Various cross boarder transactions are subject to withholding tax, depending on the nature of the transactions. Therefore, it is important to understand the principal and concepts of the withholding tax. It helps to determine the compliance requirements. Non-compliance give rise to the imposition of penalties and non-tax deduction of the payments made. It has been announced in the recent Budget Proposal 2022 that payments to agent, dealer or distributor are now subjected to withholding tax, with effective from 1/1/2022. With the introduction of the said withholding tax mechanism, it results onerous burden on the taxpayers. This includes additional administrative responsibilities and compliance costs.
● An overview of the current Malaysian Withholding Tax
● Payments which subject to withholding tax
1. Contract fee (S107A)
2. Interest/Royalty (S109)
3. Technical service/Rental of moveable property (S109B)
4. Gains or profit under Section 4(f) (S109F)
5. Public entertainment (S109A)
6. Payments to agent, dealer, or distributor (S107D)
● An overview of Permanent Establishment and Double Taxation Agreements
● Compliance procedures, administrative aspects and penalties for non-compliance
● Public Ruling and Practice Notes
● Withholding tax audit
Ho Yi Hui has over 20 years’ experience in tax compliance and tax advisory assignments. She is now an Executive Director of Hanz Consulting Group Sdn Bhd (“Hanz”). Before joining Hanz, she worked with BDO Tax Services Sdn Bhd (“BDO”) and RSM Tax Services Sdn Bhd (“RSM”). As an Executive Tax Director of BDO and RSM, she has been involved in the provision of tax compliance matters of public listed companies, multinationals and medium to large private companies. She has handled tax matters for corporations of various sizes involved in construction, property development, hotels, insurance, and manufacturing. Since 2009, she has been extensively involved in representing tax payers in resolving tax audit and tax investigation cases with the Malaysian Inland Revenue Board. In addition, she has assisted clients in the preparation of transfer pricing documentation. She is a fellow member of the Association of Chartered Certified Accountants (ACCA). Apart from this; she is a licensed tax agent under Section 153 of the Income Tax Act, 1967 and licensed GST Tax Agent under Section 170 of the GST Tax Act 2014. She is also a professional trainer certified by the Human Resources Development Fund (HRDF).