FAQ
These are collected Frequently asked Questions (FAQs) and their answers about AdrianYeo's services. The FAQ pages are categorized into general questions and answers about the audit, tax, accounting and advisory services.
If you don't find an answer to your question in this part of the FAQ, feel free to contact us via chat, contact form or call us right away.
Frequently asked questions
Audit & Assurance
What is statutory audit?
What is voluntary audit?
What is internal control?
What is due diligence?
Due diligence is an investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party.
What is the key difference between Statutory Auditor and Internal Auditor?
Who can be appointed as an Auditor for a company?
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A person who has been approved under Section 263 of the Companies Act, 2016 as an approvedcompany auditor; and
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Whose approval has not been revoked.
Does my business needs an audit?
What are statutory audit requirements?
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Details of fixed assets
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Bank statements with details of transactions therein and the details of cash receipts & payments
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Information on secured and unsecured loans and advances
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Trade payables & receivables
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Local purchases & import purchases
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Local sales and export sales information
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Details of inventory
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Administration and selling expenses
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Details of foreign exchange earnings & expenditures
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Statutory dues & other levies
Why voluntary audit?
What is the purpose of internal control?
A system of internal control is necessary to help employees and other partners understand the attitude and objectives of the organization as a whole. Internal controls provide reasonable assurance to customers and other parties that transactions are recorded properly and in a timely manner.
Who is responsible for internal control?
Management is responsible for establishing and maintaining the control environment. Auditors play a role in a system of internal controls by performing evaluations and making recommendations for improved controls.
Why due diligence is important?
Tax Advisory & Compliances
What is personal income tax?
What is corporate income tax?
What is real property gains tax (RPGT)?
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Individuals (Citizens & Permanent Residents)
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Individuals (Non-Citizens/Foreigners)
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Companies
What is Corporate tax credit and incentive?
What is tax planning?
Corporation tax represents a substantial proportion of a company’s costs. Further to this the increased complexity with constantly changing assurance, regulatory, tax compliance requirements and harsher penalties for non-compliances means a large amount of your time will be taken up meeting these needs and not allowing for the appropriate consideration to ways in which you can minimise your corporate tax exposure which can have the potential to significantly improve your bottom line.
What is tax audit & investigation?
If you are chosen for a tax investigation the financial and personal costs of a protracted case can be significant and we understand what a stressful and worrying time a tax investigation can be for you.
What is withholding tax?
What is expatriate tax?
What is Sales and service tax (SST)?
Am I taxable?
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earning above RM34,000 per year (after EPF deductions) or RM2,833. 33 per month (after EPF deductions)
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earning bove RM38,202.25 per year (before EPF deductions) or RM3,183.52 per month (before EPF deductions)
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in Malaysia for at least 182 days in a calendar year
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in Malaysia for a period of less than 182 days during the year but that period is linked to a period of physical presence of 182 or more consecutive days in the following or preceding year.
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business trips
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health treatment for illness
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social visits not exceeding 14 days
What Is Employment Income?
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is on paid leave which is attributable to the exercise of an employment in Malaysia
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performs duties outside Malaysia which are incidental to the exercise of an employment in Malaysia
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is a director of a company resident in Malaysia; or
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is employed to work on board an aircraft or ship operated by a person who is resident in Malaysia
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If the aggregate of the period of periods of employment in Malaysia does not exceed 60 days in a calendar year or
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where the total period of employment which overlaps 2 calendar years does not exceed 60 days
What Are the Classes of Income that is Tax Chargeable?
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Gains or profits from a business
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Gains or profits from an employment
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Dividends, interests or discounts
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Rents, royalties or premium
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Pensions, annuities or other periodical payments not falling under any of the foregoing clauses
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Gains or profits not falling under any of the foregoing clauses
Is my company taxable?
When is RPGT applicable?
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Individuals (Citizens, PRs, Non-Citizens & Foreigners -
If any of the above parties sell their property at a profit, they will have to pay RPGT based on their chargeable gain.
