Industrial Building Allowance

INTRODUCTION

Understanding the detail of each industrial building allowance can get very confusing. IBA claims range from simple to extremely complex situations. Where claims are carefully prepared, they can provide a low-risk and tax-compliant contribution toward significantly reducing the claimant’s tax liability. However, any mistakes made in claiming the deduction can be very costly.

Learn how the definition of an Industrial Building has changed over time. Case laws have shown that an Industrial Building for income tax purposes may not be what an ordinary layman thinks.

COURSE OUTLINE

1. Public Ruling 8 2016

• Types of Buildings that Qualify as Industrial Buildings

• Buildings provided for the facility of employees

• Certain buildings treated as industrial buildings

• Special rules that would affect the amount of IBA that can be claimed by certain assets, as well as the specific rates applicable to different types of industrial building

• Meaning of a “factory” for IBA claims

• Meaning of within the same curtilage

• The types of expenses that can and cannot be capitalized as part of an industrial building

2. Public Ruling 3 2018

• Qualifying Building Expenditure

• Eligibility to Claim Industrial Building Allowances

• The date Qualifying Building Expenditure Incurred

• Relevant Interest -can a tenant claim IBA?

• Can renovations and alterations of a building qualify for IBA claims?

• Temporary Disuse of Building

• Disposal of an industrial building

• Tax implications of newly acquired and disposed of fixed assets

3. Balancing Charges, Balancing Allowances, and “Claw Back” provision

4. Case laws on Industrial Building Allowances Claims Understand from case law precedents whether certain types of buildings can be considered an industrial buildings under different situations.

PROFILE(s)

Yong Mei Sim has served over 35 years in the Inland Revenue Board of Malaysia (“IRB”) and held the last position as the Principal Assistant Director of the Penang branch, before retiring in 2016. She obtained a Bachelor of Science Degree majoring in Economics with a Second Class Upper from the University Science of Malaysia in Penang. She was later awarded the prestigious JPA scholarship to pursue and successfully completed her Master’s of Science in Taxation from the Golden Gate University in San Francisco, USA. During her tenure in office, she has been, inter alia, an audit manager in charge of the Payroll Taxes Unit, Field Audit and Desk Audit Unit. She had actively assisted the Federal Councils of the IRB in handling tax litigation cases. Among the landmark tax litigation cases which she was directly involved are ICTSB vs DGIR, PSSB vs DGIR and Marigold (M) Sdn Bhd vs DGIR. With her vast knowledge and experience in the field of Malaysian taxation, she has been invited by the IRB and other professional bodies to speak extensively around the country and to share her valuable experience and expertise on income tax updates and all other relevant taxation matters.