Payments to settle tax payable after tax return fillings

After tax return filling, payment to settle tax payable may also have some regular procedure which you may perhaps not know, which they are:-


A.For corporate:-

1.Payment to settle tax payable should be send together with form CP207,
2. Where endorsement of check should include:
   a.Name of Tax payer
   b.Tax reference number
   c.Year of assessment under review
   d.Correspondent address

What you may do is:-

1.Prepare a cover letter for such payment
2.Do type on/fill ups required info on CP207
3.Check/ Write the endorsement for client as:-
   a.Client's name (name of tax payer)
   b.Tax reference number
   c.Year of assessment under review
   d.A c/o stamp (stamp which enclose your firm's name and address)

B.For individual:-

1.Payment to settle tax payable should be send together with form which attached on the last pages of your form,
   Form e-BE,e-B,e-M do included such page and you can print the last page of the finalized copy after submission.
2. Where endorsement of cheque should include:
   a.Name of Tax payer
   b.Tax reference number
   c.Year of assessment under review
   d.Correspondent address

What you may do is:-

1.Prepare a cover letter for such payment
2.Do type on/fill ups required info on last page of the finalized form
3.Check/ Write the endorsement for client as:-
   a.Client's name (name of tax payer)
   b.Tax reference number
   c.Year of assessment under review
   d.A c/o stamp (stamp which enclose your firm's name and address)

Different Between Submitted Form & Form in Approval Letter

Recently I have been ask "How do I know which form is submitted copy (for bound copy) and which form is for approval letter (tax return agreement) , they all are just looks no different...o.0???"

A numbers of people would not realize that when they are new to those physical/reality document.
Here I enclose some simple skills for you to know immediate which pages and which paper in your hand is
1.Approval letter (tax return agreement) attachment , or
2.Submitted copy (for bound copy) attachment.

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A. In Corporate Cases (Form e-C & Form e-R) :-

The point to differentiate of :-
1.Approval letter (tax return agreement) attachment

You will found the word "Draft" on top of each pages, which it would be shown as:-

Where for :
2.Submitted copy (for bound copy) attachment.
 It would be a finalized pages that with clean pages heading :-

 ========================================
 B. In Individual Cases (Form e-B/e-BE/e-M) :-


The point to differentiate of :-

1.Approval letter (tax return agreement) attachment
 You will found the word "Draft" on bottom of each pages (beside the page number), which it would be shown as:-

Where for :

2.Submitted copy (for bound copy) attachment.
 It would be a finalized pages that with clean pages footnotes :-

 ========================================

 Hopes this could let you differentiate the messy pages in your hand...

 [Note: you can click on each picture to view them clearly]

Step 3 Further Info Request (or so call tax queries)

Refer to the Detail income statement from our example:-

For my practice, I will normally first do the tax computation, plug in the figure and item into the tax computation then analysis on the non appeal item.

I)  First try to put title for each of the item on Note to computation,
II) Leave the unclear point empty, or do highlight/ change the front colour into red so that u will not forget that is unprintable
III) starting from the top and follow sequence,

1) Entertainment - RM 1,000

[An entertainment expense that is wholly and exclusively incurred in the production of

gross income under subsection 33(1) of the ITA is not allowed a deduction of fifty

percent (50%) unless the entertainment expense falls within any of the specified

categories in proviso (i) to (viii) of paragraph 39(1)(l) ITA, then it qualifies for a

deduction of one hundred percent (100%).][Further detail pls refer to PR 3/2008]

if you do have the previous year tax computation, you will have approximate idea on what the expenses normally incurred, how was the company practice from previous, how your presentation should be.

if you have no idea on them, do refer to PR 3/2008, get your idea to know the tax treatment for entertainment expenses, what is the definition for entertainment (Sec 18 ITA).

then mark on your income statement whether your ITC have leave a space for your 1.Entertainment
then mark again for your Tax Queries. [ for me, sign "X" is non deductible eg. Depreciation, "/"have settle, "O" pending, " - " for Nil on current year.

==========================================================

with the same detail income statement (From business income generate unit cases) you can see how the Note to ITC,
thus, I will only show u TQ here :-

Type 3 - Business income generate unit - (common case)

For the business generate unit cases, I could only showing you a simple example here but I’ll try to make it as complete as possible.

