Burhanuddin&Associates - Chartered Accountant

This may be relevant when you draft an audit opinion on a Company's financial statements that transit from an audit exemption to a full audit.

This tax case is important for property developers, landowners, and businesses involved in sale transactions because it highlights a common tax issue on when income from land disposals should be recognised for tax purposes. The dispute focused on whether tax should be imposed based on the full sale price stated in the Sale and Purchase Agreements (SPAs), even though part of the payment had not yet been received and certain conditions relating to subdivision of the master title were still pending.

𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝 𝐨𝐟 𝐭𝐡𝐞 𝐜𝐚𝐬𝐞
The Taxpayer entered into several SPAs between 2010 and 2013 for the sale of lands that were intended to be subdivided in the future. The Taxpayer claimed that only deposit payments had been received from the purchasers and accordingly declared and paid tax for the Years of Assessment 2011 to 2015 based on the amounts actually received. Following a tax audit, the Director General of Inland Revenue (DGIR) took the position that the income reported by the Taxpayer was incorrect because it did not reflect the full disposal price stated in the SPAs. Additional assessments were therefore raised by the DGIR.

𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐭𝐚𝐱𝐩𝐚𝐲𝐞𝐫
The Taxpayer argued that Section 24(1)(a) of the Income Tax Act 1967 only determined the timing of when gross income accrued and should not apply until the SPAs became fully effective. According to the Taxpayer, the SPAs were still subject to conditions precedent because the master title had not yet been subdivided. As such, the Taxpayer contended that the unpaid balance under the SPAs should not yet be treated as taxable income until all contractual conditions had been fulfilled.

𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐋𝐇𝐃𝐍
The DGIR maintained that Section 24(1) of the Income Tax Act 1967 is a specific provision dealing with disposal of stock in trade and applies even if the disposal price has not been fully paid. LHDN argued that once the SPAs were executed, the unpaid balances became “debt owing” to the Taxpayer and therefore formed part of the taxable gross income. The DGIR further contended that the Taxpayer’s reliance on the “condition precedent” principle to defer taxation to later years was legally incorrect.

𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐨𝐮𝐫𝐭
The Special Commissioners of Income Tax (SCIT) dismissed the Taxpayer’s appeal on 30 May 2025 and held that the Taxpayer had failed to discharge the burden of proof under Paragraph 13, Schedule 5 of the Income Tax Act 1967. The SCIT agreed with the DGIR’s position that the full disposal price under the SPAs should be recognised for tax purposes despite outstanding payments. However, the SCIT also ruled that the DGIR had no legal basis to impose penalties under Section 113(2) of the Income Tax Act 1967 against the Taxpayer.

This case serves as an important reminder that businesses involved in property and land transactions should carefully assess the timing of income recognition and the tax implications of contractual arrangements, especially where payments are deferred or subject to future conditions.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, and tax planning matters for you. Feel free to WhatsApp us at 010-246 2151.

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Our Services: CFO Advisory | Financial Operations Support | Taxation | Payroll | Corporate Secretarial | e-stamping | e-invoice Training

Many business owners assume that once the company makes money, they can take out dividends whenever they like. Under the Companies Act 2016, that assumption is wrong and acting on it can result in serious criminal liability.

Section 131 of the Act is clear. A company may only distribute dividends to its shareholders out of profits, and only if the company is solvent at the time of the distribution. Solvent, as defined in Section 132(3), means the company is able to pay its debts as and when they fall due within 12 months after the distribution is made. This solvency test must be satisfied before any distribution is authorised.

Under Section 132(1) and (2), it is the directors who must authorise each distribution, and they may only do so if they are satisfied that the solvency test is met. If a director authorises or allows a dividend to be paid when the company is not solvent, or when there are insufficient profits, they commit a criminal offence under Section 131(2) and face imprisonment of up to five years or a fine of up to RM3 million, or both.

The situation can get worse. Section 133 gives the company the right to recover the dividend from the shareholder who received it, if the payment was improper, unless the shareholder received it in good faith without knowing the company failed the solvency test. In other words, money already paid out can be clawed back.

This is especially relevant for small private companies where the director and the shareholder are the same person. Many owners treat the company account as a personal piggy bank. This is not only poor financial discipline, it is legally dangerous.

Before declaring any dividend, make sure the company's financial position is properly assessed and documented.Our CFO Advisory team manages registered office services and ensures all your statutory records are properly maintained and always audit-ready. To find out how we can support your business, WhatsApp 010-246 2151.

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Our Services: CFO Advisory | Financial Operations Support | Taxation | Payroll | Corporate Secretarial | e-stamping | e-invoice Training

A recent High Court decision involving Tune Talk provides an important clarification on the treatment of service tax for income tax purposes. This case highlights a common area of misunderstanding and offers practical guidance for businesses.

1️⃣The Core Issue
The taxpayer sought to claim service tax paid to the Royal Malaysian Customs Department as a deductible expense under Section 33(1) of the Income Tax Act 1967.

The basis of the claim was that the service tax had been absorbed by the business and was incurred in the course of carrying on the business, and should therefore qualify as a deduction.

