The Inland Revenue Board (IRB)

The Inland Revenue Board (IRB)

Prior to March 1996, known as the Department of Inland Revenue Malaysia

(under the Ministry of Finance).

Became a Statutory Board on the 1st of March, 1996.

Generally speaking the Inland Revenue Board (IRB) is responsible for:

formulation of new tax policies for both the private and public sectors,tax collection; and compliance enforcement

TAXATION

BASIS OF TAXATION

Income tax is generally imposed on a territorial basis in that only income accruing in or derived from Malaysia is liable to tax. However, resident individuals and other non-corporate entities are also taxed on foreign-sourced income remitted into Malaysia. Foreign-sourced income received by resident companies are not subject to tax even if such income is remitted to Malaysia.

Income derived by tax residents from businesses of banking, insurance and air/sea transport operations are assessable on a world income scope.

Relief from double taxation of foreign-sourced income is available by means of bilateral credit if there is a tax treaty or unilateral relief if there is no tax treaty. The relief is restricted to the lower of Malaysian tax payable on the foreign-sourced income or foreign tax paid if there is a treaty or one-half of the foreign tax paid there is no treaty.

source http://www.lawyerment.com/

Sources of Income Liable to Tax

Sources of income which are liable to income tax are as follows:

• Gains and profits from trade, profession and business
• Salaries, remunerations, gains and profits from an employment
• Dividends, interests or discounts
• Rents, royalties or premiums
• Pensions, annuities or other periodic payments/li>
• Other gains or profits of an income nature not mentioned above.

Chargeable income is arrived at after adjusting for expenses incurred wholly and exclusively in the production of the income. Specific provisions or reserves for anticipated losses or contingent liabilities are not tax deductible. No deduction for book depreciation is allowed although capital allowances are granted. Unabsorbed losses may be carried forward indefinitely to offset against future income.

Personal Income Tax

All individuals are liable to tax on income accrued in, derived from or remitted to Malaysia. The rate of tax depends on the resident status of the individual which is determined by the duration of his stay in the country (as stipulated under Section 7 in the Income Tax Act 1967).

Resident Individual

A resident individual is taxed on his chargeable income at graduated rates from 2% to 30% after the deduction of tax reliefs. However, an individual with chargeable income of less than RM2,500 is taxed at zero rate.

Personal Reliefs

The chargeable income of an individual resident is arrived at by deducting from his total income the following personal reliefs:


(a) Personal = RM5,000 (a further relief of RM5,000 if the taxpayer is a disabled person)

(b) Wife = RM3,000 (a further relief of RM2,500 if the wife is a disabled person)

(c) Medical expenses of parents up to a maximum of RM5,000. Medical expenses for serious illnesses for individual, wife or child up to a maximum of RM5,000.

(d) Expenditure for purchase of basic support equipment for the individual, his wife, child or parent who is disabled the up to a maximum of RM5,000

(e) Unmarried children below the age of 18 = RM800 per child

The maximum relief for unmarried children (regardless of age) receiving full-time education in universities and institutions of higher education in Malaysia is four times the normal relief.

(f) Incapacitated children RM5,000 per child

(g) Contributions to the Employees Provident Fund and insurance or takaful premiums for life policies are allowed a maximum total tax relief of RM5,000. A further tax relief of RM2,000 is given for insurance or takaful premiums with respect to medical and educational purposes.



A married woman whose income is separately assessed generally has her overall tax liability reduced, although this may not always be the case. The separate assessment covers all her income sources. She may, however, elect for joint assessment, in which case, the husband is given a wife relief of RM3,000.

Tax rebate

Tax liability of a resident individual is reduced by rebates which are granted as follows:


(a) For an individual with a chargeable income not exceeding RM10,000, a rebate of RM110 is given. A further rebate of RM60 is given for his wife. A wife who is assessed separately will be entitled to a rebate of RM110 if her chargeable income does not exceed RM10,000.

(b) The equivalent of amount paid in respect of any zakat, fitrah or other Islamic religious dues which are obligatory.

(c) A sum of RM400 for the purchase of a computer by an individual or wife.

