accounting for tax - its management sdn bhd · business goods (e.g. furniture, tableware,...
TRANSCRIPT
GST SEMINAR:
Accounting For Tax
Melaka
Briefing Agenda
1. Charging Output Tax
2. Entitlement of Input Tax
3. Apportionment Rules
4. GST Adjustments
5. Taxable period
6. Submission of GST Return
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1
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Business
Goods (e.g.
furniture,
tableware,
television)
Services ( e.g.
loan of mould
INPUT OUTPUT
GST on inputs
= Input taxClaimed
input tax
GST on outputs
= Output tax
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Goods (raw materials,
machines and other
goods)
Services (rental
telephone and
insurance)
Utilities
(electricity and
water)
Input tax and Output tax
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Scope and charge
• GST is charged on
the taxable supply of goods and services
made by a taxable person
in the course or furtherance of business
in Malaysia
• GST is charged on imported goods
Output Tax
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GST charged on taxable supplies (sales of goods or
services) deemed supplies
disposal of business assets private use of business asset imported services goods sold in satisfaction of a debt gifts costing more than RM 500
Output Tax
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Supplies which may not be subject to GST cash donation or grants where a person does not get
benefits
compensation or liquidated damages
disbursements, dividends, loan repayments orcapital injection
transfer of going concern
contribution to pension, provident or social securityfund
supplies by any society or similar organization
supplies excluded from input tax credit (exemptsupply)
Output Tax
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Issuance of Tax Invoice
Types of tax invoice when making
taxable supplies
full tax invoice
simplified tax invoice
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e-Business Sdn Bhd No. 0071000 Jalan Tipu, Bandar Reka
Negeri Sembilan
GST No. : 01234567
No. Tel. : 06-7915566
TAX INVOICEInvoice Date : 7 th. July, 2015
Invoice to:- Send to:-
SYARIKAT ABC SYARIKAT ABC
Jalan 5/6, Kelana Jaya
Selangor
Date Your Order Our Order Sales Rep.
30th. June, 2015 1123 123 ABC RAMBO
No. Item Unit Description Discounts Taxable Unit Price (RM) Total Price (RM)
1. 117711 10 Box - 6% 100 1,000
2. 117712 100 Pencils - 6% 1000 100,000
Subtotal 101,000
Discount 1,000
Subtotal 100,000
CONFIRMATION BY 30 DAYS GST 6% 6,000
E.OE SIGNATURE ……………………………………………. Total 106,000
The total amount payable excluding tax, the rate of tax and the total tax chargeable shown as a separate amount.
The total amount payable including the total tax chargeable
Date of invoice
Serial number
Supplier, name,
address & Identification
number
The words “tax invoice”
in a prominent
place
Name and address of
person being supplied
Sufficient description
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Syarikat Pemaju Hartanah Sdn Bhd Tax Invoice No. 00779Lot 123, Jalan Meru, 43120 Klang
Selangor
GST No. : 0001111
No. Tel. : 03-67868686
TAX INVOICEInvoice Date : 7 th. July, 2016
Invoice to:-
SYARIKAT MANA DIA
Jalan 7/7, Ipoh
Perak
No. Description Quantity Unit Price (RM) Total Price (RM)
1. Shop houses (6% GST) 2 350,000 700,000
2. Double story terrace
houses (exempt)
10 250,000 2,500,000
Subtotal 3,200,000
Add GST @ 6% 42,000
Total Sales 3,242,000
……………………………………………………..
