SE Lai CK Alerts #01-2014 (Public Rulings 11-2013 and 12-2013)

Important Circular

Dear Value Clients and Associates

The following Public Rulings have been issued by the IRB recently:

Public Rulings

Covers

Date issued

PR 11-2013

Pre-Operational Business Expenditure

18 Nov 2013

PR 12-2013

Rescuing Contractor and Developer

17 Dec 2013

 

Public Ruling 11-2013 – Pre-Operational Business Expenditure (Issued 18 Nov 2013)

  1. Explains the deductions allowed for certain expenditure incurred prior to the commencement of a business.
  2. Replaces PR2-2010
  3. In summary, pre-commencement expenditure allowed include the following:

PR ref (Para.)

Expenditure incurred

w.e.f. YA

Deducted in ascertaining

Single or Double Deduction

7

Pre-operational expenditure for approved business venture outside Malaysia

1992

Total income

Single

8

Incorporation expenses

2004

Adjusted income

Single

9

Expenditure on approved training

1992

Adjusted income

Double

10

Pre-commencement business training expenses

1996

Adjusted income

Single

11

Establishment expenditure of a Real Estate Investment Trust or Property Trust Fund

2006

Adjusted income

Single

12

Establishment expenditure of an Islamic stock broking company

From 2.9.2006

Adjusted income

Single

13

Pre-commencement business expenses relating to employee recruitment

2009

Adjusted income

Single

14

Franchise fee paid prior to commencement of business

2012

Adjusted income

Single

 

Public Ruling 12-2013 – Rescuing Contractor and Developer (Issued 17 Dec 2013)

  1. Explains the tax treatment of a rescuing contractor or developer, approved or appointed by the Ministry of Urban Health, Housing and Local Government or Liquidator to revive an abandoned project
  2. Relates to the following legislations:
  • Section 33, subsections 43(2) and 44(2) and Schedule 3 of the Income Tax Act (ITA) 1967,
  • Income Tax (Deduction For Expenses In Relation To Interest And Incidental Cost In Acquiring Loan For Abandoned Projects) Rules 2013 [P.U. (A) 89/2013], and
  • Stamp Duty (Exemption) (No. 6) Order 2013 [P.U. (A) 92/2013].
  1. Special deductions are allowed to the rescuing contractor/developer in reviving the approved abandoned project

Note:

Relevant explanatory notes are extracted from technical alerts issued by the Chartered Tax Institute of Taxation

PDF copies of the above Public Rulings are attached for your kind attention and reference.

Please do not hesitate to contact us should you require clarifications on the above.

19 February 2014


Attachments:

Public Ruling 11-2013 Pre-operational Business Expenditure (18 Nov 2013)

Public Ruling 12-2013 Rescuing Contractor and Developer (17 Dec 2013)

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