(d) The amount of fee paid to the government for the issue of an employment pass, visit pass or work permit.

Non-resident Individual

Generally, a nonresident individual is liable to tax at the rate of 30% and he is not entitled to any personal relief. He is entitled to claim tax rebate only for item (d) as stated in para 4.1 above. However, for the following types of income, nonresident individuals are subject to a withholding tax which is a final tax:



(a)			Special classes of income - use of moveable property - technical advice, assistance or services - installation services on the supply of plant, machinery, etc. - personal services associated with the use of intangible property	10%
(b)			Services of a public entertainer	15%
(c)			Interest	15%



An employee on a short-term visit to Malaysia enjoys tax exemption in respect of his income from an employment exercised in Malaysia when his presence does not exceed 60 days in a calendar year.

However, the income of a nonresident individual who performs independent services such as consultancy services is not exempted from tax.

Income tax

An income tax is a tax levied on the income of individuals or business (corporations or other legal entities). Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs). Various systems define income differently, and often allow notional reductions of income (such as a reduction based on number of children supported).

The "tax net" refers to the types of payment that are taxed, which included personal earnings (wages), capital gains, and business income. The rates for different types of income may vary and some may not be taxed at all. Capital gains may be taxed when realized (e.g. when shares are sold) or when incurred (e.g. when shares appreciate in value). Business income may only be taxed if it is significant or based on the manner in which it is paid. Some types of income, such as interest on bank savings, may be considered as personal earnings (similar to wages) or as a realized property gain (similar to selling shares). In some tax systems, personal earnings may be strictly defined where labor, skill, or investment is required (e.g. wages); in others, they may be defined broadly to include windfalls (e.g. gambling wins).

Tax rates may be progressive, regressive, or proportional. A progressive tax taxes differentially according to how much has been earned. For example, the first $10,000 in earnings may be taxed at 5%, the next $10,000 at 10%, and any more income at 20%. Alternatively, a flat tax taxes all earnings at the same rate. A regressive income tax may tax income up to a certain amount, such as taxing only the first $90,000 earned. A tax system may use different taxation methods for different types of income. However, the idea of a progressive income tax has garnered support from economists and political scientists of many different ideologies, from Adam Smith in The Wealth of Nations^[1] to Karl Marx in The Communist Manifesto.^[2]

Personal income tax is often collected on a pay-as-you-earn basis, with small corrections made soon after the end of the tax year. These corrections take one of two forms: payments to the government, for taxpayers who have not paid enough during the tax year; and tax refunds from the government for those who have overpaid. Income tax systems will often have deductions available that lessen the total tax liability by reducing total taxable income. They may allow losses from one type of income to be counted against another. For example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate the loss, such that business losses can only be deducted against business tax by carrying forward the loss to later tax years.

tax

A sum of money paid by the citizens to the government on the income or value of purchases of certain specific goods and services.

The purpose is to bear government expenditure and to undertake development projects.

Tax is the main contributor to the Federal Government’s revenue. In year 2003, tax contributed RM64,891 million or approximately 70.1% of the Federal Government’s revenue.

Tax revenue constituted direct taxes amounting to RM43,016 million and indirect taxes of RM21,875 million.

Direct taxes include income tax , petroleum income tax, stamp duties and real property gains tax. Indirect taxes include import duties, export duties, excise duties, sales tax and service tax.

Types of insurances :

• Accident insurance
• Education insurance
• Marine insurance
• Aviation insurance
• Life insurance
• Fire insurance

Definition :

• A contract of insurance is a contract whereby the insurer agrees to indemnify the insured against a loss which may arise upon the occurrence of some event or to pay a certain definite sum of money on the occurrence of the particular event.
• The loss which is being insured against is called the risk.
• The policy means the insurer and the insured enter into a contract of insurance, and the document containing the terms of the contract.
• A premium - consideration paid by the insured either in the form of lump sum or periodical amount.

Differences between Ordinary Contract and Insurance Contract :

Ordinary Contract

• the doctrine of utmost good faith is not applicable.
• insurable interest is not needed.