SYARIKAT PEMAJU HARTANAH SDN BHD
Serialized
tax invoice
number
Date of
invoice
Total
charge
made
excluding
GST
Total
charge
made
including
GST
Quantity of goodsDescription of
goods supplied
Name,
address of
supplier
GST
Registration
number
Name,
address of
customer
TAX
INVOICE
in a
prominent
place
Rate of GST
Example of Tax Invoice for Mixed Supplies
No. Item Units Description Unit Price Total
1 2022 1 Plasma TV Somy 56
inches
8999.00 8999.00
Price 8999.00
Discount 500.00
Subtotal 8499.00
Price inclusive of GST 6% (RM509.94) Total 9008.94
Issued by : juali
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Supplier Identification
Date of invoice
The total amount payable including
tax
Sufficient description
C SERVICES & TRADING GST REG. 1234-567
30, Jalan 37, Taman Awam Phone : 03-87066078
BANDAR BARU SALAK JAYA Fax : 03-87066079
43900 SEPANG E-mail : [email protected]
CASH SALE
Invoice No : 11209
Date : 12.11.2015
Other Examples of Tax Invoice
AGRO SHOPPING CENTRE SDN BHD
DESA PINGGIRAN PUTRA, SG. MERAB
TEL: 03 – 8896XXXX FAX: 03 – 896XXXX GST Reg. No :
…………………
Date: 30/3/2016 15:35:45
Invoice No: V001619
BISCUITS PNKL [PACK] 1 3.90 3.90 S
010611
PRINGLES SC 182G [PCS] 1 6.90 6.90 S
001002
SUGAR 2 1.45 2.90 Z
123235
Item Count 4
Total Sales Inclusive GST @ 6% 14.35
Rounding Adjustment 0.00
Cash 15.00
Balance 0.65
GST analysis Goods Tax
S = 6% 10.80 0.65
Z = 0% 2.90 0.00
Print : 30/3/2016
Salesperson : Aminah
Date of Tax Invoice
Supplier’s name, address and GST identification number
Total amount payable including GST
Description of goods or services supplied
Tax invoice serial number
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Indicator for zero rated supply
Indicator for standard rated supply
Rate of GST
Total amount of GST charged
SIM
PL
IFIE
D T
AX
IN
VO
ICE
(TA
XA
BL
E S
UP
PL
IES
–2
ra
tes
)
2
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Allowable Input Tax
Supplies
taxable supplies
standard rated or zero rated supplies
disregarded supplies (supplies within group, supplies
made in warehouse, supplies between venture operator
and venturers and supplies between toll manufacturer
and overseas principal)
supplies made outside Malaysia which would be taxable
supplies if made in Malaysia
any other prescribed supply (Fixed Input Tax Recovery)
Purchase
clothes
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Supplies Made Outside Malaysia
issue
invoices
Supplies
clothes
A
B
C
Operational
Headquarters
Factory
Inputs:
office
rental,
utilities,
office
furniture
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Fixed Input Tax Recovery
Input tax
based on
fixed rate
computer,
commercial
buildings, office
furniture
utilities, audit ,
telecommunication
security services,
Recovery
Exempt
supplies
(business)
Exempt
supplies
(non
business)
Taxable
supplies
(fee based
services)
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Allowable Input Tax
Incidental exempt financial supplies:
deposit of money
exchange of currency
holding of bonds or other debt securities
transfer of ownership of securities
provision of loans, advance or credit to employees or
connected persons
assignment of provision of trade receivables
holding or transfer of trust unit
hedging of interest, commodity, utility or freight risk
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Incidental Exempt Financial Supplies
Special tax treatment does not apply to:
banks
development financial institutions or money
lenders
insurance company
stock or futures brokers
pawn broker or hire purchase companies
debt factor or credit or debit card companies
investment or unit trust or venture capital company
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Input Tax Credit
Input Tax Mechanism
Tax paid on inputs to be offset against the output tax in the
relevant taxable period
Subject to a time limit of 6 years from the date of return
required to be made
Apportionment rule to apply for a mixed supply
Refund to be offset against other unpaid GST, customs and
excise duties
Net tax to be refunded within
14 working days for on-line submission
28 working days for manual submission
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Conditions:
Claimant must be a taxable person
Must have a valid tax invoice full tax invoice
simplified tax invoice - claim the input tax up to a limit of RM30.00 if name and addressof recipient is not stated in invoice (GST at 6%)
invoice issued by approved person under Flat Rate Scheme
Customs No 1 /Customs 9 (imported goods)
document to show claimant pays imported services
Invoice issued under the name of the claimant
Goods and services acquired are not subject to any inputtax restriction e.g., motorcars
Good and services are acquired for the purpose of makingtaxable supply
Input Tax Credit
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Non Allowable Input Tax
Blocked input tax
