TAG Tax


The 2019 Budget was unveiled by the Finance Minister, Lim Guan Eng, on 2 November 2018 and was passed by the Dewan Rakyat on 6 December 2018. The theme of the Budget was “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society”. In this article, we brief our readers on the highlights of the Budget 2019.

TAX

The Goods and Services Tax is zero-rated and has been replaced with the Sales and Services Tax (SST) on 1 September 2018. The Government, starting from 1 January 2019, will grant exemptions for specific business-to-business transactions between service tax registered persons. Imported services will also be subjected to service tax.

Online services such as downloaded software, music, video or digital advertising of foreign service providers will be required to register with the Royal Malaysian Customs and thereafter charge and remit the relevant service tax. A credit system for sales tax deduction will be introduced to assist small manufacturers who purchase manufacturing inputs from importers instead of other registered manufacturers.

Read more: The 2019 Budget… Briefly


The fiscal problem in relation to the transfer pricing is one of the main concerns of the companies, and especially for the importance that the Tax Agencies award to this issue. Bufete Escura has prepared and published a Transfer Pricing Guide.

In this document the following matters are explained:

  • What is related-party legislation
  • Whom it obliges
  • What happens if related-party transactions are not documented
  • How to prepare the operations’ documentation
  • Transaction documentation files
  • Tax management

View the Guide: “Transfer Pricing: Document your Related-Party Transactions”.


Author: Jeffrey Davine

The IRS has in a recent news release (IR-2019-23) reiterated its warning that individuals who owe federal taxes may not be able to renew their passport or obtain a new passport.

As we recently reported, taxpayers who have a “seriously delinquent tax debt” may be prevented from obtaining a new passport or renewing a current passport. This means that, if someone owes taxes to the federal government, he or she might be unable to travel outside of the U.S.

In 2015, Congress passed a law known as the Fixing America’s Surface Transportation Act (“FAST”). FAST added Section 7345 to the Internal Revenue Code. This provision authorizes the IRS to disclose tax information to the State Department with respect to taxpayers who owe the IRS more than $50,000. This figure is adjusted annually for inflation, and is $52,000 for 2019. After receiving this information, the State Department may revoke, deny, or place limitations on, the delinquent taxpayer’s passport.

Read more: DON’T LET THE IRS YANK YOUR PASSPORT


Multinational enterprises (“MNEs”) with premises or operations in Uruguay must submit to the Tax Office a Country-by-Country report (“the CbC report”) along the OECD guidelines. Such report must contain detailed information on the branches and other MNE related entities around the world. Due date is 31 March 2019.

Read more: Country-by-Country Report in Uruguay: Its Implementation Will Begin Soon


This Legal Update marks Part Three, and our final installment of the three-part series, Navigating the Post-Wayfair world. In Part One, we discussed how states have responded to the Supreme Court's landmark sales and use tax decision, South Dakota v. Wayfair, Inc. In Part Two, we illustrated how Wisconsin has responded to the Court's decision. In Part Three, we offer practical advice for businesses navigating the post-Wayfair world.

Read more: Navigating the Post-Wayfair World Part Three: Practical Advice & Tangible Next Steps