Tax and Secretarial Fee Tax Deduction Malaysia 2020

Secretarial & Tax Fee Tax Deduction Malaysia 2020

Secretarial & Tax Fee Tax Deduction Malaysia 2020

New rules are coming to town!! Changes in tax treatment of secretarial and tax filing fees.

Overview

On 18.09.2020, the IRB had issued a technical guideline on tax deductions for secretary and tax agent fees effective from YA2020.

Key takeaway

  • What is the current practice (YA 2019 and before)?

  • Changes in year 2020 onwards

  • What is the secretarial fee? 

    • Deductible

    • NOT deductible

  • What is tax filing fees?

Summary of learning

What is current practice (YA 2019 and before)?

Expenses incurred on secretarial and tax filing fees give a tax deduction of up to RM5,000 and RM10,000 respectively for each year of assessment (YA).

Changes in year 2020 onwards

Secretarial and tax filing fees being combined, such that a total deduction of up to RM15,000 per YA be allowed for both expenses from YA 2020 onwards.

Scenario:

ABC Sdn. Bhd. has received following invoices for financial year end is 31 December 2020 and made payment as follows:

What is the secretarial fee?  

Secretarial fee charged in respect of secretarial services to comply with the statutory requirements under the Companies Act 2016 is deductible as follows:

  • Lodgement of annual return and Financial statements.

  • Change of name

  • Add or delete business activities

  • Retainer fees

  • Issuance or transfer of shares

  • Update register of members and directors

  • Appointment of director or auditor

*Condition to be made: Must be incurred and paid

General secretary charges NOT deductible:

  • Incorporation fee for new company (include professional fees)

  • Fee for acquisition of shelf company (include professional fees)

  • Name search fee to SSM (include professional fees)

  • Preparation of registration documents

  • Company profile printout from SSM

  • Professional fee for preparation of ordinary/ special resolution

  • Professional fee for preparation of other resolution, confirmation letter to bank or solicitor

  • Professional fees for preparation of trust deed

  • Preparation fees for CTC documents

  • Attestation fees for commissioner for Oaths

 What is tax filing fee?

A tax agent approved under the Income Tax Act 1967 (ITA) in respect of services provided for the:

  • Preparation and submission of income tax returns

  • Estimate of tax payables

A person in respect of services provided for the preparation and submission of returns in the prescribed form for the purposes of:

  • Section 26 of the Sales Tax Act 2018

  • Section 26 of the Service Tax Act 2018

  • Section 19 of the Departure Levy Act 2019; or

  • Section 19 of the Tourism Tax Act 2017

Source:

LHDN Technical Guide

Visit us www.ktp.com.my

Visit us www.thks.com.my

 
 
taxKtp KtpTax fee, Secretarial fee