2️⃣Position of the Inland Revenue Board and the Court
The Inland Revenue Board rejected the claim. The High Court upheld this position. The reasoning is important:
* Service tax is legally imposed on the customer
* The business acts as a collecting agent on behalf of the authorities
* As a result, the payment does not qualify as an expense incurred wholly and exclusively in the production of income

3️⃣Practical Implications for Businesses
This decision has direct implications for how businesses should treat service tax:
* Absorbing service tax on behalf of customers does not automatically make it a deductible expense
* The legal character of the payment takes precedence over its commercial treatment
* Even if the cost is borne by the business in practice, it may not qualify for tax deduction

Conclusion
This case reinforces a fundamental tax principle. Not all payments made in the course of business operations qualify as deductible expenses. The legal nature and obligation underlying the payment remain the determining factors.

📁 Download tax case: https://august.short.gy/AI

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🌙✨ *NOTIS CUTI HARI RAYA AIDILFITRI* ✨🌙

Dimaklumkan bahawa firma kami akan bercuti sempena Hari Raya Aidilfitri bermula:

📅 *20 Mac 2026 (Jumaat)*
hingga
📅 *28 Mac 2026 (Sabtu)*

🗓️ Firma akan kembali beroperasi pada:
*29 Mac 2026 (Ahad)*

Segala kesulitan amat dikesali dan kami mengucapkan terima kasih atas sokongan anda.

🌟 *Selamat Hari Raya Aidilfitri*🌟
Maaf Zahir & Batin

*Ikhlas daripada,*
*BURHANUDDIN & ASSOCIATES*

𝗟𝗛𝗗𝗡 𝗜𝘀𝘀𝘂𝗲𝘀 𝗡𝗲𝘄 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀: 𝗧𝗮𝘅 𝗧𝗿𝗲𝗮𝘁𝗺𝗲𝗻𝘁 𝗼𝗻 𝗜𝗻𝗰𝗼𝗺𝗲 𝗼𝗳 𝗦𝗼𝗰𝗶𝗮𝗹 𝗠𝗲𝗱𝗶𝗮 𝗜𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲𝗿𝘀

LHDN has issued official Guidelines on the Tax Treatment of Income of Social Media Influencers, applicable to income from YA 2024 onwards (issued January 2026).
If you earn from social media, this applies to you.

𝗪𝗵𝗼 𝗜𝘀 𝗖𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗲𝗱 𝗮𝗻 𝗜𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲𝗿
• Individuals with influence on social or digital platforms
• Content creators, professionals, athletes, artists, students and homemakers
• Includes object-based influencers (e.g. animated characters) — tax is charged to the owner

𝗧𝘆𝗽𝗲𝘀 𝗼𝗳 𝗧𝗮𝘅𝗮𝗯𝗹𝗲 𝗜𝗻𝗰𝗼𝗺𝗲
• Payments from platforms (YouTube, Instagram, TikTok, etc.)
• Brand ambassador fees and paid reviews (cash and non-cash)
• Free products, services, vouchers and benefits — must be declared at market value
• Sale of goods (physical and digital)
• Royalties from characters or images
• Appearance fees, talks, seminars and events

𝗜𝗻𝗰𝗼𝗺𝗲 𝗳𝗿𝗼𝗺 𝗢𝘃𝗲𝗿𝘀𝗲𝗮𝘀 𝗣𝗹𝗮𝘁𝗳𝗼𝗿𝗺𝘀
• Income from foreign platforms (e.g. Google AdSense) is taxable in Malaysia
• Overseas filming or campaigns are taxable if the influencer is based in Malaysia
• Applies where income is linked to influencer activities performed in or from Malaysia

𝗔𝗹𝗹𝗼𝘄𝗮𝗯𝗹𝗲 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀
• Internet and data costs (business portion only)
• Filming, editing and content production costs
• Capital allowances on qualifying business equipment (Schedule 3 ITA)

Note: Personal or capital expenses are not deductible

𝗧𝗮𝘅 𝗥𝗲𝘀𝗽𝗼𝗻𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝗶𝗲𝘀
• CP500 instalment payments may apply
• Proper records of income and expenses must be kept
• Supporting documents must be retained for 7 years

📍Download guideline:https://www.hasil.gov.my/media/vtllnhxu/20260114-guidelines-tax-treatment-on-income-of-social-media-influencer.pdf

𝗙𝗼𝗹𝗹𝗼𝘄 𝗢𝘂𝗿 𝗪𝗵𝗮𝘁𝘀𝗮𝗽𝗽 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://whatsapp.com/channel/0029Vb8EDWHBKfhzGpiHA90c

𝗙𝗶𝗻𝗱 𝗢𝘂𝘁 𝗠𝗼𝗿𝗲 𝗔𝗯𝗼𝘂𝘁 𝗢𝘂𝗿 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀: https://augustadvisory.taplink.ws

𝗢𝘂𝗿 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀: CFO Advisory | Financial Operations Support | Tax & Payroll | Cosec | Business Training

LHDN Amendment To:
Specification For Monthly Tax Deduction (Mtd) Calculations Using Computerized Calculation For 2026 🔥


