow and your income tax computation, and how is your profit being revealed.

As for me, I have been employed in a manufacturing and trading background, been to listed company, involved in the SAP/ERP, normal Autocount / UBS accounting package, in the accounting, costing and finance department, it is very easy for me to cope for being a GST consultant.

Therefore by getting a GST consultant, you have to be extra careful that they do not know what you want, but to mess up your whole business operation in order to cope with GST, because they will implement "I'm saying, You listen" kind of concept as they would not know the business operation and environment.

As for me, I listen first, then custom-made together or having a negotiating process for the whole process to implement GST. If you have a staff knowing how business and operation flow, this staff is perfectly GST consultant without getting a GST Consultant.

Of course, if you are late, let's say Jan 2015 to start to understand how GST flow, any GST consultant coming in would be an 100% instruction, you would listen the GST consultant always saying, GST law say this and that, just like reading from GST book. In other words, no time for both parties to understand and communication each other.

Think carefully, a real GST consultant should make your business operation flow smoothly through the period of preparing and implement the GST.

June 25, 2014

GST : Full of Surprises

GST is full of surprises where some part of the notes not being highlighted such as the following :-

a) Guide on Input Tax 27.10.2013

Where a registered person fails to pay the consideration for the supply of any goods or services made by his supplier within six months from the date of supply and he has claimed input tax on that supply, the taxable person is required to pay back the input tax by accounting an amount equal to the input tax as his output tax. Claim input tax if subsequently pays supplier.

b) Guide on Transitional Rule 21.02.2014. Who pay the GST?

If there is a continuous supply of goods or services spanning the GST commencement, only the portion of supply made before 1 April 2015 is not subject to GST. The proportion of supply made on or after 1 April 2015 is subject to GST.

For example,
After entering into a deal to build a RM1,340,000 commercial complex, a written S&P was signed in January 2015. On 15 May 2015, the purchaser requests that the flooring on the 2nd level to be upgraded to hardwood. The amount payable for the upgrade is not included in the written agreement. The charge for the upgrade by the builder is RM140,000. The ownership and possession will be transferred on 30 September 2015. The upgrade activity is a separate supply from the S&P signed. The builder issues a separate invoice for the upgrade RM140,000 on 20 May 2015 to the
purchaser and he pays the amount the following day.

c) Guide on Transitional Rule 21.02.2014. Contract if less than 2 years? Who Pay GST?

The provision of goods and services under a reviewable contract entered into no less than two years before 1 April 2015 can only be zero-rated until its first opportunity after that date for review or for a period of five years after 1 April 2015, whichever is the earlier.

A ten year business supply contract was made on 1 January 2013 and provides for a market review to be made every five years. If the review is to be made every five years i.e. 1 January 2018, supplies made from 1 April 2015 till 31 December 2017 will be zero rated and supplies made from 1 January
2018 will be subject to GST at a rate of 6%.

d) Guide on Transitional Rule 21.02.2014. Construction Agreement before 01.04.2015? Who Pay GST?
Valuation is needed after 01.04.2015 to calculate GST chargeable, or else the whole amount of contract amount would be subject to GST even agreement sign before GST. 

e) Guide on Register for GST Amend1. Every Company is remained registered minimum 2 years?

f) GAF contains all General Ledger includes Customer Information, Supplier Information, Banks, Profit & Loss Accounts to send forward to Custom when GST submission?

g) GST Refundable 14 days if submit Online?
For companies which are making yearly profit without having any export sales, this scenario would not ever happen, as every company is a net payable tax. But why Custom is saying 14 days is very efficient whereby 90% audience is not applicable?

h) Keeping 7 Years Accounting Record?
Seven (7) years record similar with the Income Tax requirement. Actually there are three (3) people are using these records, Income Tax, GST, and Kementerian Perdagangan Dalam Negeri, Koperasi dan Kepengunaan (KPDNKK). We might expect everyone from the authority would be using these seven (7) years of record.

i) After Individual GST registration, what next?

One might confuse that once register GST, everything is done properly. Studying it carefully, Group registration is at 2nd stage, Cash Basis instead of Invoice Basis, Simplified Tax Invoice, Special Scheme, E-voucher and etc... need some approval or registration. 31.12.2014 is the last day for GST registration, and penalty awaits 01.01.2015 onwards. The reason given is to make everyone ready for it which is 3 months before 01.04.2015 which everyone would shock that (3) months less if compare with the GST implementation date.

j) What comes first before De-Registration take place?
If there are no sales for a particular taxable period, companies are still required to submit a NIL return, i.e. to fill in ‘zero’ in the respective column.

June 18, 2014

GST : Mistake Watch Out

Although GST has not started yet, we might not aware what are the typical mistake that would happen in the long run. Let's check other GST countries by google it.

1. Fail to monitor Yearly Revenue Threshold RM500,000 from Gross Turnover
Business revenue might get near or achieve the threshold value without noticing it monthly, which it would hit the late register penalty as well as late payment penalty both at the same period.

2. Having so many business for a single business owner
Combine all the turnover from all of your trade, profession or all your sole-proprietorship business on the same business nature or different business nature to determine registration.
3. Having a Single Taxable Person
This one most people would find it hard to understand, what GST is suggesting is that as long as there is financial link, economic link or organizational link is happen, all type of business need to be combine although each company threshold is below RM500,000 and each business is belong to each individual.

Financial link refers to:
i. financial support given by one party to another;
ii. one party not financially viable without the support from another party; or
iii.common financial interest in the proceeds of the business

Economic link refers to :
i.seeking to achieve the same economic objectives;
ii.activities of one party benefit the other party; or
iii.supplying to the same circle of customers

Organisational link refers to:
i.common management;
ii.common employees;
iii.common premises; or
iv.common equipments

4. Does not file GST return if does not have any business transaction during the period?
Submit a "Nil" Gst Return is required, just like Income Tax once everyone has a tax file.

5. Always Claim Refund from Custom?
Either business starts to make losses or an exporter would have this kind of option. Other than that, the claiming would be a problem or an indicator that importing goods for quite some months.

6. Self Billed Tax Invoice
This option is a tough work for certain industry where supplier unable issue tax invoice for being the goods and services presented, the customer has to issue self-billed tax invoice instead (input tax) for supplier at such the determination of the raw material prices, terms and conditions is calculated and offered by the customer. Such as Property Agent Commission, Insurance Agent Commission, Professional Services Received, Palm Oil Sector FFB, and etc..

7. Transition Period
Please double check on the following:-
a) Issuing invoice without deliver goods before 01.04.2015, is subject to GST
b) Deposit or advance payment before 01.04.2015, is subject to GST
c) Property completed after 01.04.2015, is subject to GST
d) Rental is subject to GST after 01.04.2015 even the agreement sign before GST period
e) Claiming Paid Sales Tax after 01.04.2015 for conducting audited closing stock on 31.03.2015

8. Getting out from the GST
Required at least 2 years in order to de-register GST. Furthermore GST might subject to custom audit.

9. Delay without Payment to GST
Filling GST must submit together with the payment.

10. Quarterly submission might jam Cash Flow
Filling Quarterly GST would sum up 3 months GST payment, especially top sales is achieved on the 4th quarter of the year and submit on the January, closed to the Chinese New Year. Quarter 4 would be the highest GST payment submission if Quarter 4 of the year achieved represent the best Turnover period.