Insurance Contract

• doctrine of utmost good faith is very important.
• the insured must have insurable interest in the subject matter.

Contracts of Indemnity
In a case of a loss against which the policy has been made, the insured is entitled to be indemnified which means to be compensated for his loss, but he cannot recover more tahn the actual loss.

Insurable Interest :

• means an interest (financial or otherwise) in the subject matter of a contract of insurance, which provides the insured with the right to enforce the contract.
  
• said to have an insurable interest if he will suffer loss in the event of property being destroyed.

Doctrine of Utmost Good Faith

• Insurance contract require the contracting parties to disclose to each other all information which would influence either party's decision to enter into the contract, regardless of whether such information was requested or not.
• Failure to disclose material information gives the other party the right to avoid the contract

NATRAH

NATRAH WITH CHE' AMINAH

RIOT PROTEST COURT

HEAD LINE OF THE WORLD AT THAT TIME

I watched a theatre called NATRAH a few months ago. this theatre stared by MAYA KARIN as Natrah, REMY as Natrah's partner, UMI AIDA as Che' Aminag the story was base on real story of Natrah or known as Maria Hertogh who made highlight of the world in 1560. this story show us how colonialist Law English Law affected the country of territory which is Singapore.

Hertogh was born on March 24, 1937 to a Dutch Catholic family living in Tjimahi, near Bandung, Java, then a part of the Dutch East Indies [which was until August 17, 1945, claimed by the Malaysian Sultanate of Johor].Her father Adrianus Petrus Hertogh came to Java in the 1920s as a sergeant in the Dutch Army.
He married Adeline Hunter, of British-Javanese descent in the early 1930s.

When World War II broke out, Sergeant Hertogh was captured by the Japanese Army and sent to a POW holding facility in Japan, where he was kept until 1945.Adeline stayed with her mother, Nor Louise, and her five children. Maria was the third and youngest daughter.On December 29, 1942, Mrs Hertogh gave birth to her sixth child, a boy.Three days later, Maria went to stay with Aminah Mohamad, a 42-year-old ethnic Johor and Javanese woman from Terengganu and a close friend of Nor Louise.Adeline claimed she was persuaded by her mother to allow Maria to stay with Aminah in Bandung for four days.

Aminah arrived on January 1, 1943 to fetch Maria.When the child was not returned, Mrs Hertogh set out to retrieve her daughter.She claimed that she was arrested by a Japanese sentry as she did not possess a pass and was interned.From her internment camp, she smuggled a letter to her mother, requesting for her children to be sent to her.This Nor Louise did, but Maria was not among them.Mrs Hertogh asked her mother to fetch Maria from Aminah.

Her mother later wrote and told her that Aminah wanted to keep Maria for two more days, after which she would bring the child to the camp.his did not materialise and Mrs Hertogh did not see Maria throughout her internment.After her release, she could find neither Maria nor Aminah.Aminah claimed that Adeline had given Maria to her for adoption in late 1942.She asserted that she told Mrs Hertogh she would regard Maria as her child, and would bring her up in the Muslim faith.Mrs Hertogh replied that she would be glad as she herself had been brought up as a Muslim.Aminah also contested the truth of Adeline's internment by the Japanese.

She testified that she and Mrs Hertogh continued to visit each other frequently after the adoption until the latter left for Surabaya to look for a job "about the beginning of 1944."Thereafter the two never saw each other again until 1950.Maria became a Muslim in late 1943 and was known as Nadrah Maarof.
Aminah moved to Jakarta and later returned to Bandung, where she worked for the Japanese military police as an interpreter until the end of the War.

In 1947, during the five-year Indonesian War of Independence (1945-1950), and fearing that Maria would be harmed by Indonesian freedom fighters as she was White, Aminah moved via Singapore to her hometown Cukai (or Kemaman) in Terengganu.By then Maria spoke only Malay, wore Malay clothes and practised her new religion.In 1945, Sergeant Hertogh was released and returned to Java, where he was reunited with his wife.The couple said that they enquired about Maria but could find neither their daughter nor Aminah.
They then returned to Holland after requesting the Dutch authorities in Java to trace the child.
Investigations were made by the Red Cross Society and the Dutch Army.