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Companies -
Usually, the selling of shares by companies are not subject to RPGT except Real Property Companies (RPCs) whose core business is in real property. An RPC company constitutes only if it has real property[1] or RPC shares amounting to no less than 75% of their company’s total tangible assets. However, if the company disposes of its shares or real property to the point where its RPC share percentage falls below 75% and it ceases to be an RPC, then the shares that are disposed of will not retain its RPC characteristic and will be liable for the RPGT provision.
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What are the exemptions for RPGT?
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Exemption on gains from the disposal of one private residential property once-in-a-lifetime to individual (please utilise this once in lifetime opportunity wisely).
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Exemption on gains arising from the disposal of real property between family members (e.g. husband and wife; parents and children; grandparents and grandchildren).
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10% of profits OR RM10,000 per transaction (whichever is higher) is not taxable.
What are the typical Allowable Expenses?
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Legal fees, accounting fees, surveyor’s fee, etc.
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Real estate fees (sales commission)
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Administrative fees
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Repair or renovation to maintain or upgrade the property such as interior design such as IKEA furniture to redecorate your house
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Cost of preserving or defending one’s title to, or to a right over the asset
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Cost of advertising to make the disposal
What is Allowable Loss?
If there is more than one transaction of real property in the assessment year, any loss incurred from a single transaction can be offset against another transaction, which generates a chargeable gain, as long as both the transactions fall under the same year.
How do I determine the applicable RPGT years?
When do I have to pay RPGT?
I have received a tax investigation letter from IRB, what should I do first?
Read the letter carefully and seek professional advice if you are unsure or if it is a complicated request for information. Our tax team have significant experience supporting individuals and businesses at this stage, so at this point you may wish to contact us for a no obligation, confidential consultation to discuss your next actions.
Why am I under tax investigation? What triggers a tax investigation?
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Sometimes it is obvious, like an omission picked up by IRB.
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Sometimes it is random.
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You may be in a IRB target area – IRB set up taskforces to target areas that are thought to be at high-risk of tax fraud. These maybe geographic and/or specific sectors, with property income being perhaps the most common.
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Have you done something to attract the attention of IRB? This may be that your income is dramatically up and down or that returns are always late, or that you are claiming excessively high expenses in proportion with your income – all these things can make you high risk in the eyes of IRB.
How long will a tax investigation take?
Some tax investigations finish with one letter, other investigations can go on for months with IRB asking for more and more information.
Can I appeal against my tax investigation?
No, unfortunately you cannot appeal against an investigation being opened.
What information will I need to provide during my tax investigation?
The information IRB will ask you to provide will depend on what they are checking. You’ll normally receive a letter telling you exactly what’s needed. You should be prepared to provide the information that your tax return was based on quickly and easily.
What powers do IRB have in a tax investigation?
IRB have extensive powers to request and obtain information from the taxpayer and from third parties. They can issue determinations if there is no co-operation but this is always a last resort.
What is voluntary disclosure?
Voluntary disclosure takes place when a taxpayer discovers their own error or omission and reports it to IRB.
What am I liable for in a tax investigation?
You are liable for any tax found to be due with related interest and penalties.
What penalties are involved in tax investigations?
How can an accountant help with my tax investigation?
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Collating information and ensuring the correct information is provided to IRB.
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Dealing with further requests for information.
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Ensuring that IRB do not extend an enquiry unnecessarily.
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Helping to negotiate a final settlement including interest and penalties.
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Helping to negotiate time to pay.
Isn’t tax planning for rich people?
While the wealthy do need tax planning, a good estate plan can offer tax planning advantages to everyone. Wealthy individuals may need to be concerned about estate taxes, but your beneficiaries will most likely have to address income and real property gains taxes. A properly designed and executed estate plan can both reduce those taxes and defer them to a later date. This serves to pass on more of your property to your loved ones rather than the government.
What are tax credits?
What is withholding tax?
Withholding tax is an amount withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia.
What is the late payment penalty for withholding tax?
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When you fail to pay the withholding tax within the due date, the IRBM will impose an increase in the tax rate by 10% of the original withholding tax amount payable.
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If you fail to pay the withholding tax or the increase in the withholding tax, you will not receive any deduction for the payment made to the non-resident payee against business income in the income tax computation.
