Thank you for reading our newsletter. There are quite a lot of recent updates on GST and legislation which we believe are relevant to be raised to our readers.
Also please be informed that we will be moving offices effective from 5th September 2016 to serve you better. Our offices will be closed on 1st and 2nd September to facilitate the move. Our new address is:
Unit 28.01, Menara Zurich
No. 15, Jalan Dato’ Abdullah Tahir
80300 Johor Bahru, Johor, Malaysia
We will send another email soon to provide more information on our move.
In this issue of our newsletter, we are highlighting 4 key updates to be aware of. We also would like to inform you on our GST Health Checks Service.
1. Update to “Guide on Accounting Software Enhancement Towards GST Compliance” (dated 1st August 2016)
This guide is not just a guide for software developers, but provides guidance on use of tax codes, linkage to GST-03 returns and the fields affected, and information on GST Audit File
(GAF). Therefore, it is vital to refer to this for GST accounting. We summarise below the updates most pertinent to the Accountant in business.
We will be organising a GST update and accounting course soon to elaborate on the changes.
2. Sufficient records under GST requirements for Inventories
3. Updates to SOCSO (w.e.f. 1 June 2016)
4. Updates to Minimum Wage (w.e.f. 1 July 2016)
5. GST Health Checks
Please refer to the sections below.
Warmest regards,
M.S. WONG & CO.
Moving Details:
Sept 1 & 2 Office Closure For Moving
Sept 5
New Office Will Be Open and Services Resume
Unit 28.01, Menara Zurich
No. 15, Jalan Dato’ Abdullah Tahir
80300 Johor Bahru, Johor, Malaysia
(1)Update to “Guide on Accounting Software Enhancement Towards GST Compliance” (dated 1st August 2016)
The recent update is important to take note of because of new requirements on GST-03 returns and new tax codes. If you have purchased off-the-shelf accounting software (e.g. UBS, Autocount etc. ) expect updates to the software soon. The key updates to take note of are:
a) Updates to Recommended Purchase Tax Codes
b) Updates to Recommended Supply Tax Codes
c) Other Recommended Purchase Tax Codes that can be used
New codes are: TX-FRS; TX-NC; TX-ER; IM-CG; IM-RE; NP
These are recommended by RMCD if applicable to the business.
One recommended tax code most companies can consider using is TX-NC. This is for GST incurred on purchases where the company chooses not to claim the input. For example, format of invoices not proper. This will be recorded under GST expenses. We recommend companies to use this code as GST classified under this will not be deductible under Income Tax.
Companies importing capital goods from overseas should also use IM-CG and this will be recorded under fields 6a, 6b and 16.
d) Other Recommended Supply Tax Codes that can be used
New tax codes are: SR-MS; SR-JS; OS-ER; OS-OV; NS
These are recommended by RMCD if applicable to the business.
e) New Fields for GAF
There are also new fields required to be reported under GAF such as Suppliers GST number; posting date; Customer GST number; Export Declaration Number etc.
(2) Sufficient Records under GST requirements for Inventories
A recent update to GST General Guide (12th July 2016) added a section on records required for goods written off, such as if goods are expired, damaged, or destroyed. Input tax credit is allowable for these goods provided supporting documents can be furnished upon request. Documents that are required to be kept by GST registered person for the written-off goods are as follow:
(a) audited report / financial statement and management report;
(b) audited accounts reporting the written-off goods;
(c) evidence that the asset has no commercial value;
(d) evidence that the asset is spoiled / unusable / expired;
(e) approved letter by relevant body for disposal / destruction (if any) e.g.: Certificate from Ministry of Health Malaysia, Environmental Department or Department of Chemistry Malaysia;
(f) destruction certificate signed by company’s chairman / director (refer to link);
(g) other documents as proof the asset has been disposed / destroyed.
We would also like to remind GST registered businesses that under the GST Act 2014, subsection 43 (3), (4) and (5), the DG of Customs has the legal right to require a GST registrant to account for any goods purchased or imported (meaning whether these goods are still on hand or supplied). In other words, all GST registrants should maintain proper fixed asset registers and inventory (movement) reports.
(3) Updates to SOCSO
Effective 1st June 2016, the employee’s maximum contribution to SOCSO was raised from RM14.75 to RM19.75. The employer’s maximum monthly contribution was raised from RM51.65 to RM69.05.
Prior to 1 June 2016, only employees earning less than RM3,000 per month on commencing employment were required to contribute to SOCSO, for all subsequent employment, even if their salary subsequently exceeds RM3,000. Employees who earned more than RM3,000 per month were allowed to opt out of SOCSO contributions.
Effective 1 June 2016, the Employees’ Social Security Act 1969 (Act 4) has been amended to apply to all Malaysian employees including a permanent resident (except those excluded under the First Schedule of the Employees’ Social Security Act 1969) who are employed under a contract of service or apprenticeship with an employer irrespective of their wages.
Effective 1st July 2016, new minimum wages are in place. A tabulation of the new minimum wage structure is shown below:
(5) GST Health Checks
Worried about your GST compliance and risks? GST audits will commence very soon in 2017. At M.S.Wong & Co, we have a dedicated team that can help. We can perform a GST Health Check review that will help you identify areas at risk of non-compliance. The service includes:
1) Use of internally developed diagnostic checklist to understand and identify key risk areas;
2) Testing and review of key GST processes and controls through walkthrough tests and sample testing;
3) A report detailing our findings, potential risk areas and practical guidance and recommendations to reduce your GST risks.
Please contact Simon/Hui Shan on 07-3328335 or gst@mswongco.com to find out more.