passenger motor cars including hiring of car
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Blocked Input Tax
Family benefits
any benefits (including hospitality of any kind) provided
by the taxable person for the benefit of any person who
is the wife, husband, child or relative of any person
employed by the taxable person for the purposes of any
business carried on or to be carried on by the taxable
person
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Club subscription fee
any joining fee, subscription
fee, membership fee, transfer
fee or other consideration
charged by any club,
association, society or
organization established
principally for recreational or
sporting purposes or by the
transferor of the membership
or such club, association,
society or organization
Blocked Input Tax
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medical and personal accident insurance
Blocked Input Tax
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Medical expenses
any medical expenses in
connection with the provision of
medical treatment to any person
employed by a taxable person
Blocked Input Tax
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Entertainment expenses
ClientsPotential
clients
Spouse
or family
members
Employees
Blocked Input Tax
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Apportionment Rules
No apportionment if can attribute wholly
full input tax if wholly attributable to taxable
supplies
no input tax if wholly attributable to exempt
supplies
Apportionment rules
applicable when goods and services areused for both taxable and non-taxablesupplies
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Claim 100%
input tax
Inputs
used
Attributable to
both taxable and
exempt supplies
Wholly attributable
to taxable suppliesWholly attributable
to exempt supplies
Apportionment
rules apply
Cannot claim
input tax
Apportionment Rules
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Mechanism for input tax apportionment
Turnover-based method as a standard method forapportioning any residual input
round up or down to the nearest two decimalplaces
Value of taxable supplies
Value of all supplies Taxable portion =
Input tax claimable = Taxable portion X Residual input tax
Apportionment Rules
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RESIDUAL INPUT TAX
input tax that is attributable to making both
taxable and exempt supplies
Eg. A train company that supplies both taxable supply ie.
freight services and exempt supply ie. passenger
transportation.
Apportionment Rules
INPUT TAX ATTRIBUTED TO :- TYPES OF INPUTS
Taxable supply – freight services Repair service to the freight coach or wheels
Exempt supply – passenger
transportation
Train seats, television, curtains, bunks, etc.
Both supplies (taxable and exempt) Electricity, water, maintenance services,
telecommunication services
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Example:
Taxable supplies = RM300,000
Exempt supplies = RM250,000
Residual input tax = RM8,000
RM300,000
RM300,000 + RM250,000Taxable portion =
= 54.5454%
= 54.55% (2 decimal places)
Input tax claimable = 54.55% X RM8,000
= RM4,364
Apportionment Rules
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Standard method
must reflect correct proportion to which the inputs areput to use
if does not reflect correct proportion, use alternativemethods
floor space method
transaction based method
input base method
cost centre accounting method
employee time method
use of alternative methods requires prior approval
Apportionment Rules
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Example:
A finance company Arus Sdn Bhd. deals in taxable leasing and
exempt personal loans services. The value and number of
transaction of taxable and exempt supplies are as follows:
ActivitiesNo. of
Transactions% Value (RM) %
Leasing agreements
entered into75 60 750,000 42.9
Personal loans
entered into50 40 1,000,000 57.1
TOTAL 125 100 1,750,000 100
Apportionment Rules
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De Minimis Limit
Exempt input tax can be recovered in full if the total value of
exempt supply is less than a prescribed amount
Prescribed amount
total value of the exempt supplies does not exceed
an average of RM5,000 per month and
not exceeding 5% of the total value of total supplies (all
taxable and exempt supplies) made in that period
Example:
Factory provides transport (workers bus) to his workers for a charge
Apportionment Rules
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De Minimis Limit
Example 1 :
A manufacturing company provides bus
transportation to its workers and charges them.
Activity Taxable Exempt %
Value (RM) 150,000 4,000 2.6
Full recovery of input tax allowed
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Example 2 :
A manufacturing company provides bus
transportation to its workers and charges them.