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A civil suit can be filed to recover the withholding tax or the increased withholding tax that is not paid to the government.
What is Malaysian Tax Rate for Expatriate & Non-Residents?
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If your stay in Malaysia is less than 60 days, then any income, fee, commissions or bonus received will not be taxed
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If during your period of employment, your stay is not more than 182 days in a year, then you are a non-resident. As a non-resident, you will be taxed at a flat rate of 25% and you will not enjoy any tax incentives. UPDATE: The Malaysian Inland Revenue Board, (or known locally as Lembaga Hasil Dalam Negeri or LHDN for short) had increased the tax to 28% with effect from Year Assessment 2016
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If your stay is more than 182 days in a year, then you are a RESIDENT. A resident will be taxed at a graduated rate of 0% to 25% depending on your income. You will also enjoy the tax incentives that includes personal and family rebates, allowances, etc. that will reduce your net taxable income considerably
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If you work on board a Malaysian ship, your income is not taxable
What if I Have to Travel OUT of Malaysia within this 182-day period?
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To attend meetings, seminars, exhibitions or conferences which are all related to your job
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To seek medical treatment related to your health or your immediate family member
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Social visit but not exceeding 14 days
What is Certificate of Residence (COR)?
How Do I Calculate My Tax if I Worked for only 1.5 years?
Can I Get Any Tax Relief for My Family?
Can I Get Tax Rebates at the End of My Contract?
Will I be Subject to Withholding Tax?
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Use of movable property
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Technical services, assistance or advice
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Fees charged for installation of machinery, plant & other similar assets
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Personal services for use of intangible property
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Royalties on the use of intangible property
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Interest
Will I be Subject to Capital Gains Tax?
What is Service Tax?
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Service tax that is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business.
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Taxable person is any person who belongs in Malaysia and is prescribed to be a taxable person.
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Taxable service is any service which prescribed to be a taxable service.
When is Service Tax due and payable?
Tax is due and payable when payment is received for taxable service provided to customer by the taxable person
What is Sales Tax?
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on taxable goods manufactured in Malaysia by a taxable person and sold by him (including used or disposed off) ; and
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on taxable goods imported into Malaysia.
Who is the taxable person?
Taxable person is a person who manufactures taxable goods and is liable to be registered if the annual turnover has exceeded RM500,000.00 threshold. Such person is required to be registered under MySST system.
What is the rate of tax for sales tax?
What are the responsibilities of taxable person?
Taxable person is required to be registered, issue invoice and charge sales tax on the sales, maintaining a proper records and account for the tax by submitting bi monthly returns to RMCD.
Advisory Services
What is Business Valuation?
Business Valuation is a complex process requiring broad knowledge of accounting, finance, economics, taxation, and financial analysis. It requires a significant amount of informed professional judgment and careful consideration of the unique facts and circumstances of each business.
What is a Business Plan
What is financial application assistance?
Why do I need an up-to-date business valuation?
Things happen, in business as in life. Just as you should always have a resume ready, and you should keep your business plan updated, you should prepare a business valuation and update it every year. Here are some reasons why you might need that business valuation report.
Who to ask to value your business?
An appraiser is an individual who estimates the value or worth of something. An appraiser sets a value on a property or other assets, including the assets of a business. There are many different kinds of appraisers, many of whom specialize in various types of appraisals. This article discusses how to find and use a business appraiser.
Why I need a business plan?
What are in a business plan?
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Business background, owner profiles
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Products and services
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SWOT analysis (strengths, weaknesses, opportunities, threats)
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The business environment (industry, competitors
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Corporate strategy – what is the purpose and differentiating factors?
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Marketing strategy – how will you attract customers/clients?
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Action plan – what needs to be done?
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Financial plan
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Key assumptions
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Pricing
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Forecast financial statements (Profit & Loss, Balance Sheet, Cashflow Statement)
What is the difference between striking off and winding up?
A private company that is not trading and meets certain other conditions may apply to the Company Registrar to be struck off the register. In general, striking off is an easier, faster and less costly procedure, however it is only suitable for small or dormant companies that are able to meet the specific requirements. A company may not be struck off if it is the subject, or proposed subject, of insolvency proceedings or a compromise or arrangement with its members or creditors.