In September 1949, Aminah and Maria were traced to the kampung (village) they were living in.

Negotiations were opened to retrieve Maria in early 1950.The Dutch offered some money to make up for Aminah's expenses in bringing up the girl for eight years.Aminah rejected the offer and refused to give up her foster daughter.Nonetheless, she was persuaded to travel with Maria to Singapore in April to discuss the issue with the Dutch Consul-General.

However, Aminah's firm position could not be wavered and the Consulate eventually applied to the High Court on April 22 for Maria to be delivered into the custody of the Social Welfare Department pending further order.The Chief Justice heard it on the same day and approved the application.The next day, an officer from the department served the order on Aminah and took Maria away.After a routine medical examination, she was admitted to the Girls Homecraft Centre at York Hill.From this point, Maria had made it clear that she wanted to stay with Aminah and did not wish to be returned to her natural parents.

However, the High Court ruled on May 17 that the custody of Maria be given to the Hertoghs.
It was only after much persuasion that Aminah agreed to enter the car together with Maria and pay a visit to her lawyer, who explained that Maria had to be given up until an appeal was made.The duo then parted in tears, with Maria returned to York Hill for temporary safekeeping.At York Hill Maria stayed for two more months, under a further order from the Chief Justice pending appeal, which was filed on July 28.

The verdict was an overruling of the earlier decision.The Appellate Court found ambiguity in the Dutch Consul-General's representation of Maria's natural father.Both Aminah and Maria were overjoyed.
On August 1, 1950, merely four days after winning the appeal, the events took a dramatic and unexpected turn.Maria was married to 22-year-old teacher Mansor Adabi.A day after the marriage, Aminah received the Hertoghs' representative lawyers from Kuala Lumpur.The lawyers delivered a letter demanding the return of Maria by August 10, failing which legal action would be taken.

Believing that the marriage settled the matter, Aminah and Mansor both ignored the deadline. The Hertoghs did not.On August 26, a summons was taken out by the Hertoghs against Aminah, Maria and Mansor.The hearing only began on November 20.Maria rarely left her residence in the house of M. A. Majid, the then president of the Muslim Welfare Association, because in her own words, she attracted "too much attention".

Nevertheless, media coverage of the incident had grown to a global scale.
Letters from Muslim organisations in Pakistan promising financial help arrived, some going so far as to declare any further move by the Dutch Government to separate the couple as "an open challenge to the Muslim world".Pledges of aid also came from Indonesia and Saudi Arabia.

When the hearing finally opened, the marriage was declared invalid. The judge said that under Dutch law to which Maria was subject, she could only get married at 16.An exception to the above point could not be established because Mansor, born in Kelantan, could not be proved to be domiciled in Singapore.The judge said Maria's natural father, who was a Christian, had the legal right to control her religion.He said Adrianus Hertogh had not abrogated his parental rights and awarded the custody of Maria to the Hertoghs with immediate effect.

Maria was sent to the Roman Catholic Convent of the Good Shepherd in Thomson Road.

Mrs Hertogh stayed at another address for a few days, and visited Maria daily, before moving into the convent herself.Pas leader Dr Burhanuddin Helmi formed the Nadrah Action Committee. He picked Karim Ghani, an Indian Muslim from Rangoon, Burma, as the committee chairman.Karim, on Burhanuddin’s orders, was to organise a rally to protest against the court decision.The appeal hearing opened on December 11.

Maria stayed at the convent and did not attend.Crowds carrying banners began to gather around the Supreme Court.The court threw out the appeal within five minutes around noon.At that time, the crowd had grown to 3,000 people.Riots quickly erupted, even though Karim and Burhanuddin had counseled the Muslims many times not to take the law into their own hands.

The mob largely consisted of Malay Muslims but Chinese gangs were also reported to have joined it.Several Europeans and Eurasians were attacked, and cars were burnt.The police force, its lower ranks largely consisting of Malays who sympathised with the rioters, were effective in quelling the riots.

