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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