The PricewaterhouseCoopers team answers questions on the service tax,
green technology and real property gains tax.
THIS is the second of a three-part question-and-answer series provided by
PricewaterhouseCoopers on various aspects of Budget 2010. The final part
will appear in StarBiz tomorrow. Email your questions to:
Q. I have been issued a credit card and I subsequently decide to cancel
the credit card six months later, will I be able to claim the service tax
A. The service tax law does not contain provisions for a refund of service
tax under these circumstances.
If I have been issued a credit card free for life, how does the change
in law affect me?
Service tax will be collected on the completion of each year after Jan 1,
2010. A principal cardholder will have to pay RM50 per card and RM25 for
every supplementary card.
Will I still be paying service tax when I have meals at restaurants
after GST is implemented?
GST will replace the current service tax. The Minister of Finance
indicated that the rate of GST will be lower than the current rate of
service tax. The current service tax rate is 5%.
With the reintroduction of real property gains tax we do hope that which
is of lesser burden to the Rakyat would apply, says the Second Finance
My company is considering purchasing a new building. We are looking at
a building incorporated with “green technology”.
I understand there will be an exemption from stamp duty on the purchase
of such buildings?
Stamp duty exemption would be available for buyers of buildings and
residential properties that have been issued a Green Building Index (GBI)
The GBI is a rating index for environmentally-friendly buildings.
The stamp duty exemption would only apply to buildings or residential
properties bought directly from real property developers and the exemption
is only given once to the first owner of the building.
It may not apply to existing buildings that have subsequently been granted
the GBI certificate.
The amount of the stamp duty exemption is given only on the additional
cost incurred by the property developer to obtain the GBI certificate, and
not on the full value of the building.
The exemption will apply for sales and purchases agreements executed from
Oct 24 2009 until Dec 31, 2014.
I heard that there will be a tax of 5% to be imposed on gains from the
disposal of real property from Jan 1, 2010.
It is proposed that real property gains tax will apply to disposals of
real properties effective from Jan 1, 2010.
To date there has been a prevailing exemption on real property gains tax
on such disposals since April 1, 2007.
Generally, the exemption would still apply to sale and purchase agreements
executed by Dec 31, 2009.
Based on the Finance Bill, the rate of tax applicable will depend on the
period the property has been held since it was acquired.
Previously, there was no tax for disposals by individuals from the sixth
However, in the current proposal this has been removed. Therefore, both
companies and individuals would be taxed at the scale rates that were
applicable in the past.
The Second Finance Minister has recently clarified that the tax rate on
such disposals of real property would be 5% irrespective of the period of
Therefore with the reintroduction of real property gains tax we do hope
that which is of lesser burden to the Rakyat would apply.
I intend to sell my house next year. With real property gains tax
applicable, will I need to file a return?
Does this mean 5% will be retained from money due to me from the sale
of the property?
You would need to file a real property gains tax return within 60 days of
the date of the disposal. This proposal increases the previous 30 day
deadline to submit a return.
The proposed mechanism for payment of real property gains tax from Jan 1,
2010, the acquirer would be required to retain an amount not exceeding 2%
of the total value of the consideration for the property.
The acquirer would then be required to pay that amount directly to the
Inland Revenue Board within 60 days of the date of the disposal.
The IRB will apply this amount received from the acquirer against the
amount of real property gains tax you would need to pay on the disposal of
I am a Malaysian citizen currently lecturing at a local university in
I am planning to apply for a full time 2-year teaching position at a
tertiary organisation in the Iskandar region. Do I get any special
incentive if I accept the offer?
Your employment offer in the Iskandar region would fall under one of the
qualifying activities categorised as ‘educational services’.
If you apply and commence your employment in Iskandar Malaysia between Oct
24, 2009 and Dec 31, 2015, provided that you qualify as a Malaysian tax
resident, your employment income will be taxed at the flat rate of 15%.
This could be substantially lower compared to the effective tax rate of a
Malaysian tax resident.