The British Army eventually quelled the riots.Meanwhile, various Muslim leaders appealed over the radio for the riots to cease.Police nabbed 778 people including Karim and Burhanuddin. 509 were released. 200 were charged and 25 were acquitted. 100 were convicted, and five were sentenced to death.
On August 25, 1951, Tunku Abdul Rahman saved the five men on death row. Their sentences were commuted to life imprisonment.

London criticised the colonial government’s handling of the situation, on the grounds that the colonial government failed to anticipate the riots and was insensitive to the Muslims.A day after the riots, the Hertoghs left for Holland.

source

http://en.wikipedia.org/wiki/Maria_Hertogh_riots

Nemo Dat Quod Non Habet

Nemo Dat Quod Non Habet

goods are sold by a person who is not the owner and without the consent of the original owner, the buyer acquires no better title than the seller had. However, there are exceptions to the rules.

1. Estoppel - A rule of law that when person A, by act or words, gives person B reason to believe a certain set of facts upon which person B takes action, person A cannot later, to his (or her) benefit, deny those facts or say that his (or her) earlier act was improper.
2. Sale by mercantile agent in the ordinary course of business, the buyer will obtain good title.
3. Sale by joint owner.
4. Sale under a voidable title - the buyer will obtain good title if he buys in good faith and without notice of seller's defect of the title.Sale by seller in possession after sale.Sale by buyer in possession.

Lee v Lee’s Air Farming Ltd [1961]

Lee formed the company, Lee’s Air Farming Ltd. He owned all the shares except one. He was the company’s sole governing director. He was also employed by the company as its chief and only pilot.
Lee was killed while flying for the company.
His wife made a claim for workmen’s compensation under the New Zealand workmen’s

compensation legislation. Her entitlement to such compensation depended on whether or not Lee was a worker ie. a person who has entered into a contract of service with an employer.
The New Zealand Court of Appeal refused to hold that Lee was a worker, holding that a man could not in effect, employ himself.
However, the Privy Council allowed Mrs Lee’s claim. Lee may have been the controller of the company in fact but in law, they were distinct persons.
He could therefore enter into a contract with the company, and could be considered to be an employee. The widow was therefore entitled to an award in respect of workmen’s compensation.

held

A company can own property in its own name. Section 16(5) only mentions land but there is no doubt that a company may own any other sort of property.
The property of a company belongs to it and not to its members.
Even if a person owns all the shares in a company (through nominee shareholdings), he does not own the company’s property, nor does he have any legal or equitable interest there.
He does not even have an interest in the company’s property that can be insured.

Abdul Aziz B Atan & Others V Ladang Rengo Malay Estate

Ladang Rengo Malay Estate deals with the palm oil industry. Abdul Aziz b Atan was one of the employees of the company at that time.After a few years, there had been a change of structure in the means of shareholders in the company; Ladang Rengo Malay Estate. All the shareholders transferred shares to other people and thus this create a confusion among the employees.Abdul Aziz b Atan considered the employers had been changed and hence, there were changed in Employment Agreement ; where he thought their (the employees) agreement has ended (the end of employment). They claimed they have the pension benefit.

held

co can enter into contracts
co can own its own property

All the shareholders sold and transferred their shares to a buyer.
The main assets of the co consisted of land on which the co carried out business as rubber and oil palm estate.
The employees put in a claim for termination benefits, claiming that the co was now owned by a different employer than that on their contracts.
The courts held that an incorporated co is a legal person separate and distinct from the shareholders of the co.
There was no change in the identity or personality of the co, and it continued to own all the estate assets which were an integral part of the business for the purposes for which the employees were employed.
A single shareholder of a co only owns the shares in his name and he has no right to lay his hands on the co assets.