Winding up is a more formal company liquidation procedure that involves the orderly winding-up of the company affairs, the appointment of a liquidator to manage the process of realizing the company assets, ceasing or sale of its operations, payment of its debts (if any) and distribution of surplus assets (if any) among its members.
What are the requirements for striking off?
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The company has not commenced business since incorporation and is not carrying on any business.
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The company does not intend to begin business or carry on any business.
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The company does not have any assets or outstanding liabilities. There should be no entries at the registrar of charges.
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The company has no outstanding penalties incurred under the Companies Act of 1965.
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The company does not owe any tax liabilities. The company should also be free of debt of any Malaysian government department or agency.
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The company is yet to make any dividends to the shareholders.
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The information of the company as lodged with the registrar of companies is up to date.
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The company is not involved in any legal proceedings in or out of Malaysia
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The company should not be a holding company or subsidiary of another company
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The company does not identify as a guarantor corporation.
Why companies opt for voluntary winding up?
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It allows for fair distribution of the company’s assets among the shareholders. This is unlike the past where the creditor rushed to liquidate as many assets as possible without considering the liabilities of the company to its employees.
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It removes a loss making business from the industry. This is good as it eliminates the possibility of the company continuing to operate and incurring more debts.
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It allows for proper investigation as to the cause of the problem. It identifies any wrong doing and holds those responsible to account.
What is compulsory winding up?
This is where the company is forced to wind up as it cannot settle its debts. This is a process forced through the courts. The law allows any creditor owed a debt of more than MYR 500 to send a demand note that should be payable within 21 days. If the demand note is not settled within this period, the creditor can invoke ‘Section 218 Notice’ simply known as ‘Section 218’ which comes from Section 218 of the Companies Act 1965. The creditor can then move to the court to have the company declared insolvent and forced to wind up.
What are the features and benefits of business loans?
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The loans have very simple documentation requirements.
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The loans can be repaid in affordable monthly instalments.
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The loans offer competitive interest rates.
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The business loans have higher finance margins.
What are the documents required to apply for business loans?
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Form D (Register of Business)
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Last three years management account submitted to Income Tax
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Last six months bank statements
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Latest debtors and creditors ageing
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A copy of NRIC of owners
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Company profile, product catalogue, certification
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A copy of Bank Offer Letter from other banks
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The land title of the property which will be pledged to the bank
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Form 24, Form 49 and the latest annual return
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Last three years audited accounts and latest management accounts
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Last six months banks statements.
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Latest debtors and creditors ageing (if any)
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ICs of directors of director
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Company profile, product catalogue, certification and other relevant information
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A copy of Bank Offer Letter from other banks
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A copy of Land Title of the property which will be pledged to the bank
How does a Term Loan help businesses?
A Term Loan is a fixed amount of loan that is granted for an agreed time period and is repaid in fixed instalments. With fixed repayments, businesses can better manage the cash flow effectively.
What is the general eligibility criteria for a business loan?
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Malaysian-owned business entities.
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There should be no adverse credit history of the applicant.
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For sole proprietorship or partnership, the age limit should be between 25 and 65 (upon full repayment).
What is the maximum limit of shareholders' funds in FSMI2?
All SMEs with shareholders' funds not exceeding RM10 million are eligible for FSMI2.
What are the different facility types available in business loan?
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Overdraft
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Term Loan
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Trade Lines
Business Process Solutions
Do you provide accounting services?
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Limited Companies
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Limited Liability Partnerships
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Partnerships
What are Management accounts?
Why does a business need accounts?
What’s involved with compiling your accounts?
What is include in the management accounts?
In short, only include what your board or management team need to see to allow for intelligent and educated choices.
What is the purpose of management accounts?
The primary goal of managerial accounting is to provide information for internal decision making, with an emphasis on planning and control purposes. Decisions made by managers rely substantially on accounting information.
What are the benefits I’ll receive on outsourcing to AdrianYeo?