Let’s look back to the detail income statement assumption:-

From the first moment you look into the detail income statement, you may start to suspect, eg. What the 2.General Expenses contain, what nature 1.Entertainment incurred for? Basically non of your senior could sure what they are before asking from the client, thus the procedure [Step 3 Further Info Request (or so call tax queries)] may raised before they finalize the draft income tax computation for such year of assessment. [For further detail, please refer to the mentioned topic.]

Here we may have the Page [A1] - COMPUTATION OF ADJUSTED BUSINESS INCOME

Next, Page [Notes] - ANALYSIS OF INCOME STATEMENT ITEMS (NOTES TO COMPUTATION)

Finally come back to cover Cover Page [ABC/YA2010] - Summary of Tax Liability

THAT THE WHOLE SET OF TAX COMPUTATION FOR A YEAR OF ASSESSMENT

Investment holding - (charge under 60F/ 60FA)

Step 2 Income Statement  
2) Investment holding - (charge under 60F/ 60FA)
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For Type 2 - Investment holding - (charge under 60F/ 60FA)

An investment holding company (IHC) means a company whose activities consist mainly in the holding of investments and not less than 80% of its gross income (whether exempt or not) other than gross income from a source consisting of a business of holding of an investment is derived from the holding of those investments. [subsection 60F(2) of the ITA ]

Further detail please refer to Public Ruling 3/2011 

3.Detail Income Statement
					2010			2009
	Income
	Rental Income				900,000			900,009
Less:	Agency fees				(18,000)			(18,009)
	Assessment and quit rent				(6,000)			(6,009)
	Maintenance charges				(15,000)			(15,009)
	Sinking fund				(1,500)			(1,509)
	Maintenance and repairs				(20,000)			(20,009)
	Fire insurance				(4,000)			(4,009)
	Term loan Interest				(120,000)			(120,009)
	Water and electricity				(3,000)			(3,009)
	Gas Installation				(888)			0
					711,612			712,437
	Interest income				1,000			999
					712,612			713,436
	Administrative expenses				RM
1	Entertainment				1,000			1,009
2	General Expenses				200			209
3	Bank Charges				30			39
4	Subscription				4,000			4,009
5	Electricity & Indah Water				5,000			5,009
6	Insurance				6,000			6,009
7	Medical Expenses				7,000			7,009
8	Office Cleaning				8,000			8,009
9	Printing & Stationery				900			909
10	Postage & Courier				10,000			10,009
11	Petrol				11,000			11,009
12	RoadTax & Insurance				12,000			12,009
13	Maintanance of Motor Vehicle				13,000			13,009
14	Maintenance of Office Equipment				14,000			14,009
15	Rental				150,000			150,009
16	Service Charge - Maintenance				16,000			16,009
17	Salary				170,000			170,009
18	EPF				18,000			18,009
19	SOCSO				19,000			19,009
20	Staff Amenities				20,000			20,009
21	Traveling				21,000			21,009
22	Training				22,000			22,009
23	Telephone				23,000			23,009
24	Depreciation				24,000			24,009
25	Consultancy Fees
	- Audit Fee				6,450			6,451
	- Accounting fee				6,300			6,302
	- Secretaries fee				6,250			6,253
	- Tax Agent fee				6,000			6,003
					575,130			575,346
	Profit for the year				136,482			137,091

 

Assume this statement extract from Investment Holding. (Note: Usually business activities would be shown in note 1 to financial statement in audit report). You would take concern only on “permitted expenses” of the item above. Permitted expenses incurred by an IHC consist of:

·         directors’ fees;

·         wages, salaries and allowances;

·         management fees;

·         secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage; and

·         rent and other expenses incidental to the maintenance of an office.

Where from the Detail Income Statement you may extract:

9	Printing & Stationery
10	Postage & Courier
17	Salary
18	EPF
19	SOCSO
20	Staff Amenities
23	Telephone
25	- Audit Fee
25	- Accounting fee
25	- Secretaries fee

And you will apply them into your ITC’s page – [Note1] – Note to Computation

Mean while, adjust the rental income in Page [B5b] - Calculation of Statutory Income

 

Finally the cover page [ABC/YA2010] - Summary of Tax Liability

 

[Note: Note to computation should be shown base on information analysis]

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