Activity Taxable Exempt %
Value (RM) 500,000 10,000 2.0
Full recovery of input tax are not allowed, have to
apply apportionment rule on ITC
Residual Input Tax
Taxable Supplies
Exempted Supplies
ITC Claimable Total Input Tax
RM500 RM500,000 RM10,000 98% RM490.00
De Minimis Limit
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Adjustments to input tax and output tax when the taxable person receives debit notes or issues
credit notes
payment not received after 6 months (bad debts)
debtor has become insolvent before expiry of 6 months
payment not made for supply after six months
change of use of assets (from exempt to taxable)
change of accounting basis (e.g., payment basis toinvoice basis)
annual adjustment for mixed supplier
Capital Goods Adjustment for mixed supplier (change inthe proportion of use)
Adjustments
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Adjustments due to credit note issued credit note is issued when the amount
previously invoiced is reduced or a transactionis cancelled
supplier, already accounted for output tax,reduces output tax in the return for the taxableperiod in which the credit note was issued
buyer, already claimed input tax, reduces inputtax in the return for the taxable period in whichhe received the credit note
Adjustments – Credit note
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Example :
Goods sold on 20.1.16 by company A to company B, amount RM1,000 plusGST 6%. Goods returned on 12.2.16 to company A, amount RM210 (inclusiveGST). Credit note issued on 26.2.2016 by company A
Company A (seller) {assuming company is in monthly taxable period}
Output tax: RM1000 x 6% = RM60 (Jan 2016 GST return)
Adjustment to reduce output tax (Feb 2016 GST return)
RM210 x 6/106 = RM11.89
Actual GST paid to Customs is RM48.11
Company B (buyer) {assuming company is in monthly taxable period}
Input tax: RM1000 x 6% = RM60 (Jan 2016 GST return)
Adjustment to reduce input tax (Feb 2016 GST return)
RM210 x 6/106 = RM11.89
Actual input tax claimed by Co. B is RM48.11
Adjustments – Credit note
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Adjustments due to debit note issued
debit note is issued when the amountpreviously invoiced is increased
supplier has to increase output tax in thereturn for the taxable period in which the debitnote was issued
buyer has to increase input tax in the returnfor the taxable period in which he received thedebit note
Adjustments – Debit note
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Example :
Goods sold on 20.1.16 by company A to company B, amount RM1,000 plusGST 6%. Debit note issued on 26.2.2016 by company A for transportationcharges for delivery of the goods, amount RM105 (inclusive of GST).
Company A (seller) {assuming company is in monthly taxable period}
Output tax: RM1000 x 6% = RM60 (Jan 2016 return)
Adjustment to increase output tax (Feb 2016 return)
RM105 x 6/106 = RM5.94
Actual GST paid {output tax} to Customs is RM65.94
Company B (buyer) {assuming company is in monthly taxable period}
Input tax: RM1000 x 6% = RM60 (Jan 2016 GST return)
Adjustment to increase input tax (Feb2016 GSTreturn)
RM105 x 6/106 = RM5.94
Actual input tax claimed by Co. B is RM65.94
Adjustments – Debit note
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•Definition for Bad DebtThe outstanding amount of the payment in respect
of the taxable supplies including GST which is due
to the person but has not been paid to and is
irrecoverable by the person (SUPPLIER)
•Conditions to claim bad debt reliefGST has been paid
Supplier has not received any payment six months
from the date of supply or the debtor has become
insolvent before the period of six months has
elapsed
Sufficient efforts have been made to recover the
debt.