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Faster turnaround times - we work efficiently and effectively on customer's matters
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Access to qualified staff - we are a team of 100 accounting professionals whom are available to assist you
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Efficient support system - we believe in "Your success is our success!", hence we aim to provide greater support to our clients
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Greater profitability - we will handle all your accounting matters, so that you will have more time in your core business that is more profitable for your business
What is your bookkeeping's scope of work?
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Accounts tagged and produced from incomplete records
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Accounting forms
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Draft accounts for review
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Final accounts for signature
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Full set of accounts and tax computation
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Accounts ready for a partner-level review
What should I provide for bookkeeping service?
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A completed accounting checklist
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Copy of last year or current year’s working papers, if any
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Copy of last year’s working papers, if any
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Accounts and bookkeeping software backup, if any
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Your instructions and assumptions regarding the job
What reports you provide us?
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Weekly or monthly job progress reports
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Financial reports and analysis
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General ledger
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Trial balance
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P & L account
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Balance sheet
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Cash flow statement
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Excel working papers with indices, hyperlinks, lead schedules and control accounts
What is virtual CFO?
What is interim CFO?
Many a times, companies require someone to immediately take over the responsibilities as their CFO. This could happen when the incumbent CFO suddenly quits or may fall sick for a long period of time. In such a scenario, you could either put in all your efforts in searching for a candidate, and lose precious time and money until the new recruit starts working for your company or you could bring in an experienced CFO from our team, as your Interim CFO. This will help the company tide over the gap formed by the departing CFO and the incoming CFO.
What is project CFO?
What is secondment arrangement?
A secondment arrangement involves an employee being temporarily assigned to another part of their own organisation, a different employer within the same group or, in some cases, a different employer altogether (such as a client or business partner).
What is the benefit of staff secondment?
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Access to quality accounting staff
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Availability of specific expertise that you require
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Augment your in-house team's skills
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Flexibility & continuity of quality support
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Integrated multi-disciplined service delivery
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Right resource at the right time at the right place
What is payroll outsourcing?
How does payroll outsourcing works?
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Set up their payroll software with your company and employee data, including your payroll account and employee’s accounts for direct deposit
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Request or obtain time card data each pay period to input into their payroll software
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Add new employee information and provide state required new-hire reporting
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Confirm hours worked each pay period as paid or unpaid and calculate gross pay
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Run your payroll, processing pre-tax deductions (like benefits and taxes) as well as post-tax deductions (like garnishments for child support)
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Make deposits to employees’ accounts (direct deposit, pay card) and/or mail or deliver paychecks and advices to your office or to employees’ homes
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Make payments to vendors, such as insurance companies, on your behalf
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Pay all payroll taxes and insurance when due, such as quarterly state and federal taxes
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Provide reports to the business
What are the benefits of payroll outsourcing?
Top 4 reasons why you need to outsource your finance function.
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You don't have the numbers. This is the first and most obvious red flag. If you don't have the critical numbers you need to make important decisions about driving company growth, it's time to turn your nonexistent financial department over to a professional. It's tough when your financial situation is a big question mark, but spending the money on an analyst is the first step to getting your cash flow situation under control.
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You can't hire a team of accountants, but you need the capacity of one. Outsourcing a team is all about flexibility. Once you determine your budget, you can have the team work within it to give you an accurate picture of your financial situation. As things improve and you expand, you can increase the time allotted until you can afford to hire a full-time team if necessary.
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You have the numbers, but you need a translator. First, give yourself a gold star for keeping track of your accounts. The next step is to interpret the information you've gathered, and if you're unsure of how to do this, it's a good idea to call in an expert. Whether sales are up or down, an analyst will be able to read into the numbers to ensure your business is pointed in the right direction.
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You're spending an excessive amount of time on accounting details. It's tempting to save your business money by crunching the numbers yourself, but a trained professional will do the same work more accurately and efficiently, gaining greater insights as a result. Meanwhile, this frees up your time for coming up with ways to market your brand or design your next product line.
What is accoutns payable outsourcing?
Accounts Payable (AP) outsourcing is the act of hiring a 3rd party to handle an organization’s AP processes. Typically seen as a way to save time, money, and effort; the 3rd party would already have the proper people and processes in place and see economies of scale as they are specialized in AP functions.
What are the pros of oursourcing your accounts payable?