This amendment provides clarification in relation to Budget 2026. Amendments for computerized calculation method of Monthly Tax Deduction (MTD) 2026 are as follows:
1. Expansion of tax relief for medical treatment expenses - vaccination expenses
2. Expansion of tax relief on medical treatment, special needs and carer expenses for parents / grandparents
3. Review of tax relief for child care fees paid to a registered child care centres / kindergartens for a child aged 6 years and below
4. Review of tax relief for premium of life, education and medical insurances
5. Increase tax relief for medical treatment expenses on early intervention programmes or rehabilitation treatment for children with learning disabilities
6. Expansion on individual income tax relief for expenses on admission fees to tourist centres and cultural programmes
7. Expansion of tax relief for income tax relief for environmental sustainability and home safety-related expenditure




👉 This booklet is to provide guideline and MTD verification procedure for software provider or employers who developed or customized their payroll system.

👉 To download, please click at below link:
https://www.hasil.gov.my/media/arvlrzh5/spesifikasi-kaedah-pengiraan-berkomputer-pcb-2026.pdf

Panduan Pematuhan & Audit e-Invois Kini Tersedia: Ini Yang Pembayar Cukai Perlu Tahu

Pelaksanaan e-Invois oleh LHDN dibuat secara berperingkat bermula 1 Ogos 2024, langkah besar untuk memodenkan pentadbiran cukai, mempercepat pengesahan transaksi, dan menyokong ekonomi digital selaras fokus RMKe-12.

Melalui e-Invois, transaksi boleh disahkan hampir serta-merta dan direkodkan sebagai rujukan bagi urus niaga B2B, B2C dan B2G.

Kini, LHDN menerbitkan Rangka Kerja Semakan Pematuhan e-Invois (RKe) yang membantu pembayar cukai (individu & perniagaan) memahami hak, proses, dan apa yang akan berlaku jika semakan/audit dibuat selepas e-Invois dilaksanakan.

Apa tujuan RKe?

RKe menerangkan dengan jelas peranan dan tanggungjawab tiga pihak:
Pegawai Pematuhan e-Invois LHDN (PEI), pembayar cukai, dan ejen cukai.

Secara ringkas, RKe bertujuan untuk:
• membantu pegawai PEI menjalankan semakan dengan lebih cekap,
• memastikan pembayar cukai faham proses pematuhan dan tanggungjawab mereka,
• menegaskan hanya ejen cukai berdaftar boleh mewakili pembayar cukai,
• membantu ejen cukai faham skop tugas mereka dalam proses pematuhan.

Semakan e-Invois: LHDN akan maklum 14 hari lebih awal

Untuk pematuhan e-Invois, LHDN menggunakan kaedah semakan menyeluruh (bukan semakan umum).

Berita baik: pembayar cukai akan dimaklumkan sekurang-kurangnya 14 hari sebelum lawatan melalui Surat Pemberitahuan Lawatan Semakan Pematuhan atau emel.

Makluman itu biasanya akan nyatakan:
• tarikh lawatan,
• senarai rekod yang perlu disediakan,
• tahun taksiran/tempoh rekod terlibat,
• nama pegawai PEI,
• jangka masa lawatan.

Semakan boleh dibuat di premis pembayar cukai atau lokasi lain yang dipersetujui.

Dokumen yang biasanya diminta semasa semakan

Antara rekod penting yang perlu disediakan:
• invois jualan, resit jualan & dokumen berkaitan jualan,
• invois belian, borang pesanan & dokumen berkaitan belian,
• rekod nota debit, nota kredit & nota bayaran balik,
• dokumen sumber lain berkaitan invois.

Kalau dokumen perniagaan tak lengkap, semakan boleh dibuat melalui rekod sokongan lain seperti:
• penyata bank persendirian,
• senarai milikan aset,
• dokumen sokongan yang berkaitan.

Hak pegawai LHDN semasa semakan e-Invois

Pegawai PEI LHDN dibenarkan menyemak dan memadankan rekod seperti:
• rekod kewangan syarikat/perniagaan,
• lejar transaksi, baucar bayaran,
• penyata bank,
• transaksi e-Invois (invois, nota debit, nota kredit, nota bayaran balik).

Jika rekod disimpan secara elektronik, pegawai PEI juga boleh:
• mengakses komputer, server atau peranti berkaitan,
• memuat turun data perakaunan ke media simpanan (contoh: pendrive, cakera keras mudah alih, dll).

Maksudnya mudah: bersedia dari awal dan beri kerjasama ikut saluran betul, itu yang paling memudahkan proses.

Boleh tangguh lawatan semakan?

Boleh. Jika surat pemberitahuan sudah dikeluarkan tetapi anda belum bersedia, anda boleh mohon penangguhan atas alasan yang munasabah dan tidak dapat dielakkan.

Untuk pengesahan dan urusan rasmi, pembayar cukai boleh hubungi:
• Pengarah Operasi Negeri (Seksyen e-Invois & Audit Majikan), atau
• Pengarah Bahagian Cawangan Khas LHDNM yang berkenaan.