CUSTOMS TAX INCENTIVES (EXPEMTION) UNDER SECTION 14.2, CUSTOMS ACT 1967 & SECTION 10.A, SALES TAX ACT 1972

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1 Organised by FMM Institute ( W) Penang Branch CUSTOMS TAX INCENTIVES (EXPEMTION) UNDER SECTION 14.2, CUSTOMS ACT 1967 & SECTION 10.A, SALES TAX ACT February AM 5.00 PM Training Venue: Equatorial Hotel, Penang SBL SCHEME CLAIMABLE FROM PSMB INTRODUCTION The Malaysian government provides various tax incentives for the private sectors to lower their cost of doing business in Malaysia. In particular, industries such as manufacturing, agriculture, tourism, research & development education, environment sectors are thus granted customs tax exemptions as stated under the Acts mentioned above on raw materials, components, machineries & equipment to be imported /purchased locally. These tax incentives would in turn help to lower cost of production & make the products/services more competitive in the global economy.

2 OBJECTIVES Upon completion of the course, participants will be able to : Understand the procedures, guidelines & customs regulations with regards to customs duties exemption Understand the application procedures for customs duties exemption; Help manufacturers, traders & company CEO to plan & make use of the tax exemptions offered by the government; Be able to lower cost of production CONTENTS Introduction Why apply for tax incentives Helps to lower cost of production Increase competitive edge; Benefit consumers Person/persons qualified for exemption Sectors which entitled for exemption An illustration of types of exemption enjoyed by the various sectors Criteria for tax exemption for manufacturing sector Raw materials/components/machinery used directly in the production Non-availability of raw materials locally Finished goods are more catered for export market Specification & prices differ Level of exemption,quantity approved,extension period & addition of quantity Export & domestic market to determine level of exemption Period of exemption:1-3 years Quantity: new company/existing company Procedure of application Role of MIDA Role of Treasury Forms used for application Sample of letter of Treasury approval Conditions of exemption Agencies involved in duty exemption MIDA~~~~~ Processing and Approving CUSTOMS ~~~~~ Enforcement Types of manufacturers qualify for tax exemption Direct manufacturer Contract manufacturer Indirect exporter Manufacturing licence issued by MITI (MIDA): Who are qualified? Tax incentives granted to holder of manufacturing licence: Pioneer status Investment Tax allowance

3 Role of Customs in enforcing provisions of the law under Customs Act 1967 Visit & surprise check by senior officer of customs Auditing of records & documents Control of Importation by using bank guarantee while waiting for treasury exemption Control of Importation for company paying duty under protest while waiting for treasury exemption Disposal of defective finished goods; raw material/component/machinery manufacturing waste. Resposibilities of a person i.e. Manufacturer holding exemption facilities Submission of quarterly return on raw material/component/finished goods Submission of inventory list for machinery & equipment Sales: 1. Export sales ( Foreign countries/free zone/duty free islands/lmw) 2. Domestic sales : 3. Payment of customs duty 4. Payment under CEPT 5. Partial payment of import duty 6. Exempted sale Addition of premise/goods/change of address Subcontract works Reimport Reexport Wind up; receivership; liquidation Export through a third party Procedure to apply for export through a third party Form used Fire, Theft, Loss NON-CONPLIANCE of conditions Goods means foe export were sold locally Sale of machinery/raw materials without Treasury(Customs)approval poor record/non record keeping changing of address/addition of premise without approval disposal of goods without customs approval Penalties for non compliance Section 15.1, Customs Act 1967 Section 15.2,Customs Act 1967 Section 138,Customs Act 1967 Remission of customs duty Remission of tax by the Director General of Customs Remission of tax by the Minister of Finance Customs Appeal tribunal Role of Customs Appeal Tribunal New policies on: Disposal of Machinery/equipment Equity participation for new company/existing company undertaking expansion of plant Conclusion

4 Benefits of tax exemption under Section 14.2 Constraints THE FACILITATOR Mr Goh Kin Siang is the Deputy Director of Customs, rtd. He has 35 years of working experience in many areas such as import, export, sales tax, customs port, service tax, excise, drawback and refund, petroleum, finance, industry (LMW, Sec 14.2 & Free Zone), preventive etc. He was the Superintendent of Customs Johor Bahru; Assistant Director of Customs (Internal Taxes) Kuantan; Lecturer Academy Customs of Malaysia, Malacca; Senior Assistant Director of Customs, Sarawak; Senior Assistant Director of Customs, Export Section, Complex Customs Tg Puteri, JB; Senior Assistant Director of Customs I & II Industry & Internal Tax Division, Malacca; Deputy Director of Customs, Headquarters, Putrajaya. TARGET GROUP All types of manufacturers ADMINISTRATIVE DETAILS COURSE FEE RM440 (FMM Member) / RM550 (Non-Member) per participant (The fee includes luncheon, coffee/tea breaks and notes) DRESS CODE Office Attire REGISTRATION Participation in the program is based on a first-come-first-served basis. Cheques made in favor of the FMM Institute should be forwarded on or before program date to the FMM Institute, Northern Branch, Bandar Seberang Jaya. Participant who registered but did not attend, will be billed accordingly. Upon confirmation, kindly send us the payment before the commencement of the program. CANCELLATION There will be no refund for cancellation within 2 days prior to the program, 50% for cancellation between 3 6 days and full refund for cancellation 7 days prior to the program. Please inform in writing if you intend to cancel. A replacement can be accepted at no additional cost. DISCLAIMER ENQUIRIES The FMM Institute reserves the right to change the facilitator, date and to vary / cancel the program should unavoidable circumstances arise. All efforts will be taken to inform participants of the changes. Upon sending the registration form, you are deemed to have read and accepted the terms and conditions. Ms Nazliza / Mr Haffiz / Mr Aidi FMM Institute No 2767, Mukim 11, Lebuh Tenggiri 2, Bandar Seberang Jaya, Seberang Perai Tel : ( Nazliza ) / ( Haffiz ) / (Aidi) Fax : nazliza@fmm.org.my haffiz@fmm.org.my Closing Date: 14 February 2013

5 REGISTRATION FORM CUSTOMS TAX INCENTIVES (EXPEMTION) UNDER SECTION 14.2, CUSTOMS ACT 1967 & SECTION 10.A, SALES TAX ACT February 2013 Venue: Equatorial Hotel, Penang To : Ms Nazliza / Haffiz ( Fax : / nazliza@fmm.org.my ) FMM Institute (Penang Branch) 1. Name : 2. Name : 3. Name : 4. Name : Enclosed cheque / bank draft no. for RM being payment for participant(s) made in favour of FMM Institute *Submitted By : Name: Designation: Company: Address: Tel : Fax: * PLEASE DO FILL UP WITH COMPLETE DETAIL