Every company inside a group is a separate personality and owns it own property

Salomon v Salomon & Co Ltd [1897] Single company

In this case, Salomon who owned a shoe-making business and operated as a sole trader, was convinced by his family to set up a company.
Under the Companies Act at that time, the minimum requirement to set up a company was 7 shareholders holding at least 1 share each.
As such, Salomon followed the required procedures in setting up the company, took one share for himself and gave one share each to his wife and five children.
The company, Salomon & Co Ltd, became a separate legal personality on receiving its certificate of incorporation.
Salomon then agreed to sell his shoe business to the company for £39,000. The shareholders of the company agreed to the price asked. Salomon was paid £10,000 in cash, was given 20,000 shares worth £1 each and a debenture for the remaining £9,000 owed him by the company.
Salomon then ran the company as its director.
As time went by, the company faced difficulty and in order to raise capital for the company, Salomon sold his debenture to Benedick. The cash raised was used for the business but did not manage to stop the company from facing more problems.
Finally, a liquidator was appointed by the creditors to realize the assets of Salomon & Co Ltd and settle the debts owed to the creditors. However, when all the assets of the company were realized, the total amounted to around £6,000.
The creditors were horrified to find out that the money was to be used to pay off the debenture as the creditor holding it was considered a secured creditor. The case was taken to the courts and the High Court held that the creditors could not recover their debts as their contracts were with the company, and not with Salomon.
However, on appeal to the Court of Appeal, it was held that since Salomon was the majority shareholder (20,001 shares as compared with a negligible remaining 6 shares) and he was also a director of the company, that the company therefore belonged to Salomon and that he should be liable to settle all the debts owing to the creditors of the company.
Nevertheless, on further appeal to the House of Lords, it was held that as Salomon & Co Ltd is a company, and therefore had separate legal personality, it could not be said that Salomon owned the company.
The company and Salomon are two legal persons in law. It is the company which has the power to enter into contracts.

Therefore,
debts of the company are the responsibility of the company and not its members;
It is the company which entered into contracts with the creditors and the creditors can only sue the co and not its shareholders. Solomon liability as a shareholder is limited.

a co may contract with its shareholder if the need arises;
The co can employ people to run the business and S was entitled to be considered an employee of the co in his capacity as director of the co.

co must sue in its name for any wrong committed against it; and
If any wrong has been committed against the co, it is the co who can sue to recover its losses.

co can own assets and shareholders have no proprietary interests in those assets.
The shoe business belonged to the co and not to Solomon once the contracts were entered into between Solomon and the co.

Companies Act

Section 16(5) of the Act states:

“On and from the date of incorporation…the subscribers to the memorandum together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company and of suing and being sued and having perpetual succession…with power to hold land but with such liability on the part of the members to contribute to the assets of the company in the event of being wound up as is provided by this Act.”

This means:
(i) the company is a body corporate with the powers of an incorporated company;
(ii) it may sue and be sued in its own name;
(iii) it has perpetual succession;
(iv) it may own land; and
(v) the liability of the members may be limited.

The separation of the corporation from the corporators was a principle which arose from the House of Lords case of Salomon v Salomon & Co Ltd [1897].

Common law

The common law cases show how the courts have applied this concept of separate legal personality.

Articles of Association

What is the "Articles of Association"?

The “Articles of Association”, which constitutes the internal regulations of a company usually contains clauses dealing with under-mentioned matters.

Every company is required to have a written constitution in the form of the above two documents.

About Memorandum of Association?

• The name of the company
• The object of the company
• The amount of authorized capital (minimum RM 100,000) and its division into class of shares and its specific value
• Name, identity card (if Malaysian), passport (if foreigner),address and occupation of each subscriber
• Name, designation and address of the witness to the signature of each subscriber.

About Articles of Association?

• The name of the company
• The name of each first director (minimum two)
• The name of the first company secretary
• The minimum and maximum number of directors
• The share qualifications of each director, if any
• Name, identity card number (if Malaysian), passport (if foreigner), address and occupation of each subscriber
• Name, designation and address of the witness to the signature of each subscriber

The “Articles of Association” also includes a provision governing the use of a company seal on certain formal documents such as share certificates.

About Memorandum of Association?

• The name of the company
• The object of the company
• The amount of authorized capital (minimum RM 100,000) and its division into class of shares and its specific value
• Name, identity card (if Malaysian), passport (if foreigner),address and occupation of each subscriber
• Name, designation and address of the witness to the signature of each subscriber.

he use of a company seal on certain formal documents such as share certificates.