Bad Debt Relief
Claiming bad debt relief
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1st. May, 2015
Sale of goods
30th. June, 2015
May’15 GST
return
Declaration
31st. October, 2015
Customer still has
not paid
30th. November, 2015
Claiming of bad debt
relief in the October’15
GST return
6 months elapsed
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Adjustments due to bad debts
supplier is entitled to bad debts relief
supplier claims as input tax in the return for the taxable period in which the bad debts are given relief
output tax amount to be claimed back as input tax
where
A1 is the payment not received in respect of the taxable supply
B is the consideration for the taxable supply
C is the tax due and payable on the taxable supply
customer must account as output tax in the return for the taxable period in which the bad debts are given relief
A1
Binput tax = x C
Adjustments – Bad Debts
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Payment not received
ARUS Sdn Bhd made a supply and issued a tax invoice on 5.2.16to RBS Sdn.Bhd for RM21,200 inclusive GST 6% (RM20,000+RM1,200GST). Tax has been accounted by ARUS Sdn Bhd for the month ofFeb. Part payment of RM12,000 (inclusive of GST RM679.25) for thesupply was received on 12.5.16. Balance payment RM 9,200 was notreceived after six months from the date of tax invoice issued. ARUScan claim bad debt relief by accounting as input tax in his Augustreturn.
The claimable bad debt relief is as follows:-
RM 9,200 x RM1,200 = RM 520.75
RM21,200
Adjustments – Bad Debts
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Adjustments due to payment received in respect of bad debts supplier has made the claim for bad debt relief
subsequently customer paid the debt
supplier accounts as output tax in the return for the taxable periodin which the payment is made
output tax amount to account
where
A2 is the payment received in respect of the taxable supply
B is the consideration for the taxable supply
C is the tax due and payable on the taxable supply
A2
Boutput tax = x C
Adjustments – Bad Debts
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Payment received after six months
Please refer to the same example of ARUS Sdn Bhd. Assumingthe customer pays the balance of RM 9,200 (inclusive tax ofRM520.75) on 5.11.2016 (after the expiry of 6 months from thedate of supply).
ARUS must account for output tax calculated as follows:-
RM 9,200 x RM 1,200 = RM 520.75
RM21,200
Adjustments – Bad Debts
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Taxable period
• Regular interval period where a taxable person accounts
and pays GST to the government
• The taxable period will be determined at the time when the
GST registration is approved→quarterly basis
for businesses with annual turnover not exceeding RM5
million
→monthly basis for businesses with annual turnover exceeding RM5 million
• A taxable person may apply to be placed in any othercategory other than his pre-determined taxable period
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Submission of GST Returns
Filing of Returns
GST returns and
payments must be
submitted not later than
the last day of the
month following the end
of the taxable period
Electronic filing is
encouraged
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Submission of GST Returns
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When to submit GST Return monthly taxable period
quarterly taxable period
Submission of GST Returns
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Submission of GST Returns
GST charged on
taxable supplies
GST paid on
business purchases
Net GST
Pay GST to
Government
Refund to
taxable person
Output Tax
less
Input Tax
plus (+)
equal
minus (-)
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Sample of GST Return
Calculation of output tax
• Value of taxable supplies made
• Output tax
Calculation of input tax
• Value of taxable supplies received
• Input tax
Net tax payable/refundable
• GST payable (2 – 4)
• GST refundable (4 – 2)
RM1,000,000 1
RM 60,000 2
RM 600,000 3
RM 36,000 4
RM 24,000 5
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Submission of GST Returns
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Sample of GST Return
Calculation of output tax
• Value of taxable supplies made
• Output tax
Calculation of input tax
• Value of taxable supplies received
• Input tax
Net tax payable/refundable
• GST payable (2 – 4)
• GST refundable (4 – 2)
RM1,000,000 1
RM 60,000 2
RM1, 600,000 3
RM 96,000 4
RM 36,000
5
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Submission of GST Returns
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i) Ketua Setiausaha,
Perbendaharaan Malaysia
Pejabat Pelaksanaan GST
Komplek Kementerian Kewangan,
No.5, Persiaran Perdana,
Pusat Pentadbiran Kerajaan Persekutuan Malaysia,
62596 PUTRAJAYA.
Tel : 03-88823000
ii) GST PORTAL
www.gst.customs.gov.my
iii) Customs Call Centre (CCC)
Tel: 03- 78067200
Fax: 03- 78067599
Email: [email protected]
Comments and Enquiries
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End of Presentation
Thank You
GST Special Task Force UnitRoyal Malaysian Customs Department
Putrajaya
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